Members of the Republican-dominated legislature have failed to adequately protect Texans from rising property taxes. But culpability ultimately falls on local officials who, despite clinging to “limited government” and “local control” rhetoric, have failed to pass laws that limit property taxes and require local voter-approval to break.
State law already requires school districts to obtain voter-approval to exceed their taxing limit. All local governments should be governed by similar (or improved) standards.
Back in 2006, a citizen uprising in Houston initiated a petition drive that circumvented opposition from city politicians, effectively limiting the growth of their city property tax bills to population growth plus inflation. Houston’s big-government Mayor Annise Parker responded by creating new taxes.
Regardless, Houston’s tax limit is a big step in the right direction. It’s also more equitable than the eight-percent “rollback rate” currently imposed on locals by the state, because Houston’s limit adjusts for appraisal and population fluctuations. The state limit does not.
Under a population plus inflation property tax limit, governments in areas that grow quickly are also allowed to grow their tax revenue proportionally, while others in areas with stagnant or declining growth would still face an effective taxing limit.
There’s a simple reason for why the taxing power of politicians should be limited. The average Texan’s property tax bill has historically grown too fast. Collections over the last twenty-five years by schools districts, cities and counties are all far outpacing population growth and inflation. In other words, the burden of local governments on all families and businesses, including low-income Texans, is rising.
The current property tax system also provides political cover to tax-hiking politicians anxious to avoid backlash from fiscally conservative constituents.
Understanding this dynamic is quite simple. Outside of sharp economic downturns, property values generally rise over time. As a result, Texans face the threat of higher property tax bills unless local tax rates are regularly reduced.
As a result, politicians can cleverly raise property taxes without raising the tax rate. They then falsely campaign on a record of “not raising taxes.”
In regions with abnormally high growth rates such as Midland, Travis, Tarrant and Collin counties, taxpayers may actually pay higher tax bills even as tax rates are lowered. Politicians then falsely campaign on a record of “cutting taxes” while actually allowing them to increase!
There are other needs for common-sense tax limits. The current system encourages overtaxing, spending and debt. It also relies heavily upon long-term planning and dubious forecasts by local politicians whose political careers often fizzle out long before the consequences of their poor decision-making become apparent.
Understandably, common-sense Texans are clamoring for property tax relief. But history suggests that taxpayers shouldn’t expect politicians to benevolently represent their best interests. Texans should ask officials at all levels to vocally champion the adoption of stricter taxing limits.