New Property Tax Bill, Same Fuzzy Math: An Update

/, Texas Legislature, Where Money Goes/New Property Tax Bill, Same Fuzzy Math: An Update

This Saturday the Texas House will take up Senate Bill 1, a dangerous bill that would limit the ability of local governments to raise the revenue needed to pay for public safety, health care, parks, libraries and other services their communities want.

How would it work? Under current law, local governments can choose to increase their property-tax revenue (not including taxes from new construction) by up to eight percent a year. This can happen, for example, in response to demands by residents for better or expanded services. If local leaders propose a tax increase larger than eight percent, then voters may petition for a “rollback election” that would “roll back” the proposed tax increase to the eight percent limit. The House version of SB 1 would cut the cap to six percent and require a special election, without the need for a petition.

The Dallas Morning News and others have thoroughly debunked the fuzzy math that the bill’s Senate author and others have been using to justify their plan. If legislators really want to lower property taxes, they should remodel our outdated school finance system and commit the state to its fair share of investing in our children’s future.

Instead, the dangerous proposal put forward by SB 1 would interfere in local decisions and hamstring the ability of Texas’ cities and counties to address the changing needs of their residents. In fact, a lower rollback rate might actually increase annual taxes as responsible local financial officers attempt to build up cash reserves against the possibility of a future emergency that would require a higher tax rate.

Dick Lavine focuses on building state and local revenue systems that meet Texans' needs. Before coming to the Center in 1994, he was a Senior Researcher at the House Research Organization of the Texas House of Representatives for ten years. He is a Chartered Financial Analyst and served for many years as a member and chairman of the Board of Directors of the Travis Central Appraisal District. He is also a member of the Executive Board of AFSCME Texas Retirees, the statewide union local of retired public employees. The Equity Center named him the 2011 Champion for Equity for his work to reform our tax system to ensure it can adequately support public education and other public services. He earned a Bachelor of Arts in Economics, magna cum laude, from Harvard College in 1969, and a Doctor of Jurisprudence, cum laude, from the University of Pennsylvania in 1975.

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