Lawmakers seek to aid tax reform efforts
AUSTIN — Property-tax reform efforts at the Texas Legislature appeared to get a boost Friday as the House unveiled a plan similar to one already filed in the Senate that would make rollback elections by taxpayers easier and cut the maximum tax increase allowed without an election in half.
House Bill 15, filed by House and Ways Means Committee Chairman Dennis Bonnen, R-Angleton, would drop the maximum increase allowed in a tax rate from 8 percent to 4 percent and would allow for automatic tax rollback elections in which voters could decide whether to go along with a higher rate increase.
The bill also includes changes designed to more fully inform taxpayers of when their taxes are going up, by how much and why. One of those changes would require local governments to annually publish a “No New Taxes Rate” — the rate that would raise the same amount of revenue as the previous year.
“Government only works when citizens can hold their leaders accountable, and accountability begins with transparency,” Bonnen said in a statement. “Our property tax system is needlessly confusing and discourages citizens from taking an active role in the local rate-setting process. The Property Taxpayer Empowerment Act will give Texans the information and clarity they need about their tax bill to hold local leaders accountable.”
State Sen. Paul Bettencourt, a Houston Republican and the former tax assessor in Harris County, applauded Bonnen’s plan, which he said closely tracks his Senate Bill 2 that would accomplish many of the same things.
‘A great step forward’
The fact that both bills are similar could mean that a final, negotiated version between both chambers will be easier to accomplish, a much different outcome than the legislative session two years ago when the House and Senate disagreed over various tax issues before finally approving an increase to the homestead exemption and other changes.
“It’s a well-thought-out property tax proposal,” Bettencourt said Friday of Bonnen’s bill. “The fact that these two bills do many of the same things is a great step forward, I think, to get meaningful property tax reform approved this year.”
Property tax relief has been a top issue for leaders in both chambers as many Texans face rising tax bills and property values continue to climb. While the tax rates are not set by the Legislature, lawmakers have faced growing complaints from property owners about increasing tax bills and criticism from local taxing entities, such as cities, counties and school districts, that want no limits on their ability to cover their growing costs.
Legislative leaders also are looking to cut or do away with the business franchise tax — a state tax on most businesses — even as they are considering cuts to many state programs due to a multibillion-dollar revenue shortfall because of low oil prices.
“The problem is that property values are going up like a rocket in many areas like Houston, and even though the tax rates are staying the same, people’s tax bills are continuing to go up,” Bettencourt said. “Both of these bills are designed to give taxpayers more power to say no.”
‘The odds are higher’
Bonnen’s bill also calls for the creation of a searchable statewide database to allow property owners to see how proposed tax rates would affect their bills. It also would make a property tax rollback election automatic once a government taxing authority proposes a rate that exceeds the rollback rate, no longer requiring citizens to gather signatures to petition for a rollback election.
The Texas Municipal League and local governments have announced their opposition to any attempts by the state to limit the authority of local taxing jurisdictions. Other organizations that monitor tax legislation predicted Friday the bills’ similarity makes it more likely that property-tax reform will be approved.
“Because the two bills are close ... the odds are higher than in past sessions,” said Dale Craymer, president of the Texas Taxpayers and Research Association, an Austin think tank on tax policy. “Bettencourt’s bill has provisions on appraisal review boards, among other things, and Bonnen’s requires better disclosure of what local jurisdictions are doing with their property taxes than we have now.”
Bettencourt’s Senate Bill 2, filed last November, would make it easier for taxpayers to challenge higher tax rates through ratification elections, would cut the ratification level to 4 percent and would remove petition requirements entirely.
It also would dictate that the election be held in November to increase maximum exposure to the public.