Local leaders decry proposed property tax overhaul

County and municipal leaders from across the state — including Fort Worth Mayor Betsy Price — packed a legislative hearing Tuesday to denounce a proposed property tax overhaul that they said would undercut local control and force reductions in services such police and fire protection.

But State Sen. Paul Bettencourt, R-Houston, defended his bill as an urgently needed reform to rescue property owners from years of soaring tax rates, saying that many Texans are being taxed “out of their homes and businesses.”

Senate Bill 2, also known as the Property Tax Reform and Relief Act of 2017, resulted from hearings in seven cities that Bettencourt headed in response to citizen demands for lawmakers to reign in property taxes. Texas has the fifth highest median tax rate in the country.

The most volatile element in Bettencourt’s bill would cut in half the amount a tax rate may rise before voters could hold an election to roll back taxes. Now an increase of more than seven percent is required for a rollback election but the threshold would be lowered to four percent under Bettencourt’s bill.

“We’re all in favor of tax relief but this bill doesn’t provide tax relief,” said Price, who called the measure “a one-size-fits-all” approach that would effectively put revenue caps on county and municipal governments, hobbling their ability to serve constituents. “Honestly, I am incredibly worried at attempts to remove local authority of our cities.”

Price’s testimony reflected the sentiments of hundreds of city and county leaders, as well first responders, who descended on the capitol to register their opposition before the Senate Finance Committee, chaired by Sen. Jane Nelson, R-Flower Mound. Nearly two-dozen mayors in Nelson’s North Texas district, including Price, signed a letter urging Nelson to oppose the bill.

Witnesses waiting to testify at the hearing stretched down a capitol hallway and quickly filled up the finance committee room as the doors opened. Senate staffers opened two overflow rooms, which also had standing room attendance.

Tarrant County Tax Assessor-Collector Ron Wright expressed support for the bill and sparked an outburst of laughter with a folksy assessment of the rollback feature. “You can warm your boots in the oven, but that doesn’t make them biscuits, and calling a rollback a cap doesn’t make it a cap,” Wright said in disputing local government’s description about the impact of the rollback threshold.

‘Misrepresentations’

In his oral testimony and written remarks, Wright said the bill is being subjected “to gross misrepresentations being employed by local government officials and their lobbying organizations to drum up opposition to the bill.”

The Texas Municipal League, which represents more than 1,100 cities, has emerged as one of the leading opposition groups, calling the bill “a direct assault on public safety, economic development, and transportation.”

Wright, saying he was speaking for himself and not the state’s assessor-collector organization, said that many local governments have steadily increased property taxes, “often by leaving tax rates the same for years on end while property values rose, producing a windfall of new tax revenue that only rarely was shared with taxpayers.

“Worse, they refused to be accountable for the increases, claiming that taxes rose because property values rose,” he said. The notion “that property value drives taxes and taxes will always rise if values rise is and has always been a myth,” he said.

Price told committee members that the tax burden facing Texas owners largely stems from property taxes that support public schools and not those that are used for cities and counties. Local property taxes used for public schools have increased 44 percent from 2008 to 2017, she said

By contrast, she said, Fort Worth cut its tax rate last year and plans for another reduction this year. “Tax dollars must be spent wisely and stretched as far as possible,” she said.

Handcuffing cities?

In their letter to Nelson, Price and other mayors in Senate District 12, which includes most of Denton and part of Tarrant County, said SB2 hurts municipal bond ratings, forces cuts in basic services and “handcuffs our ability” to deal with skyrocketing costs of health care, pensions and public safety.”

Tarrant County Judge Glen Whitley and Dallas Mayor Mike Rawlings also signed the letter. Other officials registering opposition included the mayors of Coppell, Denton, Trophy Club, Azle, Southlake, Plano, Justin, Samson Park and White Settlement.

Representatives from a number of law enforcement groups were also on hand to testify. Sgt. Richard Van Houten, president of the Fort Worth Police Officers Association, said the measure would undercut efforts to bolster police department manpower.

“We understand the impact this will have on our staffing needs,” he said in an interview.

Bettencourt denied that the bill imposes revenue caps and said that while the it may not reduce taxes it would at least slow their growth. He also recited the findings of the 90-page report from the interim hearings, including one in Arlington, to underscore the urgency of enacting the bill.

Average home property tax appraisals have risen 22-24 percent over the past two years in the Fort Worth and Dallas area and have gone up 20 percent in San Antonio during the same period, the committee reported. In Harris County, the average residential tax bill has shot up 36 percent in three years.

More than 2,100 people attended the hearings, Bettencourt said, including some who expressed desperation over their mounting tax bills. A senior citizen in Arlington said she is spending 10 per cent of her income on property taxes but only received 29 cents in her last pay increase.

Under the current property tax system, said Bettencourt, property taxes regularly go up by 8-9 percent on homeowners and 15 percent on businesses. “And it happens year after year after year,” he said.

This report includes material from the Star-Telegram archives.

This story was originally published March 14, 2017 at 7:18 PM with the headline "Local leaders decry proposed property tax overhaul."