Property taxes trigger ‘growing social crises in Texas’

Property taxes trigger ‘growing social crises in Texas’

Published on on August 4, 2016.

By Kenric Ward

A Texas lawmaker is calling local politicians to account for their persistent assertions that steady tax rates mean flat property tax bills.

“That’s simply not true,” said state Sen. Paul Bettencourt, R-Houston.

“Appraised values in many major Texas cities like Dallas, Houston, Austin and Fort Worth are up 12 percent. Without some sort of property tax rate reductions, government revenues will rise by 12 percent and so will tax bills,” said Bettencourt, chairman of the Senate Select Committee on Property Tax Reform and Relief.

“In 36 hours of public testimony, we heard one issue loud and clear: Property tax bills are taxing property owners out of their homes and businesses,” he said, noting that property tax bills are growing three times faster than Texans’ median income.

When total property taxes increase by 12 percent a year over three years, city and county tax revenues increase almost 40 percent.

“Data continue to show that all over the state, property tax revenue growth continues to increase at an untenable pace,” said Bettencourt, a former tax assessor-collector.

In a series of articles, has reported that aggressive increases in property values are triggering record protests and even lawsuits against county appraisal districts throughout Texas.

The problem has been building for years. In 2010, a report by the Texas Conservative Coalition Research Institute declared, “Property taxes are at the root of a growing social crisis in Texas.”

The study group was co-chaired by Dan Patrick, now Texas’ lieutenant governor.

TCCRI found that Texas ranked an anemic 43rd in the nation in home ownership. Another report showed Texas with the sixth highest property tax burden in the country.

Bettencourt says the state’s future growth and prosperity hinge on lower property tax bills.

“Lowering property taxes and cutting the size of government is a pro-economic growth tax plan that would stop hard-earned taxpayer monies from being sent into government coffers around the state,” the senator said.

The TCCRI study, which also examined the Texas’ school finance system that relies heavily on property taxes, called the property appraisal and taxation process “antiquated.”

“Property taxes are the remnant of an antiquated system of taxation that was necessitated because wealth was tied directly to the land: farming and ranching, primarily,” the report observed. “As Texas has urbanized and the economy has shifted … the system of taxation has become outdated and inefficient.”

Efforts at reform – including a modest bump in the homestead exemption this year – have left the fundamentally flawed system intact.

“Property tax relief financed by the Legislature is undermined by appraisal increases as well as increases in local debt,” the report concluded.

Municipal and school officials contend that a lack of state funding necessitates higher property taxes and some of the highest local bond debt in the country.

Former U.S. Sen. Phil Gramm, R-Texas, riposted recently: “Our cities are turning Texas into California.”

The political shell game is fueling calls to replace Texas’ property tax regime with an expanded sales tax that would broaden and stabilize the tax base.

Bettencourt expects to introduce reform and relief measures when the Legislature convenes in 2017.

Michael Berlanga, a real-estate broker running for Bexar County Tax Assessor-Collector, said, “The property tax culture of Texas is predatory over three generations — the young who innocently pay the taxes of their landlords, the middle-aged who don’t control what they pay through their lenders, and the elderly who pay school taxes for facilities they don’t use and children who are not theirs.”

“The American Dream is slowly becoming a Texas nightmare,” the Republican CPA said.