Texas Senate approves bill that would limit local property tax growth


The Texas Senate on Tuesday voted 18-12 to approve a bill that would trigger an automatic referendum if a city or county raises property taxes by 5 percent or more.

Currently, a tax ratification election only takes place if local governments raise taxes 8 percent or more and if taxpayers petition to force the referendum.

State Sen. Paul Bettencourt, R-Houston, who authored Senate Bill 2, drummed up support for the measure leading up to the legislative session by holding a series of public hearings to air property taxpayers’ complaints, from big businesses to low-income families.

“When you have both taxpayers in the neediest portion of society as well as the largest taxpayers of the state having problems with tax relief, we need action,” Bettencourt said on the Senate floor Tuesday. “Given the magnitude of property tax increases, we need real reform now.”

The bill is necessary, he has argued, because local property tax burdens have risen faster than Texans’ incomes.

Bettencourt, however, used fuzzy math to back up his claim by comparing a statewide measure of taxes to an individual-level measure of income, making it appear that tax burdens have far outstripped incomes in recent years. In reality, they have risen at roughly the same rate.

Many city and county officials fiercely oppose Bettencourt’s bill, saying that it would tie the hands of the elected representatives who know their communities best and that property tax increases are often the result of “unfunded mandates” from the state, like demands on courts and prosecutor’s offices adopted by state lawmakers.

If adopted, the bill’s impact on property owners will be limited because its main provisions do not affect school districts, which account for a majority of property tax levies in Texas.

In Texas, where there is no state income tax, the state government relies primarily on the 6.25 percent sales tax, while counties and school districts run almost entirely on property taxes. Cities use a blend of sales and property tax revenue.

Bettencourt initially proposed a 4 percent property tax increase as the “rollback rate” for the automatic tax referenda but raised it 5 percent when the bill was being considered by the Finance Committee, which approved it in a 9-5 party-line vote.

State Rep. Dennis Bonnen, an Angleton Republican who chairs the tax-writing Ways and Means Committee, has filed a similar bill in the House.



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