Bexar County commissioners Tuesday took a stand against efforts by the Texas Legislature to impose revenue or appraisal caps on Texas counties and cities.
Senate Bill 2, spearheaded by State Sen. Paul Bettencourt (R-7), proposes a 4% property tax revenue cap, down from the current 8% rollback rate. So, if officials want to increase property taxes by more than 4%, then voters must approve it.
The four commissioners and Judge Nelson Wolff signed a resolution stating that such caps “would diminish local control and tie the hands of county officials by limiting their ability to provide essential services to address the needs of their citizens,” among other “detrimental” factors.
Twelve other Texas counties represented by the Alamo Area Council of Governments (AACOG) have signed the document, said Commissioner Kevin Wolff (Pct. 3), who brought the resolution to commissioners for consideration. Beyond Bexar County, he anticipates a “ground swell” of opposition to the measure from counties and municipalities across the state.
See a copy of the resolution here.
“SB 2 sounds good to the general public … but when you start to look at the details, it’s not good,” Commissioner Wolff, a Republican, said. “I can see a number of things coming out of this.”
Lt. Gov. Dan Patrick has said that SB 2, or the Property Tax Reform & Relief Act of 2017, is a priority for him this legislative session, which began Tuesday morning. Bettencourt and other proponents of the bill believe it will lower property tax rates despite Texas property values rising, and will keep local taxing entities – cities, counties, and school and hospital districts – from exploiting the system and burdening taxpayers.
“What happens is, tax bills go up faster than Texans’ pay checks,” Bettencourt told the Houston Chronicle in November. “What this means is that we’re putting too much pressure on where they live and work to pay property tax bills, and those bills must slow down.”
Bexar County has never gone over a 4% tax rate increase and has even lowered it a number of times over the last few years, Commissioner Wolff said.
“What would happen if you move that cap from 8% to 4%? You incentivize local government to go to the max,” he said, since officials would want to ensure they had ample funds to cover unforeseen emergencies. “I think you encourage the raising of local property taxes with a bill like this.”
Moreover, Center for Public Policy Priorities Senior Fiscal Analyst Dick Lavine told the Rivard Report, a lower revenue cap coupled with this legislative session’s tight state budget put cities and counties at a disadvantage when it comes to providing residents with necessary services, such as law enforcement and infrastructure improvements.
“The State is not going to be able to provide these service that people need, so it falls on the cities and counties and hospital districts. … They need to be able to raise the revenue necessary to serve the people,” he said. “It’s the State interfering with local government.”
A lower cap would create “this unnecessary administrative burden of having elections all the time,” Lavine added. “Most cities and counties come nowhere close to the rollback rate, but they have the flexibility if they need it.”
Commissioner Tommy Calvert (Pct. 2) said that a lower revenue cap is a “one-size-fits-all policy” and does not address cost drivers that affect counties such as unfunded state mandates and growing demand for services.
SB 2 opponents, such as Commissioner Wolff, see the bill as purely political rather than an accurate, effective mechanism to lower property taxes. For one, Wolff said, the majority of Texas’ property taxes – about 60% – go to school districts, while only about 14% go toward county services. Around 16% go toward city property taxes.
The State’s public education spending has been criticized as inadequate and inequitable. Critics say it fails to keep pace with the growing population and, thus, the number of students enrolled in public schools.
“If you really want to do something about property taxes, then you need to look at the whole pie, not just cities and counties,” Commissioner Wolff said. “If you’re not doing something that addresses the whole spectrum of property taxes then you’re really doing an exercise of futility. You’re playing good politics, but bad policy.”
Lavine said the revenue caps, which have caused controversy for years, are “going to be a big issue, and the Senate is probably going to move on it quickly.”
Commissioner Wolff will be keeping a close eye.
“Whether (the Legislature) will be serious about (lowering property taxes) or whether they want to just play politics with it, we’ll see in the next few months,” he said.