There’s little disagreement in the state Capitol that property taxes are too high, but stark divisions over what to do about it boiled over in the closing days of the special session, which ended late Tuesday with no immediate relief for taxpayers.
Lt. Gov. Dan Patrick, who presides over the Senate, came closer than ever to his longtime goal of automatic elections to approve property tax increases above a certain percentage, only to walk away on the session’s final day, saying a House proposal fell far short of true reform.
The key difference: Senate Republicans wanted a 4 percent trigger for elections, while the House went with 6 percent. All was set for negotiations over the final version of Senate Bill 1 — until the House abruptly adjourned Tuesday evening, basically telling the Senate to take 6 percent or leave it.
Patrick and Sen. Paul Bettencourt, R-Houston, chose to leave it.
“We are not going to accept the take-it-or-leave it proposal from the House, and we are going to fight another day,” Bettencourt, the author of SB 1, told the Senate late Tuesday. “Today’s action by the Texas House leaves us with a bill, to quote the House Ways and Means chairman, that provides no property tax relief whatsoever.”
That committee chairman, Rep. Dennis Bonnen, R-Angleton, publicly disagreed with Bettencourt’s claim that the automatic rollback elections would provide meaningful tax relief.
“It does not provide one ounce of property tax relief. It’s not intended to. Anybody who suggests that is giving you bad information,” Bonnen said Saturday as the House debated SB 1.
For Bonnen, SB 1 was about giving taxpayers more control, though it did have the potential to provide modest tax reductions, he said.
SB 1 applied only to about 35 cities and 50 counties with tax revenue above $25 million. Patrick and Bettencourt also criticized the House for removing a Senate provision that would have allowed voters in smaller cities to opt in for automatic rollback elections.
In 2016, 20 cities with tax revenue above $25 million raised property taxes above 6 percent. If voters had opted to roll back the rate to 6 percent, the average homeowner in those cities would have saved $21 that year, Bonnen said, quoting figures from the comptroller’s office.
Imposing a 4 percent trigger would have added six more cities with minimal impact, Bonnen said.
“For the difference between 4 and 6 (percent), you’re adding about $10. We can do this at 6, or we can get silly and we can get arbitrary about wanting to go a little further and get nothing,” Bonnen said Saturday, successfully fighting off an amendment to adopt the 4 percent trigger.
The debate over SB 1 fulfilled a secondary purpose — providing fodder for the 2018 Republican primary elections.
“If the House feels proud of going back home and saying I passed tax relief, I say to their voters, don’t believe them,” Patrick told reporters late Tuesday. “Those who voted against 4 percent — 44 Republicans — they’re going to have to explain that to their voters back home.”
Democrats argued the state needs to pay more of its share of public school finance, noting that local education costs make up the bulk of property taxes — a sentiment echoed by Austin Mayor Steve Adler.
“Texas lost in the special session because our property taxes will continue to rise until the Legislature fixes the broken school finance system. And once again this session, they didn’t even try,” he said Wednesday.
But Republicans said local property taxes must be addressed because they have risen about twice as fast as school district taxes. “The rate of growth of local taxes is unsustainable,” said Sen. Van Taylor, R-Plano.
A lot of attention will focus on a new state commission, created during the special session, that will study the school finance system and make recommendations that are expected to affect property taxes.
Interim fixes, adopted by the Legislature over decades, are no longer feasible, said Sen. Jane Nelson, R-Flower Mound.
“What we have right now is a huge stack of Band-Aids that we have got to rip off and start over. It’s going to be very, very painful,” Nelson said.