On March 21 the Texas Senate approved a property tax “relief” bill that effectively penalizes lower value homesteaded properties to the benefit of the higher valued properties. Senate Bill 2, proposed by Senator Paul Bettencourt, would presumably reduce the rate of increase in property taxes by changing the rollback rate from 8 percent to 5 percent. That means if a city or county’s total tax collections increase more than 5 percent it would automatically trigger a vote in November to lower the tax rate. Voters now can trigger that vote only through a petition for an election which is a higher burden and the election would not be timed in November when most people vote.
It sounds at first blush like power to the voters but in practice it will be power to the higher value properties because they are the ones that experience the largest year to year value increases in both absolute and percentage terms. Their owners have the most at stake and they are more politically involved than owners of lower valued properties. The likely result will be that taxing authorities – the cities and the counties – will be reluctant to allow their collections to rise with the increase in property values and the demand for services. As Texas continues to attract people moving here from other states municipal and county services may be unable to keep pace.
This bill does not affect school property taxes which bring in 53 percent of total property taxes statewide so it doesn’t address the major cause of higher property taxes.
For information about tax rates, see: