With Texans begging for relief from sky-rocketing property taxes, a Laredo Democrat is proposing to use surplus dollars to provide one-time tax relief for homeowners.
State Rep. Richard Raymond wants to take $3 billion from the state’s Economic Stabilization Fund to make the relief possible. The fund is approaching a $12 billion balance because conservatives have been successful in protecting it in recent years.
At Empower Texans, we have always said the fund should be used for emergencies and to cover true shortfalls for critical needs, but never to create ongoing obligations. Similarly, we strongly believe that excess revenues flowing into state coffers should be returned to the taxpayer in the form of tax relief.
(Let’s pause for a moment to reflect on the irony that it is a Democrat who is offering tax relief using surplus revenues in a special session partially devoted to property taxes…)
Raymond’s legislative package doesn’t pretend to be a panacea for the state’s property tax problems. And he has been on record supporting Gov. Greg Abbott’s principal property tax reform – lowering the so-called “rollback rate” and empowering citizens to have greater control over property tax hikes.
Raymond is also upfront about his measure being a one-time shot; should HB 190 and the accompanying constitutional amendment be adopted, Texans would see tax relief in 2018 and only in 2018. In 2019, the property tax burden would reset.
This is not dissimilar to the annual sales tax holiday Texas holds for back-to-school items. No one considers it a “tax hike” when the sales tax returns after the holiday; but they do enjoy a few days without taxes on certain items.
Previous attempts to offer property tax relief from Austin have fallen flat, with homeowners not seeing a decrease in their bill. That’s been the result of local officials, seeing the tax relief coming, raising rates or otherwise gaming the system to undermine the intention of lawmakers.
Raymond would accomplish the tax relief by means of a one-time increase in the school district homestead exemption. The ESF dollars would be used to make up the difference for the local school districts. With the rollback reform in place, homeowners should see several hundred dollars in relief.
Some might criticize Raymond’s measure for “only” going to homeowners and not businesses or other non-homesteaded property. Perhaps a fair consideration, but – again – a reflection of the absolute mess that is Texas’ property tax system. And, let’s be honest, most people who own non-homesteaded properties do also tend to own homes, as do many of their employees.
Raymond should be praised for attempting to provide meaningful tax relief to Texas homeowners. Should the House leadership choose to allow the measures to the floor for consideration, votes on Raymond’s relief measures will be favorably rated on the Fiscal Responsibility Index, but only if Gov. Abbott’s property tax reform measures are also brought to the floor for a vote.
The legislature can and should at every opportunity provide tax relief to taxpayers, but they must ensure that relief is not hijacked by local taxing entities.