County tax cut proposal draws party lines
Republican commissioners hint they may break quorum
The three Democrats on Harris County Commissioners Court on Tuesday proposed cutting the overall property tax rate for the third year in a row, though the two Republican members left open the possibility they may force the adoption of a lower rate by skipping the vote in two weeks.
County Administrator David Berry warned that option would leave the county scrambling to pay for essential services, including debt service for the $2.5 billion flood bond program. Republican commissioners Tom Ramsey and Jack Cagle, however, see an opportunity to compel the Democratic majority to cut what they view as wasteful spending.
“We are having a budget challenge because of wasteful spending, not because of tax rates,” Ramsey said, citing the creation of new county departments and hiring outside consultants for various studies. “So, when we adopt a tax rate, it should be in that context.”
Each year, Harris County sets the tax rate for the county government, flood control district, hospital district and Port of Houston; the first three together comprise an overall rate that is used to calculate each property owner’s annual tax bill.
Berry proposed an overall rate of 58.6 cents per $100 of assessed property value. This would save the owner of a home valued at $200,000 with the standard 20 percent homestead exemption $27 since their last tax bill.
The three Democrats on Commissioners Court have expressed support for that rate.
Cagle’s pitch of 57.5 cents per $100 of assessed value, which included lower county and hospital district rates, would save this same homeowner $48.
The Precinct 4 commissioner said residents who still are struggling through the COVID-19 pandemic deserve more property tax relief.
“When we do the tax rate hearings, we need to be very careful that we make sure we don’t keep just the tax-spender mindset,” Cagle said. “The taxpayers, right now, are going through a rough season in their lives.”
Commissioners Court approved both rates for consider
ation at a public hearing Sept. 21, with a final vote scheduled for Sept. 28.
Harris County Judge Lina Hidalgo, one of the Democrats, said the Republicans’ proposal was politically popular but myopic. She predicted it would create massive financial problems for the county in the future.
“When you reduce taxes, it’s the best way to go. Everybody loves it,” Hidalgo said. “Over time, as the population and needs grow, when we cut the baseline, we’re going to be leading to less revenue per capita, and we’re already short on services.”
The debate also reflects the philosophical differences in how the members view county government. The Democrats want to make significant new investments in criminal justice, social services and education while the Republicans desire to stick to the historical role of county government, which kept the tax rate flat, cash reserves high and focused primarily on infrastructure.
The county began this fiscal year with a fund balance of $1.5 billion, including $100 million in its rainy day fund.
The pair of Republicans have rare power over the tax issue because while they frequently are out-voted 3-2 by the Democratic majority on the court, Texas law requires a quorum of four members to set tax rates.
That means they simply can skip the Sept. 28 meeting when the vote is scheduled and thwart the Democrats’ plan; Cagle and thencommissioner Steve Radack did this in 2019 to block a tax hike the majority had proposed.
If the court does not approve new tax rates before Oct. 15, by law they revert to what is called the no new revenue rate, a steeper cut than even Cagle had proposed.
Berry said that would leave the county unable to fully fund the budget Commissioners Court unanimously approved in February.
It also would constrain the county budget in coming years under a Texas Legislature-imposed revenue cap, which limits annual growth to 3.5 percent unless approved by voters.
“Over time, going to no new revenue rates are going to be very, very difficult for the county, given what we see in terms of rising health care and pension expenses,” Berry said. He cautioned that reverting to the bottom rates would leave the county flood control district without enough to pay debt service on the bond program voters approved in 2018. That also could spook creditors and threaten the county’s robust AAA bond rating.
All five court members agree falling behind on debt payments would be foolish.
Given the high stakes, Democratic Precinct 1 Commissioner Rodney Ellis prodded the Republicans to reveal their strategy. Ellis said he was willing to “put all his cards on the table” by committing to attend the Sept. 28 meeting, and asked if Cagle and Ramsey intended to break quorum.
They declined to answer; Cagle said he would not publicly announce his plans out of fear the majority would send the sheriff with a subpoena requiring his attendance.