Proposal limiting Texas city, county property taxes dies in the Legislature

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DALLAS — A push by Texas lawmakers to curb city and county property tax bills died quietly Thursday morning after legislators clocked out of a 30-day legislative sprint without reaching a deal.

Gov. Greg Abbott called on state lawmakers during a 30-day special legislative session to further cut property taxes by limiting spending by local governments, which tax-cut hawks have griped have bitten into their efforts on cutting school district taxes. Texas lawmakers have already this year greenlit a new round of breaks for homeowners and business owners on the property taxes they pay to school districts, typically the largest portion of a tax bill.

The central proposal would have tightened limits on how much more in property tax revenue cities and counties can collect each year without asking voters — with the goal of curbing homeowners’ tax bills. But House and Senate lawmakers deadlocked on how to move forward with the bill. House lawmakers on Tuesday shot down the latest version of the bill hashed out in negotiations between the two chambers, arguing it didn’t go far enough to rein in local spending.

“This is not the solution to our problems,” said state Rep. Mitch Little, a Lewisville Republican. “This is not the answer to our prayers.”

Their counterparts in the Senate haven’t appeared to budge, raising the prospect that lawmakers could leave Austin without passing more tax-cut legislation. Despite negotiations between the chambers, lawmakers left Austin without hammering out a compromise.

The legislation, Senate Bill 10 by state Sen. Paul Bettencourt, a Houston Republican, would have further restricted how much more in property tax revenue cities and counties can raise each year without voter approval. Lawmakers set that limit at 3.5% in 2019, a limit proponents credit with blunting the rise of city and county property tax bills.

The initial Senate proposal would have further limited that growth to 2.5%. But the limit only would have applied to cities and counties with at least 75,000 residents, while the current state limit would continue to apply to places with fewer residents than that. Proponents of the bill had argued it wouldn’t make sense to apply the limit to smaller jurisdictions because the cost of putting on an election to approve a higher tax rate might eat up any additional revenue raised by that higher tax rate.

That didn’t sit well with House lawmakers, particularly a contingent of hard-right Republicans. Under the Senate version, the tighter cap would only have applied in about 20% of the state’s 254 counties and 4% of the state’s 1,224 cities and towns, according to a Tribune analysis of U.S. Census Bureau population data.

Last week, the House stripped that geographical limit from so the bill would apply in all parts of the state, no matter how big or small. They also took the limit down to 1% and exempted localities’ public safety spending, a major cost driver of city and county budgets, from the cap.

Those changes by the House, in turn, got stripped from the bill in negotiations between House and Senate lawmakers — angering many House Republicans, who joined with Democrats in that chamber to vote down the bill Tuesday. Several Republicans railed against the bill, arguing it delivered only paltry relief to taxpayers and only those in the state’s biggest urban areas.

Some Republicans defended the bill.

“We know that this bill, of course, is not the silver bullet, but it is a step in the right direction, giving voters further control of their own tax rate at the local level,” said state Rep. Ellen Troxclair, a Lakeway Republican.

State Rep. Steve Toth, a Conroe Republican, said he’s heard that before.

“Bull. Bull crap,” he said. “It's not even a start.”

State Rep. Vince Perez, an El Paso Democrat, sought to pour salt in the wound, pointing out that it doesn’t apply to many Republican-dominant parts of the state.

“It is the Democratic cities that will see the largest benefit in this bill, not the Republican ones,” Perez said.

The bill went down by a 60-71 vote. Later Tuesday, a contingent of House Republicans — including Toth, state Reps. Tony Tinderholt, R-Arlington, and Nate Schatzline, R-Fort Worth — could be seen speaking with Bettencourt on the Senate floor.

Bettencourt blasted the House vote in a statement late Tuesday as “unanticipated and disappointing” and accused House lawmakers of “stopping property tax relief for (tens of millions) of Texas taxpayers.”

He said the Senate couldn't accept the House version, in part because it would have amounted to an “unlimited property tax revenue increase on public safety expenditures.”

Abbott has not said whether he will call lawmakers back to Austin to take up property tax cuts. It’s possible Republican officials may have to settle for $51 billion the state committed to spend over the next two years to maintain existing cuts to school property taxes and enact new ones.

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