Analysis: Something’s missing from the opening bid for property tax “relief” in Texas

“Analysis: Something’s missing from the opening bid for property tax “relief” in Texas” was first published by The Texas Tribune, a nonprofit, nonpartisan media organization that informs Texans — and engages with them — about public policy, politics, government and statewide issues.

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State leaders are picking up property taxes right where they left the issue in mid-2017, proposing a requirement that voters approve any local property tax increase of more than 2.5 percent before it can take effect.

Need a quick refresher on why this is still on the table? The House wanted a 6-percent limit in 2017. The Senate wanted 4 percent. The governor wanted 2.5 percent. And by the end of the legislative session, the governor, lieutenant governor and speaker of the House were in such a snit over that and other issues that they suspended their customary once-a-week breakfast.

Their eggs and ham had, in effect, gone green.

Two things stood out at Thursday’s joint appearance of Gov. Greg Abbott, Lt. Gov. Dan Patrick and newly elected House Speaker Dennis Bonnen. They are still in sync on everything like taxes and breakfast. They and the legislative sponsors of property tax bills — Sen. Paul Bettencourt, R-Houston, and Rep. Dustin Burrows, R-Lubbock — gathered for the news media to say they were on the same wavelength, filing identical bills in the House and Senate.

That brings us to the other notable thing: They were so tuned in to their harmonic convergence, they didn’t talk much about what their legislation would actually do, leaving the details to the bill sponsors to explain later.

They did say they were going for a 2.5-percent growth limit on property taxes in local school districts, cities, counties and other government bodies. It’s aimed at overall taxes, a leash on the overall mix of property values and tax rates that determine what happens to the average taxpayer’s bill. Anything that increases a local government’s property tax revenues by more than that would trigger an automatic November election asking voters for permission.

You might wonder how public education is going to get more financial help, as proposed by this same group of elected officials, if the state is going to limit school districts’ ability to levy taxes.

The short answer is that the state’s going to pay for it. The House’s proposed budget for the next two years adds billions to what the state is spending on schools. The Senate’s plan doesn’t spend as much, but the increases are significant (and in one case, more specific: Patrick has proposed $3.7 billion in teacher pay raises). Abbott floated the idea of holding down local taxes and tax increases — an answer to loud and persistent complaints about property taxes — and increasing state spending to fill the gap. And Comptroller Glenn Hegar, the fourth official at those weekly breakfasts, has proposed requiring the state to pay at least 40 percent of the cost of public education, along with any increases due to inflation.

But they haven’t said where the state money will come from. Nobody in the state government’s high places has proposed raising a tax, cutting other state spending to produce money for education, or weeding through the state’s tax exemptions and loopholes to shore up the state’s share of the public education load.

Another number from Hegar: The state will pay 36 percent of the cost of public education in the 2018 fiscal year. It would have to spend money — and apparently have it to spend, this time — to bring its share to 40 percent, and more still to cover regular inflation increases.

None of that is in this first piece of legislation. This one, with the ambitious title “Texas Property Tax Reform and Relief Act of 2019,” isn’t about school finance and doesn’t address what might happen to the local governments that need more money than the proposed caps allow, other than persuading their voters to approve bigger increases.

For now, it’s a fresh attack on the rising property taxes — an attack encouraged by voters across the political spectrum in Texas. They don’t like property taxes.

Despite the show of togetherness among state leaders, this was just their opening bid. Property tax reform won’t include property tax cuts. Local governments would like to end unfunded mandates from the state before they consider state limits on how they raise money. School districts, which weren’t included in the 2017 legislation, might be expected to raise the same kinds of objections the cities and counties raised last time.

Caps like these were a hard sell two years ago and ultimately fell short. The camaraderie of state leaders is a selling point. The content of the legislation is the hard part.