Texas Senate rolls out details of new push for property tax caps
“People are crying out for relief,” said Sen. Bettencourt, who pegged relief under his proposal at $30 to $200 per year for average homeowners; cities fire back that lawmakers should be looking at school finance first.
The Texas Senate is taking its strongest run yet at revenue caps next session, putting it at the top of the legislative agenda with a bill co-sponsored by key Senate Republican.
Lt. Gov. Dan Patrick couldn’t signal any more strongly he intends to make property tax relief a key goal of next session. The only bill with a higher number in the Senate will be the budget, which will start in the upper chamber when the legislature reconvenes in January.
Former appraisal district leader Sen. Paul Bettencourt, R-Houston, unveiled a 50-page SB 2 this afternoon, complete with its own interim committee report When property values go up in Texas, tax rates ought to go down, Bettencourt told reporters.
“We’re putting too much pressure upon people, where they live and where they work, to pay property taxes, and those bills must go down,” said Bettencourt, who said local budgets shouldn’t be seeing multiple, double-digit increases. “People are crying out for relief.”
As was made clear last session, the Senate’s preferred tax cut comes from the property tax column. The House, led by Rep. Dennis Bonnen, R-Angleton, preferred tweaking sales tax. The two chambers met in the middle with a combined franchise tax cut and homestead exemption.
Next session, Bettencourt’s bill would limit local government tax rate increases to 4 percent, down from the current 8 percent. Cities can tax more, but it would require taking the tax increase to the voters in a so-called “tax ratification election.”
Cities and counties have beat back revenue caps over multiple sessions, most notably with former Rep. Fred Hill’s impassioned speech on the House floor. Hill, a former Richardson school board member, urged his colleagues to kill a tax cap bill backed by then-Gov. Rick Perry.
“The time to kill a snake is when you’ve got the hoe in your hand,” Hill told his colleagues.
That was in 2005, the 79th session.
Then-Sen. Patrick, in his first term, passed a bipartisan appraisal cap bill in 2007. That was followed by failed attempts to roll back revenue caps in 2011, 2013 and 2015. Now Patrick is taking another run at the issue, putting it at the top of his legislative agenda. Hill is now on the lobby side of the equation, representing most North Texas cities.
Senate Bill 2 also contains appraisal district reforms that do not have any apparent or overt opposition: A common calendar, a state property tax advisory board, common appraisal manuals and some adjustments to the value of property required to go to arbitration. Sen. Bettencourt took a swipe at Austin, prohibiting local government from challenging a class of property values.
Lawmakers pulled school districts under revenue caps in 2005, requiring school boards to take tax increases to the voters if the tax rate exceeds the rollback rate. Bettencourt said it only makes sense to bring cities, counties and special districts under the same umbrella.
Cities and counties will be on defense next session.
In fact, Bennett Sandlin of the Texas Municipal League was waiting outside the press room to argue his case to reporters. Sandlin said the average increase in city budgets are in the range of 3.5 percent, far from the 8 percent Bettencourt was implying in the press conference.
“More than half of the budget for cities is public safety – police, fire fighters and EMTs,” Sandlin said. “Those are not the kind of services that people want to cut just to save $2 or $3 a month.”
That’s a high price for cutting half the capacity out of budget increases, municipal leaders argue. Mayors from the three major I-35 corridor cities – Austin, New Braunfels and San Antonio – said Bettencourt’s bill would cost them $770 million in potential revenue over a decade. Bettencourt countered that cities aren’t cut off from those funds; they just have to ask voters for approval.
Was Bettencourt implying local government budgets are laden with waste? The Houston senator answered with an immediate “yes.”
A cut to city tax rates should not be oversold, Sandlin said. School districts are 55 percent of most tax bills. “They need to be looking at school finance first,” Sandlin said.