Identical property tax reform bills filed in the Texas House and Senate Jan. 31 have support from some high-ranking lawmakers in Austin, but Houston-area officials are worried the proposed measures could limit their ability to increase revenue.
House Bill 2 and Senate Bill 2, known as the Texas Property Tax Reform and Relief Act, would require taxing entities such as cities, counties, and school districts to obtain voter approval for an annual property tax revenue increase of more than 2.5 percent from the previous year.
Such a cap is referred to as a rollback tax rate because if a taxing entity exceeds the established rate, an election is triggered, giving voters the chance to approve or reject the proposed increase. The bills filed call for a much steeper cap than current state law, which sets the rollback tax rate at 8 percent, per the Texas comptroller’s office.
An attempt by the Texas Legislature to lower the rollback tax rate to 4 percent during the 2017 special session failed.
In a statement he released after filing SB 2, Sen. Paul Bettencourt, R-Houston, said the two bills will begin the conversation on providing relief to Texas taxpayers who have seen increases in their property tax bills as their home appraisal values have increased.
In his Feb. 5 State of the State address, Gov. Greg Abbott included property tax reform as an emergency item for the Legislature to address, The Texas Tribune reported.
The Center for Public Policy Priorities, an Austin-based think tank, criticized the proposal for denying elected officials the ability to manage their communities and raise revenue.
“When we vote locally for city, county and school board officials, we are choosing by extension how much we want to pay for schools, public safety and other services we value. We all benefit from services delivered by our city, county and other local governments,” Luis Figueroa, CPPP legislative and policy director, said in a statement.
In the Houston area, some officials are worried that the property tax reform measure would limit their ability to fund services and make the best decisions in their communities. In a letter addressed to Bettencourt, Harris County Judge Lina Hidalgo said limits imposed by the Legislature would restrict the functions of Harris County.
“This proposal has the potential to severely limit our county’s ability to keep our residents
safe and plan for the future,” Hidalgo said in the letter. “For those living in our unincorporated areas, the county government is the main provider of essential government functions: roads, parks, facilities and law enforcement. If the state passes an arbitrary cap on our growth they will effectively place an arbitrary cap on the roads we can build and maintain and the law enforcement resources we can fund.”
In the city of Houston, the office of Mayor Sylvester Turner highlighted the city’s more than $230 million gap between property tax revenue and the amount the city spends on public safety.
“The city’s public safety costs alone are already more than its property tax revenue,” Alan Bernstein, the mayor’s director of communications, said in a statement. “This is with our current revenue cap… And yet, a variety of expenditures are not limited to that same level growth [such as pensions, healthcare, contractual obligations, deferred maintenance] not to mention more revenues to increase the ranks of public safety employees.”
Bernstein said the city plans to submit testimony opposing the proposal.
Montgomery County Judge Mark Keough said the county’s property tax rates have held steady for years and attributed the increase of what the county receives in property tax revenue to rising appraisal values. Keough said the Legislature should consider appraisal value reform, rather than the rollback issue.
“Although it sounds like it is what we need to do, the results, like always will be the same,” Keough said in a statement. “You will write a larger check each year for property taxes. Appraisal reform is what needs to take place, not a roll back tax rate plan that essentially offers no property tax relief for Montgomery County citizens.”
Keough noted that he supports efforts authored by local legislators including state Sen. Brandon Creighton and state Rep. Cecil Bell focused on limiting appraisal value increases and maximums.
Brazoria County Judge Matt Sebesta also opposes the measure and said he believes local control of the issue is best for taxpayers.
“The best government is local government. The state shouldn’t impede on them being able to provide what they need to provide,” he said in a statement.
Additional reporting by Andrew Christman.