Tarrant County Tax Assessor Ron Wright recently gave refreshing public testimony on behalf of Texas taxpayers—and the truth. He concisely exposed what he calls the “myth of automatic tax increases,” an idea advanced by local officials seeking to blame anyone but themselves for raising taxes. He also expressed his support for pro-taxpayers reforms designed to empower voters and increase accountability for elected officials.
Below is his testimony in its entirety.
REMARKS BEFORE THE SENATE COMMITTEE ON PROPERTY TAX REFORM
April 27, 2016
I think everybody recognizes that the issues before this committee are enormous in their importance. Texans are tired of dealing with ever-rising property taxes with no end in sight. Believe me, I hear from taxpayers all the time.
It’s important to remember what got us to this point.
The system is designed so that the local elected body determines the taxes we pay, designed so that elected officials—not an unelected appraisal district—make that determination. The ugly truth is that is exactly how it works.
Local elected officials know the value before they set the tax rate. The amount of property taxes we pay has always been within their control. The problem is when the state created central appraisal districts, it also created a convenient scapegoat.
Almost immediately, local governments began convincing people – conditioning taxpayers to believe – that value, not tax rates, was the problem.
Today, almost everybody believes that if their property value goes up, then their property taxes will automatically go up. Nothing could be further from the truth. [Emphasis Added]
Local elected officials are good people who want to do the right thing for their constituents, but many of them have also fallen victim to the myth. Many seem to believe that if they vote to keep the tax rate the same as the year before and values go up, then they haven’t really voted for a tax increase, but the truth is they have.
It’s time to drop the veil that has covered who really controls property taxes. The local governments control it and have always controlled it. Elected bodies should not be allowed to hide behind their appraisal districts. This is particularly true of elected bodies who vote to keep their tax rate the same year after year while rising values produce a windfall of taxes that is rarely shared with taxpayers in any meaningful way.
One proposal I hope the committee will seriously consider is to create a system that requires that when values go up, tax rates automatically go down a commensurate level. Then, if the local body needs more revenue, they have to vote to increase the tax rate to pay for it. This would put the focus where it belongs and put accountability where it belongs: on the people’s elected representatives.
For too long, local governments have conditioned the public to believe that higher values will raise taxes automatically. It is, and has always been, a myth. There is nothing automatic about tax increases. Local elected bodies have always had the power to lower their tax rates and slow the growth of government. Instead, too many too often chose to spend the windfall that came from higher values. It’s time to provide accountability that has been lacking for decades.
This committee will be looking at all facets of the property tax system. That’s good. You will be looking at the appraisal side and the tax collection side. That’s good. But ever rising property values is only one component of the problem, Mr. Chairman. The larger issue is tax rates.
