Cut in taxes for county is proposed

A year after the Democrats on Harris County Commissioners Court tried but failed to approve a property tax increase, the budget office is recommending the court cut the tax rate.

One proposal by Budget Director David Berry would cut the county, hospital district and Port of Houston tax rates while increasing the flood control district rate, resulting in a net reduction of about 2.0 cents per $100 of a property’s assessed value.

A separate model that includes a slightly higher rate for the hospital district would net a 1.3-cent reduction. The existing overall county property tax rate is 61 cents per $100 of assessed value.

Whether either lower rate means a homeowner would see a smaller tax bill depends on how much a home’s appraised value has increased in the past year. The Harris County Appraisal District, not Commissioners Court, sets property values.

With no change, a home with a taxable value of $180,000, the county average, would see an overall tax bill decrease of $23 to $36.

Commissioners today plan to debate the tax rates during their annual midyear review of the county’s finances. The rate proposed by Berry would result in no new net revenue, meaning the county would collect the same amount in property taxes next year as it did this year.

Precinct 2 Commissioner Adrian Garcia said the plan strikes a balance between easing the burden on taxpayers while continuing to make needed investments in flood control.

“In the midst of this pandemic, I know that our neighbors need relief, and I am committed to doing our part in this difficult time,” Garcia said in a statement.

Harris County Judge Lina Hidalgo said a rate cut would be chal-

lenging for the county’s long-term financial health but is necessary to help residents through the pandemic. Precinct 1 Commissioner Rodney Ellis said he would come to the tax debate with an open mind, and said the county must continue to invest in flood protection, health care and increased economic opportunities.

Under a property tax revenue cap the Legislature passed in 2019, cities and counties are prohibited from raising revenue more than 3.5 percent without seeking approval from voters.

Under Berry’s recommendation, the flood control district portion of the overall tax rate would increase revenue by the full 3.5 percent, which budget documents say is needed topay off the debt for the $2.5 billion flood bond program approved by voters in 2018. Budget analysis estimated that year the bond would require the county to increase taxes by 2 to 3 cents for about a decade.

Last fall, before the revenue cap took effect, the three Democrats on Commissioners Court proposed a one-time tax hike of 2.26 cents, the first rate increase since the 1990s. Hidalgo argued the move was needed to create a roughly $200 million rainy day fund that could be used to ensure

the county can pay for essential services as the population rapidly grows.

That measure was defeated when the two Republican commissioners, Steve Radack and Jack Cagle, skipped the meeting during which the vote was scheduled to be held. A quirk in Texas law requires four members of Commissioners Court, rather than the simple majority of three, to pass tax increases. As a result, the court adopted a rate that would collect $195 million less than the Democrats had proposed.

Commissioners Court has been able to find other sources of revenue, however. On a party line vote earlier this month, the court approved a plan to divert a portion of toll road revenues— a $300 million lump sum and then $90 million annually — for other uses. Historically, excess toll road revenue had been restricted to road infrastructure projects.

In a rare instance of unanimity, court members agree that flood control should be a priority for funding. The $2.5 billion flood bond, even when adding expected state and federal matching funds of more than $2 billion, does not come close to fully protecting the county from 100-year storms. Flood control district engineers put that figure as high as $30 billion.