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Home | Tag Archives: texas property taxes

Tag Archives: texas property taxes

Analysis: Property tax relief in Texas, perhaps — but not right away

While trying to limit the annual growth of property taxes in Texas, the Legislature gave local governments an incentive to raise taxes nearly 8% this year. Maybe it was unintentional, but the state gave the locals a reason to raise property taxes faster than they would have without state action.

Everyone who’s seen a car dealer’s TV spots or commercials for a year-ending sale at a furniture store understands how this works: It’s a classic closeout sale. You tell the customer there’s a big change right around the corner — a new model year, higher prices, new rules. And you add that there’s a better deal for anyone who acts quickly, to help the dealer clear the car lot, to assist that poor furniture store owner who wants to reduce inventory before the new year begins.

Act now and save!

Legislators know that stuff, too, but it’s not clear they were thinking about it. In their most recent session, they passed, with a great deal of self-congratulation, a new law that requires local governments (not including school districts) to get permission from voters for any property tax revenue increases of more than 3.5%.

The city or the county can raise more, but only if voters approve. And there’s an exemption for community colleges, hospital districts and small government entities.

Before that law passed, the limit was 8%. This is the last calendar year when that older limit is in effect. Those local governments argued, unsuccessfully, that the state’s newly imposed limit would hobble their efforts to keep up with growth and operating costs. They have some third-party support for that view; Moody’s Investor Service said in a report this year that the legislation would lead to minimal homeowner savings but would “hurt local governments substantially.”

You see why the governments would jump?

Act now, and revenue from property taxes can go up 7.99% without a public vote. Next year, the maximum increase without going to the polls will be 3.5%. And unlike current law, which requires citizens to petition for a rollback before a vote, the new law makes the public referendum automatic.

Act now!

A number of those governments are taking advantage of this, which will mean higher tax bills for some Texans and might keep legislators seeking reelection in 2020 from claiming they acted to cut your taxes or provide tax relief. Not all local governments are taking advantage of this 8% solution, but some big ones are. According to the Houston Chronicle, the list of governments taking or considering the high-tax road includes Harris, Tarrant, Travis, El Paso and Webb counties, and cities like Austin, El Paso, Arlington and Corpus Christi.

“I think a lot of cities and counties know that we are putting them on a diet, and they are going on one last bender before it happens,” State Rep. Dustin Burrows, R-Lubbock, told the Chronicle. He was the House sponsor of the property tax law.

Your actual taxes will vary, depending on where you live and what your local governments are doing. The biggest part of your property tax bill — for local schools — isn’t subject to the new limit. But the rest of the bill is, as you’ll see when you get it between now and the end of the year. It’ll also show what your bill was last year, so you can do the math and see whether you’ll get any promised property tax relief now, or later, or at all.

One sponsor of the legislation, state Sen. Paul Bettencourt, R-Houston, told The Dallas Morning News last month what some local governments were up to. “No question. They’re trying to build an increase before the law takes effect.”

He indicated his displeasure, but he shouldn’t be surprised. He’s a tax law consultant in real life, and he knows the ins and outs of property taxes as well as anyone in the Legislature. And politicians are supposed to have a pretty good grip on what effect their new laws will have.

This one will limit the growth of property taxes — after it gives local governments one last chance to get a bigger revenue increase before the end of 2019.

Act now!

Author: ROSS RAMSEY – The Texas Tribune

Editor’s note: If you’d like an email notice whenever we publish Ross Ramsey’s column, click here.

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Texas House approves property tax reform bill, setting up negotiations with the Senate

The Texas House gave preliminary approval to a priority property tax reform package Tuesday, teeing it up for negotiations with the Senate and impelling the upper chamber to act on an omnibus school finance measure.

Together, the education and tax overhaul bills have been the top policy issues of the 2019 legislative session, and they are ultimately expected to be ironed out behind the scenes — and perhaps simultaneously.

Tuesday’s vote marks a small milestone for House leadership, which has muscled its must-pass budget, public education and tax reform bills to passage, all before the last month of session begins. But the House and Senate will next need to reconcile notable differences among the three measures, and the upper chamber has yet to move the school finance bill out of committee.

“We have done our job in the House — and we have sent everything over to the Senate,” said state Rep. Dan Huberty, R-Houston, author of the school finance bill.

Senate Bill 2 was approved on a 107-40 margin after a half-dozen hours of debate. More than 20 Democratic lawmakers broke party ranks to support the measure, which has garnered adamant opposition from city and county officials since its introduction.

A top imperative for state leaders, SB 2 offers wholesale reforms to the property tax system and limits the ability of cities, counties and other taxing units to raise property tax revenue. As passed, it forces cities, counties and emergency service districts to hold an election to approve raising 3.5% more property tax revenue than the previous year. Hospitals and community colleges have an 8% election trigger in the version passed by the House.

“Texas taxpayers are frustrated by rising property taxes. They’re often confused by the process, and many are scared of losing their homes,” said state Rep. Dustin Burrows, the bill’s author and chair of the tax-writing Ways and Means Committee. While the bill makes the tax process more transparent, “it does not lower anyone’s property taxes.”

“It was never designed to do that, and I’ve never promised anyone that it did,” said Burrows, a Lubbock Republican.

Few attempts to make major changes to the bill were successful Tuesday.

One amendment, from state Rep. Charlie Geren, R-Fort Worth, seems to bar anyone but licensed attorneys from representing taxpayers in the property tax appeal process on a contingency fee basis. The change would likely affect the author of SB 2, state Sen. Paul Bettencourt, a Houston Republican and a property tax consultant.

“It affects a lot of people. We’ll talk about it in conference,” Geren said. He added, “I don’t believe in contingency fees, but if we have to have contingency fees to do this, then I want the lawyers to do that.”

Another change lets taxing units factor indigent health care costs into their revenue growth calculations.

Texas’ top Republicans, including Gov. Greg Abbott and the leaders of each chamber of the Legislature, have pushed for property tax and school finance reform since the beginning of the session, though the Senate has emphasized the former and House has accentuated the latter, if ever so slightly. Movement on both pieces of legislation slowed this month as both chambers eyed each other warily and waited for the other to move on its priorities.

House leaders have signaled that they believe property tax reform legislation should run on a parallel track with the school finance bill since the issues are so closely intertwined. Ahead of Tuesday’s debate on Senate Bill 2, Speaker Dennis Bonnen, R-Angleton, indicated this to the two party caucuses in separate meetings — signaling that the House won’t act any further on property tax reform negotiations until the Senate passes a school finance bill, according to multiple people with knowledge of the meetings.

House leaders have also reworked the property tax bill to make it contingent on school finance reform passing.

State Sen. Larry Taylor, R-Friendswood, said earlier Tuesday that the Senate Education Committee he chairs would likely not approve the school finance bill until Thursday or next week. But by the end of the day, that timeline had rapidly accelerated: The committee now plans to vote on the bill Wednesday morning.

Meanwhile, there are few differences between the House’s version of the property tax package and the bill passed by the Senate earlier this month. Perhaps the most significant point is that the House offers community colleges and hospitals an 8% election trigger, while the Senate has reduced it to 3.5%.

In addition, the Senate had required voters in small taxing units — those that bring in less than $15 million combined sales and property tax revenue — to opt in to some of the bill’s provisions. The House’s revision eliminated that definition and inserted a new allowance to let all taxing units increase their property tax levy by $500,000 without triggering an election.

The Senate also permitted the costs of providing indigent defense services to be factored into the revenue growth calculation. The House removed that language but included a similar clause that protects cities and counties from being penalized if they offer homestead exemptions to their residents.

Finally, the lower chamber’s version includes a provision that lets taxing units bank unused revenue growth for five years, allowing them to surpass the 3.5% trigger in some of them.

Currently, cities, counties and other taxing units can raise 8% more property tax revenue before their voters can petition for an election to roll back the increase. SB 2 would make those elections automatic and put in place a battery of reforms designed to increase transparency and utility for taxpayers.

State leaders had said property tax reform is necessary to protect Texans whose property tax bills are growing faster than their incomes. Abbott has said on Twitter that “skyrocketing property taxes must be fixed” and that a previous increase to the homestead exemption was quickly “eroded by rising appraisals and rates.

But Democrats and ultraconservative lawmakers have clamored for weeks over how much control the state should exercise over local property tax revenue growth and whether the bill should include school districts.

Schools levy the bulk of property taxes across Texas, and hard-right lawmakers and activists have argued property owners will feel no relief if schools are exempted from the bill.

The House initially tried to strip schools from the measure, saying its school finance bill, HB 3, was the appropriate vehicle. Burrows later reinserted schools into the property tax measure — with the caveat that it was a symbolic move that does “absolutely nothing” in practice.

“If we’re going to have property tax reform, we can’t do it with just cities and counties. We also have to do it for school districts,” Burrows said, referencing HB 3. But he said those changes need to be made in the state’s education code, not the tax code.

An attempt to decouple the property tax bill from the school finance legislations Tuesday earned an impassioned rebuke from Burrows and Huberty, who authored the school finance bill.

After the lawmakers suggested that passage of both bills was critical to meet the House priorities laid out at the start of the session, the amendment sank on a 143-5 margin. Even the speaker took the rare step of casting a vote in opposition.

The most consistent legislative opponents to the property tax reform effort have been Democrats, who have asked for a higher election trigger or for certain costs to be exempted from the calculation.

Efforts to exclude public safety expenses, economic development expenditures and spending on flood risk mitigation from the revenue growth calculation all failed to progress Tuesday.

City and county officials have also maintained the bill imposes an election trigger that is not practicable.

Fort Worth Mayor Betsy Price said that “a 3.5% revenue cap would create unintended consequences” and would “hamstring cities” without providing meaningful tax relief to residents.

Sylvester Turner, the mayor of Houston, which already operates under a revenue cap, also said the proposal would have little impact on taxpayers’ bills.

“Last year, revenue caps saved the average Houston homeowner less than $10 a month,” he said, “and resulted in 1,152 fewer police on the street.”

In a statement after the vote, Abbott applauded the bill’s passage and thanked Burrows and Bettencourt for their leadership.

“For too long, Texans have watched their property taxes skyrocket while being reduced to tenants of their own property. That is not the Texas way,” Abbott wrote. “In the final days of the legislative session, I am confident this historic legislation, combined with additional reforms working their way through the system, will reach my desk where I will sign them into law.”

Cassi Pollock and Aliyya Swaby contributed reporting.

Read related Tribune coverage

Author: SHANNON NAJMABADIThe Texas Tribune

The 86th Legislature runs from Jan. 8 to May 27. From the state budget to health care to education policy — and the politics behind it all — we focus on what Texans need to know about the biennial legislative session.


Analysis: The Texas House is handcuffing property tax relief to education reforms

Texas isn’t going to get any action on property taxes without reforms to school finance, if the latest House maneuver is the barometer.

The House Ways and Means Committee approved its version of a Senate property tax bill Thursday, inserting an all-or-nothing clause that makes the tax bill contingent on approval of a related school finance measure.

Look, this isn’t rocket science. It’s easier to get lawmakers to restrain local property tax increases than it is to get them to make big changes to complicated school formulas and education policy. Education is a top concern of voters, but property taxes are a particular point of pain for them, and lawmakers want to do something about it.

That’s the only possible explanation for the big idea of the moment: a sales-tax-increase-for-property-tax-decrease swap proposed by the state’s top three Republican officeholders.

We’re in an odd spot when GOP headliners want a tax increase and one of them — Lt. Gov. Dan Patrick — is even pushing for a $5,000 teacher pay raise straight out of the Democratic and teacher association playbook. Strange times.

But this stuff is hard, and the easy thing to do with less than five weeks remaining would be to pass some property tax restraints and push the education stuff into a special session — or into the next regular session in 2021.

Not gonna happen. First, because nobody will say out loud that it’s a good idea. And now, more firmly, because a House committee has handcuffed the property tax bill to the education bill.

It makes some policy sense. People who are complaining about property taxes are doing so, whether they know it or not, because of school taxes. School taxes are rising with property values. The state’s been taking advantage of that, using state-written formulas to lower state spending as local property taxes rise. The comptroller has said the state currently covers only 36% of public school funding, while local property taxes cover 64%. Balancing that would take pressure off of property taxes but require the state to put up the money.

The property tax legislation tagged by the House doesn’t actually lower property taxes. It requires voter approval when city, county or emergency district property tax revenues rise by 3.5% or more, or when school property tax revenues rise by 2% or more.

It makes a lot of political sense, too, subverting anyone who had the idea of limiting property taxes and leaving school finance for later.

Author: ROSS RAMSEYThe Texas Tribune

The 86th Legislature runs from Jan. 8 to May 27. From the state budget to health care to education policy — and the politics behind it all — we focus on what Texans need to know about the biennial legislative session.


Editor’s note: If you’d like an email notice whenever we publish Ross Ramsey’s column, click here.

Texas Senate gives local governments more breathing room for property tax revenue growth

The Texas Senate broke a logjam Monday that had paralyzed a piece of priority legislation for weeks — blunting a controversial provision in a property tax reform package and then advancing the bill, without having to deploy a procedural “nuclear option” to move it.

A vote on Senate Bill 2, a top imperative for state leaders, had been expected last week. But an apparent lack of support stalled the vote in the upper chamber, where the backing of 19 senators is generally required to bring a bill up for debate. After Republican Lt. Gov. Dan Patrick threatened to blow past decades of tradition and bring the measure to a vote with a simple majority, state Sen. Kel Seliger, a vocal dissenter, relented Monday, allowing the bill onto the floor. He did not support its passage.

Seliger’s announcement came alongside a reworked bill, that was unveiled Monday with a handful of technical changes and one notable concession. As updated, SB 2 will force cities, counties and other taxing entities to receive voter approval before raising 3.5% more property tax revenue than the previous year — a change from the 2.5% trigger originally proposed. School districts would still face the 2.5% threshold under the version of the bill approved Monday.

Revenue generated on new construction does not count toward the threshold. And small taxing units, with sales and property tax levies under $15 million annually, will need to opt into some of SB 2’s provisions in an election.

Municipal leaders and lawmakers like Seliger, a former mayor, have called the 2.5% figure punitively low and said it would cripple local governments’ ability to provide public safety services. A 1 percentage point increase is unlikely to appease them; the Senate and House deadlocked at higher thresholds of 4% and 6%, respectively, in 2017.

But a long-shot bid to replace the 3.5% figure with 6% did not advance Monday. Other amendments — which would have exempted hospital districts, community colleges and certain municipal services from parts of the property tax legislation — all failed, largely on party-line votes.

And when state Sen. Beverly Powell, D-Burleson, described the possible effects of SB 2 on her local cities and counties, it prompted the author of the legislation, Sen. Paul Bettencourt, R-Houston, to respond: “This is where my teddy bear becomes a grizzly bear.” Her amendment was not adopted.

One successful change came from Sen. Pete Flores, R-Pleasanton, who proposed allowing the money counties spend on indigent defense to be factored into their tax rates.

After three hours of debate, SB 2 passed on an 18-13 vote, with Seliger joining the upper chamber’s Democrats in opposition. It was then given final approval on an 18-12 vote — with Sen. Eddie Lucio, Jr., D-Brownsville, voting present — and will be sent to the House for further debate.

The lower chamber, meanwhile, has postponed discussion of its property tax reform legislation until April 24. Unlike the Senate’s version, the House has exempted hospital districts, community colleges, emergency service districts and school districts from abiding by a 2.5% election trigger — a move that has inflamed far-right lawmakers and activists, who say homeowners will feel scant relief if those entities are exempted.

Currently, taxing units can bring in 8% more property tax revenue before voters can petition for an election to roll back the increase. SB 2 and the companion measure in the House would make those elections automatic and would make a battery of widely supported reforms designed to increase transparency and utility for taxpayers.

The state’s Republican Governor, Greg Abbott, applauded the bill’s advancement. The upper chamber has taken “action to deliver on the promise of reining in skyrocketing property taxes,” Abbott said in a statement. “Meaningful property tax reform is one step closer to becoming a reality.”

The “nuclear option”

SB 2’s progress Monday followed a months-long stalemate in the upper chamber, culminating in a stalled attempt to bring the measure before the full Senate for the first time last Thursday. That evening, after hours of closed-door negotiations, Patrick informed several Democratic senators that if no deal was reached by Monday, he would exercise a nuclear option — blowing past a tradition that requires three-fifths of senators to vote to bring a bill to the floor.

Patrick appeared fully prepared to take that route. But the maneuver — unheard of in recent memory — was ultimately not necessary.

School districts

Even after Monday’s modifications, a key difference between the House’s and Senate’s legislation is their approach to school districts.

House Bill 2 no longer contains language about schools, and leaders in the lower chamber have said another measure — approved by a wide margin in early April — will reduce school districts’ tax rates by 4 cents per $100 of taxable property value.

The most recent draft of SB 2 reins in increases to school district tax rates using language that appears similar to what was in the original version of the bill — language Bettencourt’s office once referred to as a placeholder. According to the Texas Taxpayers and Research Association, a business-backed association, the provision would actually allow school districts to increase their tax rates without voter approval, as long as the rate increase was less than 2.5%. Currently, school districts must go to voters if they raise taxes above $1.04 per $100 valuation up to the maximum $1.17.

“An initial attempt at a one-size fits all solution was included in HB 2 and SB 2 as introduced — but however well-intentioned, the school language didn’t work,” Dale Craymer, TTARA’s president, wrote in a critique of the bill.

He has said the House’s school finance legislation, which would lower school district tax rates statewide, provides “both tax relief and tighter constraints on future tax increases.”

Nevertheless, an attempt from Sen. Kirk Watson, D-Austin, to strip school district language from SB 2 swiftly failed Monday. Watson, a former mayor, later said the House’s education bill — which was removed from a schedule indicating it would be heard in committee this week — was being held hostage to pass the upper chamber’s property tax measure.

“SB 2 is not the place for the debate as it relates to school district taxes,” he said.

Abbott has said school districts must have a limit on their ability to increase property owners’ tax rates by more than 2.5%.

“Keeping my promise to the people”

Speaking to reporters after SB 2 was given preliminary approval, Bettencourt said the bill tackled the “most important issue that the state is facing this legislative session” and represented a “historic step.” He and other proponents of the measure often note that the current rollback rate of 8% was set during a period of high-inflation during the late-1970s and never revisited.

Bettencourt thanked Patrick for his leadership, saying it “may not have occurred in the way that it did” without the lieutenant governor’s warning.

Patrick, meanwhile, reiterated the need for property tax reform and seemed to stand by his threat to use the “nuclear option.”

“When you run for office, you tell the people what you’re going to do and then you go do it,” he said. “That’s a statesman. You don’t get tangled up in some procedures and practices that the people back home don’t know about or don’t care about. What they want is tax relief and my job as lieutenant governor is keeping my promise to the people.”

Seliger, the Republican senator, said he has alternate legislation that would help reduce property taxes, including by capping the rate at which appraisals grow — a proposal Abbott seems to have shown support for. The state’s top three leaders have also backed a plan to use a one-cent sales tax increase to lower property taxes.

The governor and House Speaker Dennis Bonnen have so far seemed confident a special session will not be needed to hammer out the reform legislation.

“I have tickets to the U.S. Open and I’m going,” Seliger joked Monday. “For at least a day.”

Read related Tribune coverage

Aliyya Swaby contributed reporting.

Disclosure: The Texas Taxpayers and Research Association has been a financial supporter of The Texas Tribune, a nonprofit, nonpartisan news organization that is funded in part by donations from members, foundations and corporate sponsors. Financial supporters play no role in the Tribune’s journalism. Find a complete list of them here.


Here’s how different proposals at the Texas Capitol could change property tax bills

Top state leaders have toured the state promising Texans they will feel less financially cramped by oversized property tax bills after the legislative session.

So far, the two legislative chambers have taken different approaches to keep that promise, meaning they will have to hash out an agreement this spring.

To make a difference in the average homeowner’s tax bill, lawmakers must address school districts, which levy more than 50 percent of all local property taxes in the state. A few proposals on the table would provide some amount of tax relief for residents with different home values.

How would those proposals affect you next year? It depends on where you live and what kind of home you own.

House Bill 3

The House’s comprehensive bill on school finance and property tax reform, authored by Public Education Chair Dan Huberty, R-Houston, would lower school district tax rates statewide by four cents per $100 of taxable value. It would also further buy down property taxes for school districts with higher tax rates and limit their ability to immediately raise them. This would affect both homes and commercial properties in school district boundaries.

After getting voter approval in 2018, Dallas ISD now taxes at the maximum rate of $1.17 per $100 of taxable value; under this bill, it would tax at $1.09. Round Rock ISD, a suburban district, would tax at $1 per $100 of taxable value, instead of $1.04.

The original version of the bill would spend about $2.7 billion on property tax relief. HB 3 passed out of the House Wednesday with a nearly unanimous vote.

Senate Bill 5

A bipartisan group of state senators, including the upper chamber’s property tax champion, Paul Bettencourt, R-Houston, has proposed expanding an exemption homeowners are entitled to receive on the value of their home for school district taxes.

The legislation would boost the exemption from $25,000 to $35,000 if voters pass a constitutional amendment, and it would make up the lost school district funding by using revenue from oil and gas production taxes. (Because this bill would require voter approval, it probably would not kick in until 2021.) It has a biennial cost of about $1.5 billion.

Unlike HB 3, this bill would not affect school districts’ ability to set tax rates. It has been heard in the Senate Property Tax Committee, which has not taken a vote.

House Bill 4352

The House Democratic Caucus has championed this bill by state Rep. Ramon Romero Jr., D-Fort Worth, as a key portion of its “Texas Kids First Plan” for public education. It would double the exemption homeowners are entitled to on their home values for school taxes, from $25,000 to $50,000, if voters pass a constitutional amendment.

The bill does not include language on exactly how it would reimburse school districts for the lost funding. Like SB 5, it would not affect school districts’ ability to set tax rates.

HB 4352 has a biennial cost of about $3.4 billion, but would not kick in until 2021, because of the voter approval needed. It has not been taken up by a committee.

Read related Tribune coverage


The 86th Legislature runs from Jan. 8 to May 27. From the state budget to health care to education policy — and the politics behind it all — we focus on what Texans need to know about the biennial legislative session.


How do Texas governments calculate your property taxes? Here’s a primer.

As Texas’ population boom fuels demand for more housing, the property values that drive tax bills are also rising. State lawmakers this legislative session want to slow the increase in property taxes that Texans pay each year — something they’ve been trying to do for years with little success.

That’s because property taxes are a huge revenue stream for local governments, whose officials say limiting their tax collection authority could hamstring what they budget for first responders, roads and other essential services.

Simply determining how much a Texas property owner owes in taxes is a complicated process involving multiple government entities — mainly cities, counties and school districts — and the final tax bite is largely determined by the appraised value of a property set by a local appraisal district.

As legislators prepare to spend the next several months debating how to keep property taxes from rising so fast, here’s a look at the process that determines how much property taxes Texas landowners owe their local governments each year.


Note: Because the appeal process can be expensive and involve attorneys’ fees, most property owners going this route are businesses.

Source: Texas Tribune research

Coming Thursday: A look at how local governments’ revenues determine tax rates.


The 86th Legislature runs from Jan. 8 to May 27. From the state budget to health care to education policy — and the politics behind it all — we focus on what Texans need to know about the biennial legislative session.


Analysis: Here’s your property tax cut, maybe. Heads up — it’s expensive.

Willing to give up some sales tax exemptions to pay for a cut in your local property taxes?

That proposition, from state Rep. Drew Springer, R-Muenster, is the first serious stab at a property tax cut in the current Texas legislative session.

Lawmakers in the House and Senate are already working on legislation designed to slow the growth of property taxes. But those bills, pushed by the governor, lieutenant governor and speaker of the House, wouldn’t lower existing taxes; instead, they would require voter approval for tax revenue increases of more than 2.5 percent.

Springer wants cuts. But it would cost a small fortune, more than $6 billion a year, and he’s a Republican, and he certainly doesn’t want to try to persuade a conservative Legislature to raise taxes. He wouldn’t actually cut them, either: He’s proposing a swap, cutting local school property taxes by getting rid of some popular exemptions to state taxes.

Springer wants to raise $6.4 billion a year, mostly by getting rid of sales tax exemptions and rules that are in current law. The list has some darlings on it — popular exemptions that might be hard sells in the Legislature and in lawmakers’ districts. Springer would tax sales of motor fuel, on top of existing gasoline taxes; over-the-counter and nonprescription drugs; “non-nutritional” foods, like potato chips, coffee and tea; newspapers and magazines; cuts and stylings at beauty and barber shops; and auto maintenance and repair. The proposal would also end things like prompt payment discounts for retailers remitting sales taxes and the loophole for hybrid and electric vehicle registrations.

Each of those things has a constituency: sometimes a mob of people who’d be affected, sometimes a small group of powerful people who would lose a business advantage.

Previous runs at sales tax exemptions have fallen to pieces under resistance from taxpayers — or, to be more precise, nontaxpayers — who benefit.

But with his other hand, Springer is offering prizes for property taxpayers. Springer says he would give a 50-percent homestead exemption on school property taxes, exempt retail inventories from property taxes and use the balance to “compress” school property taxes by 10 cents — or to 90 cents per $100 property valuation, whichever is higher.

His legislation hasn’t been filed yet, but Springer says the average Texas homeowner’s property taxes would be cut by $1,400. This is a good time to remember the last time state lawmakers spent a bunch of money and promised big cuts in property taxes. The savings promised by then-Gov. Rick Perry in 2006 was $2,000 per homeowner. It didn’t work out to be anywhere in that vicinity when the accounting was all in, and that experience has made some lawmakers skittish about promising property tax relief.

Springer apparently isn’t one of those. He also says his idea would lower the number of districts that pay locally raised property tax money to the state — a system called “recapture” by the education experts and “Robin Hood” in most political town-hall meetings. He also projects that the state would carry a bigger load of public education spending than locals as a result.

If this was a commercial for a new prescription drug, it would have to carry some fine print at the bottom. Something like this:

May cause commercial and industrial property owners who don’t receive the full benefits to revolt, or throw up, or throw up and then revolt; depression among renters who might see no benefits at all in return for their higher sales taxes; a sudden descent on the Texas Capitol by car dealers, auto shop owners, and people with scissors and hair dyes; angst among car owners paying a sales tax on top of a gasoline tax when they fill up; and tears to the eyes of the kids who grab a bag of chips on the way home from school every day.

The plan could ease the pain of property taxpayers. The question is whether this — or other proposals like it that might be in the works — are worth the new pains they cause.

The 86th Legislature runs from Jan. 8 to May 27. From the state budget to health care to education policy — and the politics behind it all — we focus on what Texans need to know about the biennial legislative session.


Author: ROSS RAMSEY – The Texas Tribune

Analysis: Property taxes in Texas are high. Don’t expect the Legislature to change that.

Restrain, reform, rein in, restrict and limit are not synonyms for the word Texas property taxpayers crave: cut.

This is an alert: Your property taxes will not be falling, in spite of all the talk about easing property taxes that is emanating from the Texas Capitol.

State lawmakers can’t make property tax rates come down. They’ve tried. It didn’t make rates come down. And even trying is expensive: It would cost the state just under $2.5 billion to replace a dime’s worth of local school property taxes; that is, to lower the property tax rate by ten cents. On a $250,000 home, that would amount to overall savings of about $20 per month in property taxes.

But the state of Texas doesn’t levy property taxes — that’s the job of local governments. And it has proved to be impossible for state lawmakers to lower taxes they don’t control.

They can try to create conditions that could lower property taxes, increasing the state’s share of the costs of big programs like public education, public health, criminal justice and mental health. But because they don’t control either the appraisals of real estate or the tax rates imposed on those properties, Texas state lawmakers cannot guarantee a cut in your property taxes.

They hear a lot about it in town hall meetings and campaign visits, though, so you can’t blame them for trying.

The best recent example was in 2006, when then-Gov. Rick Perry and the Legislature embarked on an ambitious rebalancing of public school finance that included what was supposed to be a swap that raised state taxes on corporations in return for lower local school property taxes.

The swap amounted to a $7 billion reduction in what Texans would have paid without it, the Texas Taxpayers and Research Association, a business trade group, said at the time. But taxes didn’t drop. And Perry’s explicit promise that the average homeowner would save $2,000 came back to bite him during the 2006 race for governor.

Then-Texas Comptroller Carole Keeton Strayhorn, a Republican running for governor as an independent, ran a commercial that started with Perry’s ad running on a TV set. The script:

Perry: “We kept our promises to you. The average homeowner will receive a $2,000 tax cut.”

Strayhorn: “Have you gotten your $2,000 property tax cut yet? Don’t go running to your mailbox. Turns out, most seniors get nothing. And the rest of us? Just about $52. About enough each week to buy a can of soda. We need a government that talks straight with Texans and gives us real property tax relief. And real honesty. This grandma wants to shake Austin up.”

You might be surprised at the number of Texas officeholders — those who were in office at the time and those who came in later — who still remember that commercial. It has become an important bit of the current political folklore, passed from one generation of politicians to the next.

And that cautionary tale is baked into the current conversation about property taxes. Two years ago, Texas lawmakers failed to pass limits on the size of property tax increases that could be enacted without voter approval. The state doesn’t have a property tax — the Texas Constitution prohibits it. So the logic was to allow cities and counties and special districts to impose large increases only if voters said so. The legislation fell apart over where the limit should fall; the House said 6 percent, the Senate went for 4 percent, the governor came in with a late proposal for 2.5 percent.

They’re back with the same idea, more or less, paired with the kind of higher spending on public education that would make it possible for some school districts — maybe — to lower their own property taxes without making budget cuts in schools.

“Maybe” is not a word used in airtight promises.

A perceptible change in school finance — one that taxpayers could actually feel — would cost the state an enormous amount of money. And, as in 2006, the state can’t guarantee that taxpayers would actually receive the intended benefits.

So lawmakers have resorted to words that don’t rhyme with “cuts” when they’re talking property taxes. Maybe they can limit the size of future increases. That would give them something to talk about, and voters might appreciate the work.

But it won’t lower the high property taxes voters are complaining about that. And if they don’t see relief, neither will the politicians.

Author: ROSS RAMSEYThe Texas Tribune

Analysis: “Tax relief,” Maybe, but no Savings for Taxpayers

State officials are talking once again about your property taxes. Like you, they hate those taxes. A lot.

But they’re hoping to fool you, once again, into thinking they are going to lower the price of local government and public education.

None of their proposals or their recent actions would do that.

School property taxes are the biggest part of every Texas property owners’ tax bill. They are also the only local property tax that goes up and down primarily because of what happens in Austin.

State officials don’t set your school property tax rate; they just decide how much money local officials are required to raise.

In practice, it amounts to almost the same thing.

If the state spends less money per student, the local districts have to spend more. They get their money from property taxes, so property taxes go up.

And then, state officials complain — alongside property taxpayers across Texas — about rising property taxes.

The current long slide in state funding started in 2007 — right after lawmakers rejiggered the formulas and balanced state and local funding, with each covering 45 percent of the total cost of education and the federal government picking up the remaining 10 percent.

The numbers ten years later: Locals pay 52 percent, the state pays 38 percent and the feds are still at 10 percent.

According to the Texas Supreme Court about a year ago, local property taxes and the system they finance remain constitutional. Lucky for the state that’s not a criminal court, though: Taxpayers clearly feel robbed.

State officials can feel the heat of that ire. But their new budget doesn’t address the school finance problem. They killed legislation that would have put another $1.5 billion into public education — the only bill in the regular session that would have moved school taxes, if only indirectly and only a little bit.

And their effort to limit growth in property taxes levied by other local governments failed, too. Gov. Greg Abbott has said he will put that one taxesTxon the agenda of the midsummer special session. One version, passed by the Senate and apparently favored by the governor, would have required voter approval for any local property tax increases of more than 5 percent.

It wouldn’t save you any money — contrary to the rhetoric billowing from the Senate — but it could lower the speed at which your property taxes grow. It’s like promising a gazelle you can make the lions a little slower.

Texas lawmakers have replaced the idea of lowering state taxes with a new one: Complaining alongside taxpayers who want lower taxes. Actually doing something about it has remained out of reach.

They could replace an unpopular tax with a less unpopular one, but they have few options — none of them particularly lucrative. The Texas Lottery was an example of this, and it served mainly to underscore our widespread innumeracy: A surprising number of Texans thought state-run gaming would cover the full cost of public education in Texas. In fact, the Texas games earn the state about $2.5 billion very two years, about as much as taxes on alcoholic beverages and less than half as much as the (also) unpopular business franchise tax. Lawmakers budgeted $41 billion for public education over the next two years; the lottery will cover about 6 percent of that.

They could cut spending, except it has proven nearly impossible to do that in Texas, partly because the state budget is, relatively speaking, pretty tight, and partly because when you get down to it, the programs that would be cut are more popular than the tax cuts that might result.

People want roads and schools and prisons and whatnot, and the political experts who run the government — give them their due for getting into and then remaining in office — have ascertained that it’s more rewarding to keep current programs alive than to cut taxes.

That’s a safe assumption, isn’t it, since they haven’t cut those programs or whittled those taxes?

But state leaders can hear the voters, too, so they’re trying to force local governments to hold the line on taxes. They can’t provide any relief themselves, but maybe they can make someone else do it.

Read related Tribune coverage:

  • In their just-ended legislative session, Texas lawmakers mowed through a list of politically divisive issues that could have lasting effects on how others see a state that’s been known for years as a mecca for business. [link]
  • There’s a simple test to tell you whether the promise of a tax cut is really a tax cut: Is there money in your hand? [link]
  • Some Texas lawmakers want to kill the franchise tax that so many businesses hate. So far, so good. But it might leave a hole in the state’s pocket when it inevitably comes time to rebalance the state’s financing for public schools. [link]

Author:  ROSS RAMSEY – The Texas Tribune

Dan Patrick Unconvinced by House Action on Bathrooms, Property Taxes

After threatening to force a special session of the Texas Legislature unless lawmakers approve a “bathroom bill” and property tax legislation, Lt. Gov Dan Patrick on Monday appeared to be unconvinced by the House’s actions on the two issues.

“I share Governor Abbott’s concern about the lack of a rollback provision in Senate Bill 669 on property taxes,” Patrick said in a statement about a property tax measure the House passed Saturday that did not include a rollback provision for local tax increases. Patrick, like Gov. Greg Abbott, had indicated he wanted the House to approve Senate Bill 2, to require local governments that want to raise property taxes by 5 percent or more to get voter approval, but that proposal stalled in the House.

On the bathroom front, Patrick said he had concerns about the “ambiguous language” the House approved as an amendment Sunday to address bathroom use by transgender Texans in public schools because it “doesn’t appear to do much.” The measure the House approved would require schools to provide single-stall restrooms, locker rooms and changing facilities to students who don’t want to use facilities designated by “biological sex.”

“There is still time for the House and Senate to address these concerns — which are both priorities for Texas voters — in a meaningful way,” Patrick said.

Throughout the session, Patrick and Straus have been at odds over what should be the Legislature’s priorities. The lieutenant governor’s statement comes after a weekend of House votes on the issues that have emerged as sticking points in his efforts to push for Abbott to call a special session. The regular legislative session ends May 29.

Last week, Patrick had said he was prepared to go to a special session if the House did not act on the property tax issue and some version of a “bathroom bill.”

Abbott said both pieces of legislation were also priorities for him, though he has not publicly threatened a special session over the two items.

But following the House’s vote on the bathroom amendment, House Speaker Joe Straus said in a statement that the governor made clear “he would demand action on this in a special session.”

Patrick had pushed for the House to move on Senate Bill 6, the measure his chamber passed out in March, to regulate bathroom use for transgender Texans or to amend a bill with language from a related House measure. Both measures stalled in the House, which on Sunday approved a more narrow proposal.

Over the past few months, Straus was reticent to allow a vote on the Senate’s bathroom proposal, saying the issue felt “manufactured and unnecessary.”

And ahead of the House’s vote on the property tax measure — which was set on the House calendar ahead of Patrick’s special session ultimatum — Straus argued that the House had addressed the issue of offering taxpayers relief by focusing on a measure intended to reform the state’s complex school finance system.

A spokesman for Straus did not immediately respond to a request for comment on Patrick’s statement.

Read related coverage:

Author:  ALEXA URA – The Texas Tribune

Analysis: The Taxes Texas School Districts are Afraid to Cut

A state law that’s supposed to keep a leash on school tax increases might be preventing temporary tax breaks in the Texas districts with the highest tax rates. But reversing it could make it easier to raise taxes.

It’s hard to tell the tax hawks from the tax doves sometimes. A legislative proposal meant to make it easier for school districts to grant temporary tax rate cuts was derailed this week by opponents who say it would also allow districts to raise taxes without voter approval.

It would do both things — and either of them would probably make property taxpayers happy.

Currently, school districts with tax rates of $1.04 or more can’t raise their rates without voter permission. They also cannot temporarily lower their rates without holding another vote when it’s time to return to the original higher rate.

Several lawmakers in the Texas House and Senate have proposed allowing a school district that’s already got a tax rate above $1.04 to lower its rate temporarily without having to hold a new election to raise it back to the original rate. If they could do that, taxpayers would be more likely to get those temporary cuts.

A district with a rate of $1.15, for instance, would be allowed to cut the rate to $1.10 for a year and then return to $1.15 without going to voters for permission. The logic is that voters had to approve the original rise to $1.15, so there’s no need to ask them again.

House Bill 486, sponsored by state Rep. Gary VanDeaver, R-New Boston, made it to the full House but was swatted down by his colleaguesttxxt on a technicality. He has time to fix it and send it back to them. The Senate is poised to consider identical legislation next week.

State Rep. Jeff Leach, R-Plano, is the one who called the foul on VanDeaver. With some amendments, Leach said, he might be persuaded to support VanDeaver’s legislation.

Leach’s home school district — Plano ISD — is a prime example of the districts in question, and his taxpayers could be among the proposed legislation’s beneficiaries.

PISD voters overwhelmingly approved a $481 million bond package in May 2016. Among other things, that money gives the district temporary budget relief, according to School Board President Missy Bender — enough to cut spending by $15.6 million and to cut $7.7 million from the district’s “Robin Hood” payment to the state this year.

But the district expects it will need to revert to its current tax rate pretty quickly. Under current law, it could cut the tax rate now — by about 3.8 cents, Bender says — but would have to hold an election to return to the current rate later. Alternatively, the district can leave things be, keep charging taxpayers the higher current rate and save the unspent proceeds for a future rainy day.

“I can’t keep it at the lower rate, but from time to time, I’d like to be able to save them money,” Bender said of the district’s property taxpayers.

Roughly a third of Texas school districts — 438 — had maintenance and operations tax rates above $1.04 in 2016, according to the Texas Education Agency. Most of those — 329 — had moved their rates all the way up to $1.17, the highest rate allowed under normal circumstances.

The current law encourages districts to leave the tax rate alone, Bender says — to skip the temporary cut and bank the money. That avoids the district’s risk and expense of a future election. Supporters of current law contend the districts should lower rates whenever they have the opportunity and shouldn’t raise them under any circumstances without voter approval.

Under the proposal stalled in the House this week but still alive in the Senate, her district would be able to lower its rate by 3.8 cents now and return — without a new vote — to its current rate later on. Supporters of changing existing law, a group that includes Plano and most of the state’s other school districts, argue taxpayers who’ve once approved a tax rate shouldn’t be asked to approve it all over again after a temporary tax cut.

The cuts in question would probably not be huge — Plano could save its average homeowner about $113 with a 3.8-cent cut this year, Bender says. But any cuts would probably be welcome; taxpayers only rarely get these temporary reprieves under current law.

“Boards are hesitant to lower the rate when they are able to do so because they would have to hold another election to return to the rate that voters had already approved,” state Rep. Donna Howard, D-Austin, told the House Ways & Means Committee at a hearing last month. Howard, who sponsored legislation identical to VanDeaver’s and made the opening argument for both of them, said any tax rate increase would be one that had previously been approved by voters.

As the districts read it, this is a choice between temporary tax cuts and no cuts at all. As the defenders of current law see it, the decisions over rising tax rates ought to be in the hands of voters and not school boards.

But only one side is dangling a tax cut.

More columns from Ross Ramsey:

Author:  ROSS RAMSEY – The Texas Tribune

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