With the state lawmakers passing legislation to offer voters more control over skyrocketing property taxes, one Central Texas city council is attempting to cash in by bilking citizens ahead of the law’s effective date next year.
The city council of Hutto, an Austin-area suburb located in Williamson County, is currently considering raising the city property tax rate by up to 17 cents ahead of the implementation of Senate Bill 2, which was signed into law by Gov. Greg Abbott last month, 10 cents of which was approved by voters in a bond election last year.
As passed, SB 2 would require the city to seek voter approval before raising property tax revenue above 3.5 percent. The law would still allow cities to collect additional revenue from new growth and economic development, in addition to the 3.5 percent tax increase.
Out-of-control city governments get one more chance in the 2019 tax year to ratchet up rates in their 2019-2020 budgets.
During a city council meeting on July 11, Hutto’s assistant city manager and chief financial officer Michel Sorrell suggested raising the city’s tax rate from $0.51 per $100 of property valuation up to potentially $0.68, a 33 percent rate increase in one year. Sorrell justified the proposed 2019 rate hike by saying, “It is the smart and financially responsible thing to do.”
Hutto Mayor Doug Gaul, a staunch opponent of property tax reform efforts by the state legislature, predictably blamed SB 2 for the alleged need to increase tax rates, saying, “. . . with this new limitation, we must revise our tax rate appropriately to provide the necessary funding for services like public safety, public works, and upgrades to infrastructure needed to keep up with the growth we are experiencing and expecting.”
Gaul’s “growth” talking point is a familiar one dredged out by local bureaucrats to distract from their own bloated budgets.
Hutto taxpayers are no strangers to tax hikes. In 2018, the city also raised tax burdens on its residents. Although it kept the tax rate flat at $0.51—the same as in 2017—rising property values and growth resulted in a massive 12 percent tax revenue increase.
According to the city’s budget, 70 percent of that new revenue came from a tax increase on residents, with the other 30 percent coming from new properties added to the tax rolls. The $125 million bond approved last year has also contributed to rising tax rates.
“The city is going to tax people out of their home,” one resident said in a Facebook group of Hutto residents.
“We all better vote,” said another. “[H]ope that we won’t end up like Austin and the average person will not be able to afford high water bills, HOA dues, and ever-increasing property taxes.”
Those same residents will soon have the opportunity to make their voices heard to the city council. Hutto will be holding public forums on August 1, August 15 and August 22, before likely approving their final budget in September.
This article has been updated since its original publication.