At a recent Senate hearing, taxpayers overwhelming supported an overhaul of Texas’ property tax system, including requirements that governments obtain voter approval to significantly raise taxes. While numerous city and county officials remain opposed to the bill, it passed out of committee.
Following compelling testimony from taxpayers in support, the Senate Select Committee on Government Reform passed the Texas Property Tax Reform & Relief Act of 2017 (SB1) out of committee on a split vote (5-2). A similar version of the bill passed the Senate in 2017 during the regular session, but was gutted in the Texas House at the behest of local governments.
The strongest opposition again came from the Texas Municipal League, a government interest group opposed to any effort that would “diminish [city] revenue,” according to its own legislative agenda. TML’s spokesman did not propose an alterative reform to address city taxes, when questioned by lawmakers.
State Sen. Paul Bettencourt (R-Houston) opened the hearing by noting he’d already witnessed “more than fifty hours” of public testimony. He said the “vast majority” was from Texans who, unsurprisingly, support reforms that empower them.
“It is time to let the people have a vote on property tax rates,” Bettencourt noted.
State Sen. Eddie Lucio (D-Weslaco) echoed Bettencourt’s comments. “In thirty-one years, I’ve never witnessed so much turnout, mostly on the side of reform.”
Bettencourt made a short but detailed presentation, showing how Texans in 2015 paid the sixth-highest property tax rates in the nation. He also showed how local tax burdens grew wildly out of control between 2005 and 2015.
During that period, city tax levies grew 71 percent, county levies by 82 percent, and special district levies by a whopping 93 percent. In other words, all have grown roughly twice as fast as the combined rate of population growth and inflation, which was only 42 percent over the same period.
Bettenecourt said local officials who refuse to adequately lower tax rates are to blame. And when they do, voters have no practical tool to oppose tax increases.
“As property values go up, tax rates usually stay the same. Therefore, tax bills for homeowners and businesses go up.”
Bettencourt’s solution – which is already in place for school districts – would require November elections on excessive tax hikes, and would lower the threshold that triggers the automatic election. The state’s annual “rollback” limit – currently at 8 percent – hasn’t been modified since 1979, back when inflation was in the double-digits. SB 1 would reduce this threshold to 4 percent.
State Sen. Van Taylor (R-Plano) held a large stack of letters from constituents in support of tax reform, totaling 434 pages. Taylor read several letters aloud, including one from a retired couple.
“Our property tax bills are now higher than our mortgage,” it read. Taylor passionately remarked, “[The role] of government is to protect our rights, not tax us out of our homes.”
But citizens were not the only voices supporting reform. Several grassroots organizations and business groups testified in support of the bill. A volunteer from Convention of States Action said, “This bill allows voters to control rate of government growth. Our constitutional framers recognized the need to have checks and balances on governmental power. The people are that check.”
Tarrant County Tax Assessor Ron Wright also testified in support of empowering local voters, pointing out the misleading rhetoric used by TML and others who oppose the bill.
“When governments talk about “local control,” they’re really talking about government control.”
Even the former mayor of Austin – liberal-leaning Lee Leffingwell – testified in support. “Property taxes [in the City of Austin] have been increasing seven out of ten years… As with any budget, there are always more wants than imperatives; public safety can and should be prioritized [over arbitrary items].”
Taxpayers from Collin County have since expressed concern to Texas Scorecard that SB 1 only applies to entities with more than $10 million in property tax revenue, which would exclude non-urban entities. Committee members expressed a desire to expand that carve-out to larger entities with an amendment on the Senate floor.
Texas taxpayers will need to engage their lawmakers on two fronts: by petitioning their senators to prevent the bill from being watered down, and by demanding that House lawmakers allow a floor vote on serious property tax reform legislation.