3/21/2011 5:41 PM
Today the Senate Finance Committee heard two bills that would lower appraisal caps and another that would lower revenue caps. Suffice to say government-funded lobby groups are big fans of neither cap, and have claimed for years that both such caps would severely restrict the ability of local governments to provide services to their local citizenry. (Many fiscal conservatives believe the only thing it would make it more difficult for local governments to do is raise taxes on their local constituencies.)
An appraisal cap is basically a limit on how much the appraised value of a property can be raised by an appraisal board for taxing purposes in a given year. A revenue cap is a limit on how much revenue can be amassed by a local government without opening the door for a local election.
Lobbyists representing local governments, as well as local government employees, and elected officials, came before the committee to oppose the bills, arguing (in not so many words) that if the any one of them were to pass, the sky would proverbially fall.
The two bills that would lower the appraisal cap for local governments are SB 129 from Dan Patrick (R-Houston) and SB 175 from Robert Nichols (R-Jacksonville). Both bills would lower the state’s current 10 percent appraisal cap to 5 percent. Patrick's constitutional amendment would be SJR 7, and Nichols' would be SJR 11. SB 720 from Tommy Williams (R-The Woodlands) lowers the rollback threshold before the voters can request an election from the current 8 percent to 5 percent.
Patrick said the current 10 percent appraisal cap allows property values to double every seven years, meaning as the economy recovers some people may get taxed out of their homes. Patrick surmised that if his proposed constitutional amendment to enable the lowering went to the voters, it would be approved with 80 to 90 percent of the vote.
On Williams’ bill, city and other local officials warned that their cities are currently growing and rely on ability to increase local revenue to be able to handle their growth. Horatio Porter, a budget officer for Fort Worth, warned that lowering the rollback rate from 8 to 5 would prevent Fort Worth’s government from being able to be responsible for its citizens, considering its recent rapid growth.
Williams said he was “stunned” by that and similar testimony from other local government officials. He said that none of the new property is factored into the rollback rate in his bill. In other words, population growth is carved out. He said that Porter was really just talking about “raising taxes on existing residents.” He said that the bill does not prevent local officials from providing services to their residents.
But the local officials and government-funded lobbyists continued the time-honored meme of how Williams’, Patrick’s, and Nichols’ bills would offend “local control” – i.e., in this context, ability of local governments to raise taxes without consulting the electorate.
Williams highlighted that there are several exemptions in his bill that local officials could use to get around the new cap. A local governing body can still set the rollback rate at 8 percent if by public vote they pass a resolution saying that the higher cap is necessary “to protect the health, safety, or property of persons residing in the taxing unit.”
Lobbyists and officials complained that such a public vote would be “difficult” for elected officials to take. But one elected official, Galveston County Tax Assessor Collector Cheryl Johnson, expressed strong support for all three bills, and said that their opponents were simply “whining.”
This is just the tip of the iceberg. For more, check out the next issue of The Lone Star Report.