The Senate Passed a Property Tax Reform!

Kudos to senators Brandon Creighton and Paul Bettencourt, who managed to achieve something yesterday that I had concluded was a pretty well lost cause: they passed a property tax reform bill out of the Senate.

The bill, SB 1760, was authored by Creighton and would promote greater public awareness of how high Texas’s average property taxes are, and why, by requiring the comptroller to publish side-by-side rankings, mandating some explanation of proposed increases on ballots, and so on. Insofar as the measure calls for more transparency rather than more discipline, it eluded the opposition of local governments and snuck out of the Intergovernmental Relations committee last week. Once on the floor, it received an amendment by Bettencourt addressing what’s called the “effective tax rate”—it would require 60 percent of the members of any local government entity to approve property tax rates that would yield more total revenue than the jurisdiction raised via property taxes the year before.

Bettencourt’s amendment seems like an effort to approximate the effects of his own property tax reform bill, SB 182, which would have tightened current state rules about the “rollback rate,” a metric similar to the effective tax rate. As it stands, if a local government wants to set property tax rates at a level that would result in 8 percent total revenue growth, residents have the right to request a chance to vote on the tax rates themselves; Bettencourt’s bill would have cut the rate to 4 percent, and made the election mandatory. That bill, as I noted with exasperation earlier this week, is apparently dying of neglect in Senate Finance, having met with organized opposition from local governments, which would have been directly affected. We can’t say for sure what the effects would have been, but it’s a pretty safe bet that given the chance to vote against current property tax rates, many Texans would have done so. Yesterday’s amendment is different in two key respects. First, it caught everyone by surprise. Second, it isn’t as tough as Bettencourt’s original bill: it only requires local government officials to cast an unpleasant vote. And so, as Aman Batheja and Eva Hershaw note in their write-up of events, the bill, as amended elicited some grousing from the locals, but less than it might have and less than all the other property tax reform proposals of the session.

Overall, this is a step in the right direction; it’s the most meaningful property tax reform effort to emerge from either chamber thus far. Those of us who aren’t lobbying for local governments would prefer a more robust reform—Texas’s average property tax burdens are among the highest in the country, and the bill is more likely to illuminate that problem than to address it. But as Dan Patrick noted, in celebrating the passage of Creighton’s bill, that’s a worthwhile goal: “SB 1760 delivers true tax relief for Texas homeowners by placing a downward pressure on the oppressive growth of property taxes through transparency.” I agree with the lieutenant governor; one of the reasons I’m so appalled by the “property tax relief” included in the Senate’s budget is that it would only mitigate such pressure. By contrast Creighton’s bill, as amended by Bettencourt, is a real reform, and a step toward real relief.