HARLINGEN, Texas — Winter Texans don’t think it’s fair to slap property tax bills on RVs the northern retirees drive to the sunny Rio Grande Valley every year, and the latest effort to appease them is pending in the Texas Legislature.
Lawmakers have twice passed bills that would exempt travel trailers from property taxes, and voters twice approved constitutional amendments toward that end. But Cameron and Hidalgo counties, with the state’s highest concentration of winter residents, found loopholes to keep the money coming.
Now Brownsville Sen. Eddie Lucio supports legislation that could cost two counties he represents hundreds of thousands of dollars in tax revenue. But he’s doing it to keep Winter Texans from flocking elsewhere.
“I had people tell me they were going to take out ads in magazines at home telling others not to come to Cameron and Hidalgo counties,” said Kathy Oliver, editor of the Winter Texan Times. “There’s talk of boycotting large stores. They feel the tax is very wrong.”
Supporters of the exemption say the RVs shouldn’t be subject to property taxes because they aren’t real property and aren’t permanently affixed to their lots. They say trailer park owners already pay property taxes and trailer owners pay sales tax on their vehicle, amounting to triple taxation. They also believe Winter Texans shouldn’t be taxed the same way residents are because they can’t vote there.
Gene Phagan of Greeley, Colo., acknowledges that the $145 tax on his 1984 trailer might not seem steep, but “that’s not the big issue,” he said. “It’s not right.
" … We feel we're being singled out and it's an illegal tax," Phagan said.
In 2001, voters approved and Gov. Rick Perry signed a constitutional amendment that inadvertently codified, instead of prevented, the property tax.
The law labeled trailers as taxable, whereas before the law said nothing about them. Among the consequences was RV owners suddenly getting school tax bills.
The law was revised and re-passed in 2003, but taxing districts in Hidalgo and Cameron counties still found ways to interpret the law in their favor.
Lucio, a Democrat, said the 2007 bill gets things right by clearly defining the term "structure" in state tax code.
"The bill ensures that park model travel trailers are not subjected to ad valorem taxes and also provides a narrow definition of park model travel trailers that conforms with nationally recognized standards," he said.
Winter Texans are considered an important part of the Rio Grande Valley economy.
A study by the University of Texas-Pan American found that about 150,000 retirees each year pump more than $400 million into the economy with shopping, dining out, and other spending.
The visitors have an average annual income a $45,000 and consider Texas an affordable pick over Florida or Arizona. Eighty percent of them live in RVs.
But a cut in tax revenue could hurt the counties.
Hidalgo County Judge J.D. Salinas said the loss would be between $193,000 and $237,000 for the county, not counting the impact on school districts and small cities within the county. He said he was hoping to meet with the RV groups for a phase-out approach that wouldn't hit so hard.
"It affects the county of Hidalgo in such a short notice," he said. "It's a quarter-million dollars. The services and demands keep increasing. We just need to properly plan our growth."
Cameron County Judge Carlos Cascos said he wasn't sure how much revenue the county would lose.
"Any time you have a revenue decrease, it's going to impact the budget," he said. "We'll have to make it up somewhere."