Last year, Gov. Greg Abbott unveiled a truly absurd property tax plan. It would reduce the maximum property tax revenue growth rate from 8% to 2.5%. In addition, local governments would need to win approval from two-thirds of voters if they seek to exceed the maximum rate (the rollback rate) in a year.
Most folks I talked to about this did not take Abbott’s proposal seriously. There were far too many little Republican cities that would be royally screwed by such a draconian limit, explained one lobbyist who works at both the city/state level. The outcry would be deafening. Nevertheless, the fact that Dennis Bonnen guy who is now speaker, was at Abbott’s side at the press conference where he unveiled the plan, was troubling.
So far, the only bill that has been filed on the issue does not go nearly as far as Abbott proposed. Audrey McGlinchy reports: “State Rep. Dennis Paul (R-Houston) filed a bill limiting municipalities to a 4 percent maximum increase in property tax revenue year over year.”
Just as important, Paul’s bill does not require two-thirds support from voters to go above the rollback rate. Rollback elections are exceedingly rare. I’ve never heard of one taking place in Austin. However, if the rate is cut in half, they may become more common. It will still be a heavy lift to get people to approve tax rate increases, even in Austin, but under the right circumstances it is possible.
But while 4% is better than 2.5%, it’s still pretty bad for cities. Two years ago, when Republicans had an even bigger majority, the bill that made it out of the House proposed 6%. It was only Dan Patrick’s wackadoos in the Senate who proposed 4%. Happily, both bills died due to squabbling between the two chambers.