Lawmakers decry, debate property tax bills
AUSTIN — Senate lawmakers approved a bill to give voters more control over property tax increases, but opponents say the measure, and a similar House proposal, would hurt Texas’ quality of life.
“This tax relief is very minimal but it has a very negative impact on cities’ abilities to provide core services,” said Steve Polasek, Cleburne’s city manager. “The negative impacts are going to be long term.”
Ron Wright, a former Arlington city council member who’s now Tarrant County Tax Assessor-Collector, says that unaccountable local taxing entities are the problem, not the solution to rising tax bills.
“Taxpayers aren’t dumb,” Wright said. “They’ve seen their taxes go up and up with no end in sight so of course they turn to the Legislature.”
Regardless of whether voters believe that the proposals represent a “California-style referendum” that would kill Texas’ economy or a much-needed change of direction, the outcome will have a bottom-line effect.
Voters can already petition for elections to roll back increases when local taxing entities propose raising taxes more than 8 percent.
Senate Bill 2 would cut the cap to 5 percent and require a special election for any tax increase greater than 5 percent.
No petition would be needed.
State Rep. Dennis Bonnen, R-Angleton, is the author of House Bill 15, which includes a similar automatic property tax rollback provision.
“Texans who are tired of ever-increasing property taxes must take a more active role at the local level, where appraisals and tax rates are set,” Bonnen said in a statement. “The Property Taxpayer Empowerment Act will give them the transparency and the tools they need to hold local officials accountable.”
But opponents say the bills fail to foster local control, and instead hand say so over property taxes to state lawmakers.
Dick Lavine, senior fiscal analyst at the Center for Public Policy Priorities in Austin, said the tax bills are part of a “broad assault on local control,” that started when state officials last session stopped cities such as Denton from making laws to limit natural-gas drilling.
As for accountability, Bennett Sandlin, executive director of the Texas Municipal League, said that taxpayers weigh in frequently.
“I’ve seen mayors come and go if they raised taxes one penny too much,” Sandlin said.
Paul Sugg, the legislative director for the Texas Association of Counties, echoed Sandlin.
“There’s a popular opinion that cities and counties can raise taxes in the dark,” Sugg said. “If you raise taxes a penny over the effective rate, you have to have hearing after hearing.”
City services such as police and fire would not be the only things to suffer under the proposed automatic rollback scheme, municipal entities say.
Economic development, roads and transportation would also take a hit, Sandlin said.
Not necessarily, said Wright.
“The presumption that people will always vote against more taxes is totally wrong,” Wright said.
The problem, as Wright sees it, is that while property values rise in many parts of the state, the tax rates stay the same, resulting in bigger tax bills.
“Government spending drives tax increases,” Wright said. “What city has to have more than 5 percent a year?”
City taxes presently account for about 16 percent of Texas residents’ tax bills; counties make up about 16 percent, Sandlin said.
The biggest chunk — about 54 percent — is school taxes.
Senate Bill 2 does not address school taxes.
And for many observers, addressing that is a key issue.
“The reason school property taxes are going up is because of inadequate state support,” Lavine said. “The state’s share is under 40 percent; the goal is to make it 50-50.”
Part of the reason there’s less money in the state’s coffers is tax cuts the Legislature approved in the last session, Lavine said.
“The cities and counties think it’s unfair that they’re getting blamed,” Lavine said. “They have no choice if they’re going to provide the same level of services.”
Meanwhile, a Bonnen staff member said that there’s no date for a committee hearing on HB 15.
The current legislative session is scheduled to end May 29.
“Ideally, the hearing would be on May 30,” Sugg said.
CNHI State Reporter John Austin covers the Texas Statehouse for CNHI’s newspapers and websites. Reach him at jaustin@cnhi.com.