Gov. Greg Abbott signs property tax reform bill into law, capping tax revenues
Gov. Greg Abbott signed a property tax plan into law Wednesday aimed at giving Texas property owners some long sought-after aid.
Senate Bill 2, known as the Texas Property Tax Reform and Transparency Act of 2019, slows property tax increases through a revenue cap on cities and counties while adding a layer of transparency.
“This is substantial property tax relief for the people of Texas, for homeowners, for businesses, that will ensure that the way that the state of Texas buys down your property taxes, you will have lasting, meaningful, tangible results for you and your business, for a long time to come,” Abbott said at a ceremonial bill signing in front of Wally’s Burger Express in Austin.
Robert Mayfield, the owner of Wally’s Burger Express, said that in the past year, his own property taxes increased by 44%, or about $8,000. And since 2016, he’s seen them rise by 80%. Without this legislation, Mayfield said he wasn’t sure how long he would be able to keep his family-owned restaurant open.
“It’s like you have rocks in a boat. After a while it starts to sink,” Mayfield said.
Mayfield’s restaurant isn’t the only Texas property being slammed by rising taxes.
Some North Texas residents have been driven from their homes and forced to downsize because of the costs of property taxes and skyrocketing appraisals.
“I think every businesswoman and businessman in Texas has a right to build a business on a property and not have to worry about their property because someone else could come in here and make more out of this property to raise more taxes,” Lt. Gov. Dan Patrick said.
The bill, one of state leaders’ top priorities this session, imposes a 3.5% cap on property tax revenues for cities and counties. Any more, and taxing units will have to receive voter approval. Previously, taxing entities were restricted to an 8% increase in property tax revenue from the previous year, and voters had to petition for an election to roll back the rate.
“It’s the smartest policy because the people that know best what government should be charging them for are the people that are required to pay it,” Sen. Charles Perry, R-Lubbock, said.
But local government officials and the bill’s opponents say that a cap will stunt revenue for municipalities and take away local control.
A few of Tarrant County’s Democratic members voted against the plan, including state Reps. Nicole Collier, of Fort Worth, Chris Turner, of Grand Prairie, and Sen. Beverly Powell, of Fort Worth.
“I voted against the bill because it will put an arbitrary cap on services, including public safety, that cities and counties can provide,” said Turner, who chairs the House Democratic Caucus, in a statement. “Local decisions are best made by local officials. The state’s one-size-fits-all approach is going to limit local government’s ability to do what is best for their community.”
House Speaker Dennis Bonnen said the need for cities to make up for lost revenue through other fees in response to the legislation is a “false narrative.” State leaders warned that lawmakers will combat any attempts in the next legislative session.
“If the cities and counties want to go around us, hey we’re coming back in 2021,” Patrick said. “We’ll shut those doors. We’re going to shut every door, every window that we can to protect the taxpayers.”
The bill also establishes the creation of an online database that informs residents of upcoming hearings to change the tax rate and how proposed changes would affect their bills.
While the legislation itself does not reduce tax bills, lawmakers said it will work in tandem with House Bill 3, the sweeping school finance bill, which Abbott signed into law Tuesday.
House Bill 3 allocates about $5.1 billion to cut school district taxes. Lawmakers estimate the bill will lower school property tax rates by an average of 8 cents per $100 valuation in 2020 and 13 cents in 2021. For the owner of a home valued at $200,000 in the Fort Worth school district, the savings would be $140 in 2020 and $227.50 in 2021.
For Mayfield, the owner of Wally’s Burger Express, the legislation means he has a better of chance of passing the restaurant onto his grandchildren, who attended the bill signing ceremony.
Lawmakers celebrated the signing of yet another of their key priorities this session, with Patrick declaring milkshakes and burgers were on him while posing for a photo.
“I’m buying,” Patrick said.