Property tax growth limit passes Senate

Published 12:00 pm Monday, April 22, 2019

To The Leader

AUSTIN, Texas — The Senate approved a measure Monday aimed at reining in property tax rate growth, one that Lt. Governor Dan Patrick called “the biggest tax relief and reform bill we’ve ever passed”.  Under current law, jurisdictions can increase property tax rates as much as eight percent before taxpayers can petition for an election to approve or deny the rate hike. This “rollback” rate, implemented in the face of significant inflation in the late 1970s, is much too high and prices people out of their homes due to skyrocketing tax bills, according to Houston Senator Paul Bettencourt.  “Taxpayers can’t take it anymore,” he said. “It’s a growth curve that’s by any measure two or three times faster than their ability to pay.” His bill would move that rollback rate to 3.5 percent for most taxing entities and 2.5 percent for property taxes levied by local school districts. Additionally, rollback elections would be triggered automatically when rate increases exceed these limits and would be placed on the November ballot.   

The bill also includes a number of reforms intended to increase transparency and give property owners more information about who is taxing them and for how much, and how those rates have changed over time.   It also makes changes to the appraisal protest process, intended to level the playing field between appraisal review boards and property owners. Additionally, small taxing entities with less than $15 million in annual collections would remain at the eight percent rollback rate initially, but taxpayers in those jurisdictions would get a chance to vote to opt into the lower rollback rates on the uniform election date in May of 2020.  “With the attention on many, many appraisal reforms as well, I believe that this is a balanced package,” said Bettencourt. “It looks at the needs of rural Texas, as well as urban. More importantly, it looks at the needs of taxpayers all across the state.”

This bill was a major priority for state leadership.  “We made a promise, the Governor, the Speaker and I, when the session started that we’re going to focus on property tax reform [and] relief to you,”  Patrick said in a video statement released upon passage of the measure. “[Monday], was the first bill to pass as part of that package.” It now heads to the House for consideration, and Patrick said that with new leadership in that chamber, he believes the bill has a good chance of reaching the governor’s desk this session.  

Also this week, the Senate approved the remaining two bills in a four-bill package from Conroe Senator Brandon Creighton that would prohibit certain municipal regulations on private businesses.  “These bills protect the pro-business climate, something often referred to as the ‘Texas miracle’,” he said when offering the first of these bills before the Senate last week. “Other states struggle; Texas remains number one in job creation and unemployment is at a record low.”  Creighton went on to say that local ordinances mandating employee benefits and other practices undermine the predictability and free-market principles that have created this economic prosperity.

The bills passed last week would prohibit local ordinances mandating paid sick leave for employees of private businesses and those that set requirements for paid time-off.  The bills passed Wednesday would disallow cities from regulating scheduling practices and overtime pay policies, as well as from passing ordinances that prohibit employers from inquiring about past criminal history on applications.  These measures will now head to the House for further consideration.

The Senate will reconvene Tuesday, April 23 at 11 a.m.