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Texas leaders want voters to OK property tax revenue growth over 2.5 percent. They couldn't get 4 percent in 2017.

From left: Sen. Paul Bettencourt, R-Houston; Lt. Gov. Dan Patrick; Gov. Greg Abbott; House Speaker Dennis Bonnen, R-Angleton; and Rep. Dustin Burrows, R-Lubbock, speak at a news conference addressing property tax reform. Jan 31, 2019.
From left: Sen. Paul Bettencourt, R-Houston; Lt. Gov. Dan Patrick; Gov. Greg Abbott; House Speaker Dennis Bonnen, R-Angleton; and Rep. Dustin Burrows, R-Lubbock, speak at a news conference addressing property tax reform. Jan 31, 2019.
Miguel Gutierrez Jr. / The Texas Tribune

Flanked by the state’s top legislative leaders, Gov. Greg Abbott on Thursday announced that both chambers of the Texas Legislature will push to curb property tax growth by limiting how much money local governments collect without voter approval.

Abbott was joined by Lt. Gov. Dan Patrick and House Speaker Dennis Bonnen, as well as the heads of both chambers’ tax-writing committees, in making the announcement. Their news conference followed the filing of two identical bills in both chambers, Senate Bill 2 and House Bill 2.

Abbott said it was “completely unprecedented” for lawmakers to be so closely aligned on such an important issue this early in the session.

“Most importantly, it’s a testament to the voters in this state,” he said. “The voters demanded this, and this demonstrates that the Texas Legislature is responsive to the needs of our voters.”

While the two chambers could not agree on a property tax plan during the 2017 session, the legislation filed Thursday sets the threshold well below the amounts that drew heavy opposition from city and county leaders two years ago. State officials warned local leaders Thursday, though, that the chambers and the governor will be united this year. And, they said, local leaders should come to Austin armed with solutions and not to just voice opposition.

“Today sends a clear message: That day is over,” Patrick said.

Still, local officials are almost certain to to push back. They have said that such a low revenue cap could hamstring their abilities to raise money needed to maintain streets, pay first responders and fund other city services.

Thursday’s bills would require voters to approve a tax rate that allows government entities like cities, counties and special districts to collect an additional 2.5 percent in revenues from existing property compared with a previous year. The threshold would not apply to small taxing units — those whose potential property and sales tax collections are $15 million or less.

Even though the Senate and House couldn’t agree on where to set a revenue cap two years ago, the proposed 2.5 percent threshold is well below both the proposals that previously failed.

Currently, cities and counties can collect an additional 8 percent in revenues without involving voters. But even then, residents must collect enough signatures to force an election. The new pair of bills would automatically trigger what’s called a rollback election. If voters shoot down the measure, the government entity would have to set a tax rate that allows it to only collect revenues from existing properties that are less than 2.5 percent more than the previous year.

The rollback rate is also based on the appraised value of properties within a taxing unit’s borders. That means a city or county could hit the rollback election threshold without changing its trax rate – or even if they lower the tax rate – if there is a significant increase in local property values.

But Bonnen, for his part, called the unveiling of the legislation “the first step in solving the biggest problem facing Texas taxpayers.”

The state leaders were joined at the news conference by state Sen. Paul Bettencourt, R-Houston, the chairman of the new Senate Property Tax Committee, and state Rep. Dustin Burrows, R-Lubbock, the new chairman of the tax-writing House Ways and Means Committee. The participants traded some jokes as they rolled out the legislation, at one point musing that they should call it “HB 2.5” instead of HB 2 — a reference to the proposed rollback rate.

This is a developing story and will be updated.


Source: Texas Tribune Government

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