America's Property Tax Advisor

Showdown Looms Over Texas Tax Reform


As the 85th Texas Legislative Session begins, a fight is brewing over a property tax reform bill. Proponents say the Texas Property Tax Reform and Relief Act of 2017 will give citizens more control over how their property tax dollars are spent. Opponents argue the bill will compromise the ability of local governments to provide essential public services.


Reducing the Rollback Rate


SB 2 would require cities and counties to seek voter approval for any property tax rate increase that exceeds 4%.


When the law was originally written in 1979, it contained a 5% rollback rate. Because of hyperinflation, it was raised in 1981 to the present 8% rate. Inflation is far below that rate now.


Sponsor of SB 2, Senator Paul Bettencourt, argues that as property appraisals in Texas increased with the booming economy, local taxing entities should have cut their tax rates because they were already getting more money from land valued at higher prices.


Statewide data from 2005 to 2015 shows tax levies increased 93% for special districts, 82% for counties, 71% for cities, and 39% for schools, according to a 90-page report by the Senate Select Committee on Property Tax Reform and Relief.


Local Leaders Speak Out


Municipal leaders have railed against SB 2, claiming it would restrict the flexibility of local governments to pay for police and firefighters, build new roads, and provide crucial services.


Officials in San Antonio, Austin, San Marcos, and New Braunfels released a statement saying they would have collectively lost $770 million over the past decade if SB 2 were in effect.


Austin Mayor Steve Adler said in a press release, “We should not risk police, fire fighting, EMS, parks, safety nets, and transportation projects. It’s risky and not real tax relief."


Senator Bettencourt says the cry that SB 2 will devastate essential services is "just nonsense" because local governments can simply go to the voters and seek approval for increased spending. "I'm trying to keep taxpayers from bleeding to death on their tax bills," Bettencourt said.


Hopefully as the facts present themselves in the numerous meetings and hearings that are sure to occur over the next months of the legislative process, a wise and informed decision on the fairness and accuracy of various claims will be established.