Local government officials including Fort Worth Mayor Betsy Price were in Austin on Tuesday to argue against Senate Bill 2, a measure that Sen. Paul Bettencourt, R-Houston, wants to use to radically shake up the local property-tax system.
Finance Committee chairwoman Sen. Jane Nelson even noted, “This is a tough crowd.”
Tough opposition is exactly what SB2 deserves. Bettencourt’s bill would sharply limit local officials’ ability to fund the government services they deem necessary back home.
Today, a city council can increase by as much as 8 percent the amount of tax revenue it raises from property that was on the books the previous year. New construction does not count toward that limit, nor do taxes necessary to pay off debt.
If the council exceeds that 8 percent revenue growth through any combination of tax rate and higher property value, local residents can petition for a “rollback” election to lower the rate.
City rollback elections don’t happen often, partly because officials try to stay below the 8 percent limit.
SB2 would lower the limit to 4 percent and make the rollback election automatic — no petition drive necessary — when it’s exceeded.
Local officials call that a revenue cap. Bettencourt disagrees, saying he’s just giving power to voters.
The delay and uncertainty of an election would make 4 percent a hard revenue cap. That’s not enough flexibility in running a complex city.