In May of this year, the Texas Legislature passed Senate Bill 2, which lowered property taxes by—among other things—requiring cities to hold public elections to get approval for proposed tax rate increases of more than 3.5 percent. The law was viewed as a major victory for Republicans and a necessary step to curb the state’s steadily increasing property tax bills.
However, many cities are attempting to jump ahead of the new law and raise property tax burdens before the voter-approval restrictions go into effect next year.
One of these cities is Conroe, just north of Houston. Faced with the impending limitations of the new law, Conroe City Council is proposing a tax rate hike this year. Under the proposal, rates will increase to $0.4454 per $100 assessed value, up from $0.4175 per $100 for the 2018-19 fiscal year. The higher tax rates are in addition to rapidly rising property values, which will dramatically increase what property owners pay in their city tax bill.
This dramatic tax rate hike comes on the heels of many other Texas cities, including major population centers like El Paso and Fort Worth, considering similar action.
Conroe officials acknowledge these tax increases are attempts by local governments to rake in as much revenue as they can before being potentially hampered by their own constituents via Senate Bill 2.
“A lot of cities are proposing going up to the max this year because you’re going to be capped next year,” said Conroe Chief Financial Officer Steve Williams. “In the Austin area, in the Metroplex … I’ve just seen a lot.”
Those in favor of the increase cite the maintenance and operation of public works to be the reason higher taxes are needed, while those against say that these latest taxes are nothing more than local governments’ attempts to siphon away as much from taxpayers as they can.
Increases in property taxes are not new in Texas. In fact, local property taxes across the state have increased by over 70 percent in the last 10 years—a phenomenon that has made certain Texas cities some of the most expensive places to live in the country. This statistic emphasizes the burden that homeowners are under.
Senate Bill 2 was passed to alleviate this burden, but as the situation in Conroe suggests, many cities appear to be ignoring its clear intent. Instead of providing relief for their taxpayers, local governments across the state are raking in as much of their money as possible before they are inhibited from doing so in the near future.