Republican Texas House Speaker Dennis Bonnen says the state doesn’t have enough money to provide meaningful property tax relief this year.
Bonnen’s remarks came at a time when state Comptroller Glenn Hegar said the state could use an additional $500 million in tax revenue surplus money on property tax relief. The unexpected revenue brings the state’s surplus closer to $10 billion. At the start of the legislative session, the state’s surplus was projected to be slightly over $9 billion.
Rather than returning this to the taxpayer, critics note, Republicans have opted to spend it.
Parker County Republican Party Chairman J. Scott Utley sent a letter to Gov. Greg Abbott, Lt. Gov. Dan Patrick, Sen. Pat Fallon, R–Prosper, and Rep. Phil King, R–Weatherford, urging them to prioritize property tax relief. The letter also included a copy of a resolution the county party’s executive committee passed in an emergency meeting.
Utley’s letter urges Republicans to “use the surplus revenue as well as reductions in the growth of the Texas budget to provide property owners relief from the overwhelming burden of skyrocketing property taxes.”
The resolution notes that Texas began the fiscal year with a surplus of more than $9 billion, yet the proposed Republican House budget increases state spending by nearly $22 billion, or 15 percent.
According to Taxrates.org, Texas has the third-highest median property tax rate (1.81 percent) in the U.S., behind New Jersey and New Hampshire. According to the consumer financial site, WalletHub, Texas has the sixth-highest property taxes in the U.S. behind New Jersey, Illinois, New Hampshire, Connecticut and Wisconsin.
Fiscal conservative groups like Empower Texans and Texas Scorecard are urging lawmakers “to revisit the budget, cut spending, and dedicate a more substantial portion of the $10 billion surplus back to taxpayers struggling to pay skyrocketing property tax bills.”
Currently, the Texas House has budgeted about $2.7 billion for property tax relief while the Texas Senate has budgeted nearly $5.6 billion, Texas Scorecard notes.
The problem with the proposed legislation, critics argue, is that it doesn’t address the root of the problem. Senate Bill 2, for example, limits the percentage (3.5 percent) by which cities and counties can raise property taxes without voter approval, but it excludes appraisal rates.
Rep. Dustin Burrows, R-Lubbock, said what the state really needs is to implement appraisal reform. House Bill 2, which he proposed, “does not lower anyone’s property taxes,” but gives taxpayers more control over the process.
The bill is tied to House Bill 3, he said, “because we cannot leave this session without tackling both school finance reform and property tax reform.”
Versions of House Bill 3, authored by Rep. Dan Huberty, R-Houston, passed both houses of the legislature, and conferees are now debating differences between the House- and Senate-passed legislation.
Other critics note that the property tax measures are a good first step in what has been a six-year long battle. Currently, cities and counties can increase property taxes by up to 8 percent without voter approval. Anything above that requires voters having the option to petition for a rollback election.
Over the past three legislative sessions, the House and the Senate have agreed the percentage should be lower but couldn’t agree by how much. The fact that both the House and Senate have agreed to the 3.5 percent cap, Sen. Paul Bettencourt, R-Houston, said, is a “breakthrough.” Bettencourt has championed the rollback rate reduction legislation for years.
City and county government leaders oppose the measure, arguing it will hamper their operations.
“This arbitrary limit risks funding for public safety and infrastructure investment, and it fails to address school finance reform for actual tax relief,” San Antonio Mayor Ron Nirenberg said.
“We all want true, meaningful property tax relief,” Fort Worth Mayor Betsy Price said “However, a 3.5 percent revenue cap would create unintended consequences.”
According to the nonprofit organization, Truth in Accounting (TIA), San Antonio, Houston and Dallas already have significant debt burdens.
In its new report, TIA lists Dallas’ debt burden at $33,490 per taxpayers, Houston’s at $22,940, and San Antonio’s at $16,660.
“One might have expected better overall financial conditions for those Texas cities in light of economic and demographic trends in the last decade,” Bill Bergman, director of research at TIA, told The Center Square.
This article was first published on The Center Square.