A bill that aims to slow the escalating property taxes in the state of Texas has passed another hurdle in the 86th Texas Legislature.
Senate Bill 2, which is authored by District 7 State Senator Paul Bettencourt, would require an election if local taxing entities wanted to increase its revenue by more than the rollback revenue.
According to the bill, it would lower the rollback rate from eight percent to 3.5 percent for government entities and 2.5% for school entities that would collect more than $15 million in combined sales and property tax revenue.
It would also automatically trigger a rollback election as opposed to having residents petition for one.
“Both bills, as proposed, will limit the unsustainable growth of property taxes on homeowners and increase the individual citizen's ability to control that growth in the future,” District 22 State Senator Brian Birdwell stated in a previous Daily Light report.
Exemptions include indigent defense costs that impact all counties. According to a Texas Senate media release, SB 2 allows for a tax increase only if indigent defense expenditures exceed the amount of those expenditures for the preceding year.
Another provision in the bill is the implementation of a real-time tax database that taxpayers can electronically access during budget periods. Under the proposed arrangement, property owners could look up their properties online and view how the proposed rates would impact them.
The bill also changes some of the terminologies of current tax law, including changing the “effective” rate to the “no-new revenue” rate and the “rollback” rate to the “voter-approved” rate.
The bill was passed by the Texas Senate 18-13 on April 15. Birdwell stated that he believes the bill will help mitigate the growth in property tax bills – which, he says, is unsustainable in its current form.
“Over the past 18 months, I have been listening to my constituents and elected officials with whom I share those same constituents,” Birdwell remarked. “The citizens of Senate District 22 and Texas have demanded property tax reform and I believe Senate Bill 2 as passed today will have a significant effect on curtailing the rapid growth in property valuations.”
While voters could have more of a say in how local entities adjust their tax rates, many public officials are concerned how the bill could impact finance and growth for the cities and school districts within Ellis County.
Ellis County judge Todd Little said in a previous Daily Light report that salaries and services were among the county’s largest expenses. If their resources were restricted, those items would be among the first to get cut - including maintenance, road and bridge repair and some part-time positions.
He did observe, however, that the county’s direct rate has not increased or decreased over 2.5 percent over the past 10 years. According to county records, the last time the tax rate was increased was in 2011, when the rate was increased by two cents from $0.3936 to $0.4136.
The rate was maintained for six years until 2018 when the commissioners’ court voted to reduce the tax rate to $0.3932.
However, just because they haven’t had to increase the rate in the past 10 years doesn’t mean they won’t have to in the near future. And if they’re capped when things are good, he questions if they will be capped if things are bad.
“If our county commissioners’ court raises taxes, and the citizens did not agree, then it’s up to the local people to vote them out of office,” County Treasurer Cheryl Chambers previously expressed. “You have a voice to keep that from happening, and you’ve got a voice at the polls.”
SB 2 now heads to the House for consideration before it lands on the governor’s desk.