Gov. Greg Abbott signs property tax reform bill into law, capping tax revenues
City staff will not recommend a homestead exemption as the July 1 deadline to initiate the process approaches.
Mansfield City Manager Clayton Chandler said staff took a “hard look” at offering a $5,000 homestead exemption, something the city has never offered before.
Chandler said there’s too much uncertainty regarding property taxes, sales tax and franchise fees coming out of the 2019 Texas legislative session. Experts are still analyzing the bills that passed the legislature, including the property tax reform bill Senate Bill 2.
Already, the city’s tax estimated rolls plummeted $316 million from April until June 10, a $2.2 million impact to the city’s budget. And there’s still $1.9 billion worth of Mansfield property going through the protest process to get the assessment lowered, Chandler said.
“We’ve been trying to evaluate all of this,” Chandler said at a work session earlier this month. “There is no way for me or the management team to give you that information at this point in time. We also cannot recommend that you move forward with a homestead exemption at this time.”
It’s also too early to say whether staff will recommend changing the property tax rate — currently set at 71 cents per $100 of assessed property value. Mansfield has been able to maintain that tax rate since 2007 because property values have risen steadily.
But that also means Mansfield homeowners are getting squeezed with higher property assessments and higher tax bills. At the same time, new neighborhoods and apartment complexes have been built, putting a bigger strain on city services and infrastructure.
“We’re going to have more people, we’re going to have more traffic so we’re going to have to build roads,” Chandler said. “We’re going to have to build and replace water and sewer lines.”
The city needs two new fire stations and a police station in addition to the equipment, vehicles and staffing associated with that. The city needs four police officers and six firefighters. Also, the city’s existing facilities need an estimated $900,000 in maintenance work.
Lawmakers in Austin responded to the complaints about soaring property values and put a 3.5 percent cap on how much city property tax revenue a city can collect in a year. If the city wants more than that, the city will need voter approval through a property tax election.
Councilman Terry Moore said he believes the cap imposed by lawmakers will move cities more toward bond elections.
“It gives citizens the right to vote on the future direction of the city,” Moore said in an interview. “I think we should go to the voters on capital improvement projects like that.”
Councilwoman Julie Short said the bond package would have to be relevant for all voters.
“There is so much to take into consideration. Most people might go into that vote thinking, well, does this matter to me or not? Just to me. Without thinking about the whole impact,” Short said.
Moore has experience with bond packages from his time on the Mansfield ISD school board and said the city should put the two fire stations, police station and roads into a bond package. The road projects should come from all quadrants of the city so everyone feels like they are a part of it.
“This community wants quality,” Moore said. “This community wants to be better than others. I think they’re willing to vote for those things. I sincerely hope that that’s the direction we continue to go.”
Councilman Casey Lewis said during the budget meeting that he would favor a homestead exemption to give tax relief to the homeowners who are already here.
He wants an analysis that looks at new construction versus existing homes that are also rising in value to really understand how it affects people.