Se­nate ap­proves prop­erty tax limit

Tax hike of 5 per­cent or more would trig­ger au­to­matic ref­er­en­dum.

Austin American-Statesman - - FRONT PAGE - By Sean Collins Walsh scwalsh@states­

The Texas Se­nate on Tues­day voted 18-12 to ap­prove a bill that would trig­ger an au­to­matic ref­er­en­dum if a city or county raises prop­erty taxes by 5 per­cent or more.

Cur­rently, a tax rat­i­fi­ca­tion elec­tion only takes place if lo­cal gov­ern­ments raise taxes 8 per­cent or more and if tax­pay­ers pe­ti­tion to force the ref­er­en­dum.

State Sen. Paul Bet­ten­court, R-Hous­ton, who au­thored Se­nate Bill 2, drummed up sup­port for the mea­sure, a top pri­or­ity of Lt. Gov. Dan Pa­trick, by hold­ing a se­ries of pub­lic hear­ings across the state lead­ing up to the leg­isla­tive ses­sion to air com­plaints from prop­erty tax­pay­ers rang­ing from big busi­nesses to low-in­come fam­i­lies.

“When you have both tax­pay­ers in the need­i­est por­tion of so­ci­ety as well as the largest tax­pay­ers of the state hav­ing prob­lems with tax relief, we need ac­tion,” Bet­ten­court said on the Se­nate floor Tues­day. “Given the mag­ni­tude of prop­erty tax in­creases, we need real re­form now.”

Democrats, joined by city and county of­fi­cials, fiercely op­pose Bet­ten­court’s bill, say­ing that it would tie the hands of the lo­cal elected rep­re­sen­ta­tives who know their com­mu­ni­ties best and that prop­erty tax in­creases are of­ten the re­sult of “un­funded man­dates” from the state, such as de­mands on courts and pros­e­cu­tor’s of­fices adopted by state law­mak­ers.

The bill is nec­es­sary, Bet­ten­court has ar­gued, be­cause lo­cal prop­erty tax bur­dens have risen faster than Tex­ans’ in­comes. Bet­ten­court, how­ever, used ques­tion­able math to back up that claim by com­par­ing a statewide mea­sure of taxes to a mea­sure of in­di­vid­ual in­come, mak­ing it ap­pear that tax bur­dens have far out­stripped in­comes in re­cent years. Ap­ples-to-ap­ples com­par­isons show they have risen at roughly the same rate.

Bet­ten­court on Thurs­day dis­puted that crit­i­cism and pro­vided a packet of in­for­ma­tion. The first graph in that packet, how­ever, again com­pares the in­come of the me­dian Texas house­hold to the statewide to­tal of tax levies.

Bet­ten­court said an ap­ples-to-ap­ples com­par­i­son nonethe­less shows that prop­erty taxes have grown faster than in­come, point­ing to an­other graph that com­bines Texas data for taxes and fed­eral data for in­come. While other analy­ses us­ing fed­eral data for both cat­e­gories showed in­comes and taxes ris­ing in con­cert, Bet­ten­court’s com­bi­na­tion of state and fed­eral data showed prop­erty taxes ris­ing by 33.7 per­cent from 2010 to 2015, when in­comes went up only 13.9 per­cent.

The fed­eral tax data is “faulty,” Bet­ten­court said. “We’re us­ing the re­li­able Texas data on the prop­erty tax in­crease.”

In Texas, with no state in­come tax, the state gov­ern­ment re­lies pri­mar­ily on the 6.25 per­cent sales tax,

Sen. Kirk Wat­son, D-Austin, said that, be­cause cities and coun­ties spend most of their money on po­lice and courts, the bill would do more to hurt pub­lic safety than it would to cut taxes.

while coun­ties and school dis­tricts run al­most en­tirely on prop­erty taxes. Cities use a blend of sales and prop­erty tax rev­enue.

If adopted, the bill’s im­pact on prop­erty own­ers will be lim­ited be­cause its main pro­vi­sions don’t af­fect school dis­tricts, which ac­count for a ma­jor­ity of prop­erty tax levies in Texas.

Among the bill’s crit­ics were state Sen. Kirk Wat­son, D-Austin, who said that, be­cause cities and coun­ties spend most of their money on polic­ing and courts, the bill would do more to hurt pub­lic safety than it would to cut taxes. If law­mak­ers wanted to lower prop­erty taxes, he said, they should spend more money on schools, al­le­vi­at­ing the bur­den on dis­tricts.

“The Leg­is­la­ture is the real cul­prit on ris­ing prop­erty tax bills,” he said.

Ev­ery Demo­crat voted against the bill. The only Repub­li­can to op­pose it was state Sen. Kel Seliger of Amar­illo. State Sen. Donna Campbell, R-New Braun­fels, was ab­sent due to a death in the fam­ily.

The Cen­ter for Pub­lic Pol­icy Pri­or­i­ties, a left-lean­ing Austin-based think tank, said the bill amounted to “play­ing with fire.”

“This dan­ger­ous pro­posal is an af­front to the hundreds of fire­fight­ers, po­lice of­fi­cers and other first re­spon­ders — along with may­ors, county judges and oth­ers — who op­pose the bill,” said Dick Lavine, a rev­enue an­a­lyst for the group.

Bet­ten­court ini­tially pro­posed a 4 per­cent prop­erty tax in­crease as the “roll­back rate” for the au­to­matic tax ref­er­en­dums but raised it to 5 per­cent when the bill was be­ing con­sid­ered by the Fi­nance Com­mit­tee, which ap­proved it in a 9-5 party-line vote.

State Rep. Den­nis Bon­nen, an An­gle­ton Repub­li­can who chairs the tax-writ­ing Ways and Means Com­mit­tee, has filed a sim­i­lar bill in the House.


State Sen. Lois Kolkhorst, R-Bren­ham (left) talks with state Sen. Paul Bet­ten­court, R-Hous­ton, about SB 2 at the Capi­tol on Tues­day. The bill passed on an 18-12 vote.

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