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The Senate Committee on Property Tax met to organize, adopt rules and consider SB 2 (Bettencourt) – relating to ad valorem taxation.

This report is intended to give you an overview and highlight of the discussions on the various topics the committee took up. It is not a verbatim transcript of the hearing but is based upon what was audible or understandable to the observer and the desire to get details out as quickly as possible with few errors or omissions.

 

Bettencourt Opening Remarks

  • Reason we are here is because property taxes are growing too fast
  • Provides personal detail on growth value of his home
  • Have a duty to help those who have yet to buy a home or start a business
  • Unprecedented to file 2 identical bills in the House and Senate on a tax issue – speaks to cooperation and leadership, more importantly the determination to solve
  • As values go up, tax rates need to come down
  • When you testify today, know we have the numbers and call pull up taxing jurisdictions record
  • Going to get this solved, no plans this summer and will be here until we do, but plan to solve this session
  • Hancock – remarks from 1981, when they adopted the 5% seemed like something they could live with but asked them to move from 5% to 8% – this move was done in light of inflation; notes this issue is long past due
  • Members continue to issue opening remarks and staff
  • Committee rules were adopted
  • Wil usually meet on Tuesday afternoons

 

SB 2 (Bettencourt) – Relating to ad valorem taxation.

  • Bill laid out
  • Based on SB 1 and HB 15 from regular session in 2017, major changes is that they have added a school finance component
  • Fiscal note on bill does reduce tax revenue for school districts and will increase cost to the state
  • Working in combination with House and also with Senate Education Committee, invited Taylor to join them
  • Elements of the bill – are looking at rollback at 2.5%, some best practices in the bill (refers to tax portal in Travis County), $15 million small entity exemption
  • Laid out committee substitute to the bill
    • 5 technical corrections – added language from SB 449, method of handling protest called topline, clarifying language to allow freeport exemptions, code language about tightening up idea for democracy to rule in ARB hearing – no longer need unanimous vote, just requires a majority and already moved up business personal property deadline and don’t believe they need to continue to move that up
  • Introductory slide on local tax burdens nationally – overall tax rate by state and at time Texas was 5th highest state and have now moved up in a tie for number #2
    • Effective tax rate 2.06% and avg property tax $5,935
  • Shows committee the property tax levy growth rate some by almost 54%, 79%, 83% and even over 100% but notes schools are down because of some recent changes
  • Hancock – thinks voter approved rate over rollback rate
  • Continues to show tax growth by tax jurisdictions
  • Says key slide is the rollback limit compared with inflation from 1979-2017
  • Hancock – here a lot about fast growth districts, fast growth districts are already taken care of and as they grown they are already taken care of, its not going against voter approve rate
  • Bettencourt – agrees, they also get first time home exemptions
  • Bettencourt – Provides 2 slides from the School Finance Commission illustrating all in amounts, total annual funding has increased 53% , but he say real story started with local share of 52% and went to 46% primarily due to Obama stimulus dollars
  • Bettencourt – 13-0 voted of Commission on weaning off Robin Hood
  • Taylor – thinks one other slide should have included is what happens with recapture going forward, as property tax rise then state will go down but in about 10 years if they don’t fix the finance system, recapture will exceed state share
  • Bettencourt – 13/0 vote was a strong vote
  • Taylor – notes it was an incredibly diverse group of people
  • Bettencourt – do not underestimate, we want to get something done

 

Governor’s Panel

John Harchuck and David Shoemaker with the Office of the Governor

  • Most efficient way to tackle to is to pair property tax reform with school finance
  • Taxable values are rising while rates are not declining sufficiently to offset growth
  • If nothing changes M&O state share will fund by 32% in 2023
  • As property taxes continue to rise, recapture will increase – by 2023 recapture will be at $5 billion
  • Bettencourt – lets not go too fast on last slide, at a $2 billion threshold and will be going to $5 billion in recapture; 800 school districts out of thousands – it will be an everywhere problem
  • Hancock – have of revenue of some school districts are going to state, legislature should have looked at
  • Hinojosa – recapture increases every session, part of it is we decrease funding from state side
  • Hancock – Austin good example where property values sored but student enrollment dropping, but explains his way of seeing how the funding stream works
  • Hinojosa – maybe really need a cap on appraisals
  • Hancock – if we had this in place 10 years ago, state portion would have increased and we would be at 50/50
  • Taylor – on education side, its really not cap but tax rate compression so schools will not be losing money as the state will be stepping up to make up the difference
  • Taylor – only cut funding one time in 2011
  • Bettencourt – slides show recapture will exceed state contribution
  • By placing limit and making conforming changes, can cut about $2.5 billion in growth trend of recapture
  • Talks about how recapture is calculated – calls it bucket recapture offers a simplified version
    • How it works today – uses formulas which can leave districts with less money to education children
    • If you do this at the same time (tax assessment, recapture, etc) you can move toward all districts being funded toward needs of students
    • Recapture reform is a vital part of this equitation in property tax reform
  • Can merge recapture reform with outcomes reform, the district can “grow its bucket” with better teacher pay and better outcomes
  • An efficiently lined school finance and school tax system is beneficial
  • Hancock – given two options, if maintain state’s portion they will need to increase taxes on everyone at the same rate that property taxes are increasing or you compress taxes and increase state portion over time
  • Hancock – do not think charge is to tax people at rate property tax is rising, think charge is to compress the rate
  • Bettencourt – current system leaves excessive overages at some, talked about La Joya ISD that build water park and golf courses
  • Bettencourt – will have a different bill, don’t need ISDs in the venue business
  • Hinojosa – main business is to education students

 

Panel A

Cheryl Johnson, Galveston County Tax Assessor

  • Testified on, behalf and for the bill
  • Taking care of small cities and governor, 5 year disaster provision is more than adequate
  • Rate adoption is compressed but they will make it work
  • Support local control of all, mandatory November elections
  • Bill will inhibit excessive government spending
  • Only opposition is that if you don’t move forward with 2.5 this year – will be awful situation for taxpayers
  • Bettencourt – thanks her for bringing great detail

Dale Craymer, Texas Taxpayers and Research Association 

  • Tax Visibility – bill gives access to real time data, etc
  • Bill does incredible job with ARB reforms
  • School finance – would like to preserve the $1.04 threshold
  • Not at point to say 2.5% is the right rate but strongly support voter approval
  • Support tax compression, look beyond 2.5% maybe even zero
  • Would strongly encourage giving agency authority to verify tax data submitted
  • Consider using M&O levy but would not exclude non-voter approved debt such as CO debt
  • Bettencourt – verification of data is important, appreciate any specific suggestions he may have
  • Bettencourt – appreciates comments on far reaching bill
  • Hancock – concern with proliferation of Cos, are there any recommendations on addressing that issue
    • Jurisdiction issuing CO on its own and rolling that into debt service, maybe roll it into M&O
    • Bettencourt – has some language coming on a bill on this issue
  • Hinojosa – ask for written testimony

Dick Levine, Center for Public Policy Priorities

  • Against SB 2
  • Supports real time database
  • A real innovation is taking estimated numbers and but mid notice, comes from technical process and now looks at political process of budget setting
  • ARB language, refers them to House interim study which had great language
  • 5% – what is inflation measure? Can just look at consumer price index, need to look at things schools and counties must pay for
  • 5% would then be freezing spending
  • School finance is key – need to know if this is just a revenue neutral swap or is it an increase of investment and how will that be done
  • Governor’s plan gave him questions on equity and something to continue to watch
  • If state is going to put in more money, is that revenue sustainable and where is it coming from
  • Provided slides on showing volatility of sales tax where property tax is a sustainable source of revenue
  • Slide on severance tax revenue is shown, it jumps all over with high at 85% increase to low of minus 50%
  • Millennials look for schools in California but every since prop 13 (undue restrictions on raising funds) the schools have “been very disappointing.”
  • Hancock – has state not ever addressed student growth, etc
    • Don’t think state have ever looked at inflation
  • Hancock – have you ever known state not to address student growth and inflation
    • A direct inflation component not a part but as Austin value increases we use it
    • Guarantee has increased over time
    • Hancock – increase of $2 billion by using Austin Yield, would say never been stagnant especially using Austin Yield which increases budget
  • Those are the Golden Pennies, small part of total yield per penny
    • Hancock – $2 billion is not a small part
  • Bettencourt – were talking billions and billions being able to do this, no ghosting here
  • Bettencourt – it’s important to remember tax sources, may not always count on price of oil but can always count on production and will keep estimates conservative
  • Bettencourt – glad he likes real time database and statement of notice and will be working hand in hand with the education committee

Jennifer Raab, Baker Institute for Public Policy

  • Testify on SB 2, not for or against since they are a 501c3
  • Property owners participate in appraisal process but not in rate setting process
  • Tax rate determines how much ones pays, tax rate is controllable but appraise not
  • Why imbalance? – argues for including taxpayers in rate setting process

 

Panel B

Ellen Troxclair, formerly member of Austin City Council, now TPPF

  • Anecdotal stories on rising property taxes in Austin forcing businesses to shut down or people to move from homes
  • Property taxes going up at rate 5-1 compared to population, all the additional revenue is not needed to keep up with growth
  • Austin using other revenues and fees to boost city coffers but City still increasing tax rate
  • Compares proposed bill language to City of Austin budget –only sees it impacting ½ of 1% of budget due to bill implementation
  • Speaks on programs she saw as wasteful in City of Austin
  • Empowering citizens to play a stronger role in property taxes
  • Hancock – thanks for giving perspective of a locally elected official, asked for more details on May elections versus November elections
    • More voting in November elections than in May but even in November, far less are voting down ballot
    • But significantly more voters in November elections, more sent lawmakers there to vote than locals were sent to represent voters
  • Notes public safety is critical and should be one of the things funded first, would recommend putting something in bill to address Austin contract language – reducing salaries if rollback rate is set
  • Feels that language was used as a tool, request help on that language
  • Bettencourt – do have language in bill to prevent that from happening it the future
  • Would like to see the 2.5% effective this year

Marya Crigler, Chief Appraisal for Travis

  • Details on background on what lead to the portal
  • Third party provided detail on what was increases protest number, most were contesting taxes vs value
  • Created six key terms handout
  • Impact of appraisals and tax rate reviewed
  • Hancock – new growth? Basically new growth is….
    • About $5.7 billion
    • New growth is substantial
  • Creighton – wanted to echo Sen. Hancock’s thanks, anticipate concerns and question; asked about burden shift
    • Did have a taxing unit challenge from City of Austin, that commercial was being appraised at lower value than residential
    • Developed new techniques so they can get closer to market value
  • Creighton – is income approach used for businesses, want to explore more as discussions continue
    • Yes, all three and will stop by office to discuss
  • Provides a peek behind the portal, so they can upload values into effective rate worksheet and it will help them calculate based on Comptroller form, etc
  • Paxton – thanks witness for great responsiveness, asked about traffic to site
    • Truth in Taxation Portal was live in 2018
    • See continued increase
  • Bettencourt – asked for a one-year comparison
    • Will be doing that in next roll out

Brent South, Texas Association of Appraisal Districts

  • Speaking on the bill
  • In favor of visibility portion of bill
  • Bill does require a second notification to let them know site is available
  • Wants to mention compressed timeline – have some concerns for districts to certify roll that early
  • Suggests how to address
  • Bettencourt -that is a great suggestion and will see if they can do it
  • ARB to send out orders in 15 days will be a challenge, did work with tax consultant over interim and came up with language for smaller population 40 days and 45 for larger
  • Want to see uniform rendition deadline of April 15 – confusion on if 1st or 15th, would like it to stay on the 15th except for utility companies
  • Bill calls for prohibition on ARB increasing a value, concern on special valuations or denial of exemption it would be challenging for ARB to address so providing suggested language
  • They don’t set market value but they report market value
  • Removing estimate of taxes will go along way to help understand the process
  • Bettencourt – will have discussion on ARB membership coming up, ability to retain or remove
    • Would like to see greater separation
  • Been working with Tax Consultants Group on exchange of districts, provided language they think would address concerns

Debbie Cartwright, Texas Taxpayers and Research Association

  • Currently tax code only addresses residency requirement, not qualifications
  • Part she will speak on will be about qualifications

Marya Crigler, Chief Appraisal for Travis

  • Tries to keep separation but there are good decisions and bad decisions so there needs to be some mechanism to address
  • Bettencourt – they are looking to address
  • Has no control over the ARB
  • Bettencourt – a system that allows for no termination for bad performance, is not workable, have not found case in which a person has been removed

Debbie Cartwright, Texas Taxpayers and Research Association

  • Change to create a real time tax notice really must be done to meet Constitutional Provision
  • What Travis is doing is what bill would require
  • Bettencourt – what do you think about audit ability on Comptroller data
    • Agree with that
    • Additional resources to help with verification would be useful
  • Would like to recommend that website not have word “county” in it to help reduce confusion
  • Would say “Travistaxes.com” or “Hunttaxes.com” as examples
  • Special panel revisions in ARB – only apply to counties with certain populations, currently it would be only 5 counties

 

Panel C

Texas Association of Manufacturers

  • Members companies agree with general direction, 8% is far too high for rollback
  • TAM on record favoring between a 4-6% rollback rate last session
  • TAM agrees with bills changes regarding ARB, real time tax payer information and notice
  • Applauds it a solution that addresses people equally
  • Notes business personal property is increasing rapidly, unless they can remedy
  • Changes in section 42 could be read in such a way that would allow rates to go up for ISD’s without an election
  • Rising cost could run businesses to other states
  • Hancock – hears pushback is that people are not complaining, hears biggest tool is 312 and 313 so have hard time separating local officials saying they need 312 and 313 to continue economic growth, if property taxes are not an issue don’t think they would need 312 or 313

Chad Williams, Texas Builders and Manager Association

  • For the bill
  • Predictability is part of problem, they are all over the place
  • Thinks visibility is great, nothing wrong with holding them accountable
  • Notes Troxclair pointed out things cities could cut instead of services
  • Bettencourt – astonishing load commercial businesses are carrying on property tax, over 50% of cost is property taxes

Vance Ginn, TPPF

  • Major issue that needs to be dealt with
  • Property tax is a burden that needs to be lifted
  • Suggests population growth and inflation as possible cap, total tax levy across state is up 214%
  • Property taxes and growth are doubling every 12 years
  • Transparency items are a key part of bill
  • Its not a cap, it’s a trigger of an automatic election which is key part of process
  • Would like to see this be across the board for smaller and larger taxing districts
  • What if there was an efficiency audit if they go above the rate
  • Look forward to continue discussions such as eliminating M&O over time
  • Hinojosa – would be a lot of micromanagement they would have to do, would see it up to local taxpayers to do
    • Would let auditor look at books
    • Concern on having third party micromanaged audit
  • Bettencourt – ability to pay has to enter into this equation
  • Hinojosa – what do we do if inflation goes above 2.5%
    • Thinks that where trigger comes in, just go to the voters
    • Its about local control for local voters
  • Paxton – appreciates some of plain English language you are using, people are becoming more educated because they are understanding some of the concepts that were cloaked in terminology
  • Paxton – this is about ultimate control to the people, could you repeat the percentage of increases
    • Last 20 years total property tax levy 212% but population and inflation only 114%

Chris Hill, County Judge Collin County

  • Fastest growing county
  • Many will lament the bill but they are mistaken, purest local control is allowing citizens to vote
  • Bill simply requires an ask of the voters
  • Low rate and reduced tax in last few years, understand if they won’t make difficult choices then they are putting sacrifice on citizens
  • Received feedback from over 3k constituents and over 90% support
  • Adopted a unanimous resolution to support the bill
  • Bettencourt – if we pass this bill will you take it to the limit, etc?
    • No
  • Paxton – thanks Judge for leadership without requirement to do so, asked for details on how they don’t cut services
    • Staged in areas of growth, look across landscape and use resources
  • Hinojosa – interesting when compares counties to cities, responsibilities on funding
    • Do provide fire services through contracts
    • Have sheriff department which patrols unincorporated area, county jail
    • If they want level of services that city dwelling citizens receive then they need to pay those taxes
    • More discussion, comments Commissioners have managed them well
    • Hinojosa – asked about bonds
    • Yes, all debt financing is separate from M&O and is in the I&S, I&S is taken to the citizens
  • Bettencourt – what if voters said no
    • If citizens decide not to approve bond measure, they have marching orders this is not what they want to pay for

James LeBas, Texas Oil and Gas Association

  • For the bill
  • True that petrochemicals and others than are highly intensive tend to move where they are affordable
  • Oil and gas plays an outside role in State of Texas
  • There are limits to how much people and businesses can pay
  • No new revenue and other changes are supported
  • Support idea that smaller taxing units are treated differently
  • Support is not predicated on 2.5%, have supported before at 4% so leave that to members
  • Hinojosa – no doubt the impact of Oil and Gas have had on the budget, but comment on 2.5% are you ok with other parts?
    • Yes
  • Hancock – uncomfortably confusing because 2.5% is not new growth, we keep talking about it but sometimes its about half the growth in revenue so not sure how to address – for him closer to 5% when inflation is at 2%
    • You get last year, new value, 2.5 and then voter approved
    • Agrees there are several pieces to the formula
    • Bettencourt – saw numbers all the way to 16%

 

Public Testimony

Texas Realtors for Corpus Christi

  • For the bill
  • Have a few technical changes requested
  • Hinojosa – requested them in writing

Elizabeth Reich, City of Dallas

  • Opposition – overall public safety takes 60% of budget
  • Have homestead and disabled exemption
  • Have reduced property taxes each of last 3 years
  • Would result in a savings for taxpayer of 15 cents per day but would cut
  • Hancock – new growth for property, total budget, etc
    • Total certified value went up 9.94% and 6.2 new appraisal
    • $1.36 billion
    • Saying almost 75% of personnel and since over 60% of budget is public safety
  • Hancock – asked if 2% is small amount of $1.36 billion?
    • Thinks it would be a challenge to deal with that
  • Bettencourt – cuts would be 2 pennies, talking about less revenue in future but you will have to lay off existing police and fire
    • 2 pennies
    • Response rates not where they want them to be and staffing is at all time low, so even if they can keep everyone still need to build back up
    • Bettencourt – but you have people already and your getting more revenue, does not see need to cut existing personnel
    • Revenue increase was largely driven by public safety need
    • Meet and confer, pension $6 million more, so many expenses and don’t address need for equipment
    • Bettencourt – homeowner tax rate up at astonishingly level of increase
  • Hancock – if nothing to cut but fire and police, bill simply allows you to go to voters; would citizens approve if your scenario was accurate
    • Think citizens have generally supported growth in the city and have been asking for services: public safety, infrastructure and code compliance
    • Thinks they would be supportive
    • Hancock – absolutely worst case scenario has been presented and in that case would go to voters

Jeff Coil, City of San Antonio

  • Oppose bill but supports meaningful tax relief
  • Nothing magic about 8% or 2.5% – neither tied to indicator
  • Hancock – it was based on inflationary numbers in history, inflation jumped to double digits so number was adjusted and indicated the number should be looked at when inflation dropped
  • Saying 2.5% is not reflective of reality, public safety about 2/3 and has grown on avg. just under 6%
  • 5% is far too low when talking about reality of budget pressures
  • Would request establishing rates that is more reflective of their budgets
  • Collective barging agreements done on multi-year so going to voters every year may not work
  • Can’t do local exemptions and would like to do it if given authority
  • If voters have a say on property taxes, lets talk about revenue sources for transportation
  • Bettencourt – we passed a prop which gave $2.5 billion to transportation already
    • Agreed was talking about local and city streets
  • Bettencourt – tax levy growth is up 41%
    • Includes new growth at 2%
  • Bettencourt – have 41% more revenue which is $175 million more
    • That does not show previous years where they were in the negative amounts
    • Agrees talking about reality of upswing so they have to balance over time
    • Bettencourt – this is the long-term pattern that puts tremendous pressure on home owners
  • Bettencourt – when you have this increase with no tax rate reduction
    • Have lowered rate three times in last decade
  • Bettencourt – does not have a decade of data but numbers are very high by any definition
  • Rollback rate is too high

Dan Olford, business owner

  • Testified in favor of bill
  • Property taxes are disincentive for manufacturers in Texas

Wallace Hargrove, County of El Paso

  • $242 million is what mandate could cost El Paso, revenues in El Paso have not outpaced but needs for services have
  • Would need to cut some services in order to do mandates
  • Hospital districts,etc have also exercised restraint
  • Critical to maintain fund reserves, cannot control 40% of certain revenues because they are provided by legislature
  • Would suggest 6%
  • Bettencourt – doesn’t see a 2.5% rollback possibly effecting them, not even gotten near there in the last 3 years
    • In 2 of the last 15 years have reached that number
    • Bettencourt – if you take the issue to the voters, would they approve
    • Refers back to Travis County Appraisal survey on how little people see the connection between those taxes and services provided
  • Hancock – 2 out of the last 15 years this would have affected you, would voters supported? If not speculating on it, then take it to them?
    • Will not speculating
    • Have adopted a tax rate only what is necessary, have 60 days on operating cash
    • Hancock – sounds like run efficiently but should take it to the voters

Steve Bassett, Texas School Alliance and Fort Bend ISD

  • Testifying on bill
  • Know that school finance and property tax at the same time
  • Not afraid of election date but when June 30th district, problematic to wait until November for TRE
  • Things will be clearer when see school finance bill
  • Concern on shifting from prior years value to current year
  • Need to know if debt service fund will be impacted
  • As far as 2.5% asked how inflation fits in
  • Hancock – on school board for 13 years, would like to work through his office on when they start budgetary process and how that works
  • Bettencourt – dog day summer elections have to end

Roger Williams, Property Tax Consultant

  • Commends them for placing emphasis on second multiplier
  • It’s not just about money but what is done with it
  • May change it to “voter approve rate”

County Commissioner from El Paso

  • Make up about 15% of what people pay
  • Could help by paying for unfunded mandates, state required programs and services
  • Review outdated fee structures and stop skimming fees
  • Stop making counties pay for state responsibilities, state courts example
  • Take financial responsibility for policies in place, no authority on zoning and cannot limit and regulate growth but still need to address
  • Bettencourt – In last 3 years, total tax levy has gone up less than 2% on avg. bill would have limited effect
  • Bettencourt and witness have further discussion but changes neither mind

Sen. Creighton

  • Does not get this, not sure if taxpayers would agree with message being presented on their behalf
  • Bettencourt – shocking to him as well, if doing well then take credit, if need to take it to the voters then do that

Maples, real property owner

  • Thinks premature in putting cap on revenue
  • Study needed on how government money is spent
  • Would like to see details on numbers of growth in new taxing entities
  • In his city he has three counties, pay taxes to three counties
  • Or could do rough proportionality study
  • Biggest problem is increase in valuation, lets cap at 2.5% not 10%
  • Creighton – for special purpose district or MUD is requested, don’t we usually ask if there is a resolution from the city? Yes. It is approved by voters and also presented in their truth in lending statement – very well documented and transparent
    • Agrees with most, but in some circumstances voters approve the district are approved by developer

Mike Obechaw, Self

  • Renters need to know what part of property tax they are paying so renter can go to proper person to complain
  • Notes time allowed should have been 2.5 minutes
  • Bettencourt – thanks witness for coming in

Dee Margo, Mayor of El Paso

  • There to inform, not really speaking against the bill
  • Want them to be aware of difference in Texas, analysis had highest population growth but lowest GDP in El Paso and valuations went up by 4.1% and in preceding years went up around 1%
  • Notes collective bargaining agreements for 4 years and adds to budget
  • Provides more budget details
  • Bettencourt – thanks him for speaking on the bill
  • Bettencourt – do you fear going to the voters?
    • No, never fear
    • Same debate as COs than GOs
  • Bettencourt – don’t have double digit increase, they are listening
  • Creighton – Thanks Mayor for speaking and privilege serving with him in house

Community College Association

  • Testifying on the bill
  • Want to work with them as stakeholders
  • Bettencourt – committee has admiration for community colleges

Michelle Davis, resident in League City

  • Thanks them and ceded time

CLEAT

  • Oppose bill
  • Bettencourt – just because Dallas City managers say it doesn’t make it true
  • Have angst and that is why they are there
  • Paxton – sounds like not against bill, but how cities will use the bill
  • Fully expect the subdivisions will use it as an excuse to lower standards in professional hiring, etc
  • Bettencourt – trust the voters
  • Anti-police environment is not a friendly place at the ballot box

Christy Rome, Texas School Coalition

  • Testifying on bill
  • Appreciate recapture situation and school districts are different
  • Provided details on survey
  • Bettencourt – issue of rollback elections in November is only time they can get there, do you have a survey when fiscal year starts and stops – would like to see it, maybe could look at more standardized language

Rodney Lanton, self

  • Big concern is delaying it until 2020

Cody Jones, Randall County and works at Sheriff Office

  • Located just south of Amarillo
  • Have not raised M&O for last 5 years
  • 6 safest city their size
  • 5% for them is $68k and that is one police officer
  • Bettencourt – currently not covered under this bill, why at taxpayer expense come speak on it when they are not covered
  • Know that they could be on the table
  • Love a lot of things about the bill – public hearing, transparency and visibility, statement of notices and real time database
  • Bettencourt – do realize it is 2.5% plus new growth, does not appear they would trigger
  • Bettencourt – lets say they go over, why would public not vote for it, should be testifying on the bill not against?
    • Will have to do some building
    • Bettencourt – demonstrating fiscal management, would have to go to bond issue
    • Bettencourt – can’t understand the angst
    • My angst is understanding of 2.5%
    • Bettencourt – long term inflation
    • If that changes will you go up
  • Says will not raise tax rate if the bill is passed

Randall County Sheriff

  • Probably agree with most of bill
  • Have hard core Republican voter base
  • Sounds like issues coming from urban cities
  • Bettencourt – Commissioner’s raised, so avg. tax levy has been 33%
    • Unique situation, being paid less than anyone in competitive markers
    • Have challenge hiring people

Kimberley Savage, self

  • Favor of the bill
  • Spoke about challenges staying in home due to taxes

Mayor George Fuller, McKinney City

  • Spoke about revenue raise ability may impact his ability to borrow
  • Bettencourt – says the bill does not impact bonding, not I&S
  • Says rate still impacts taxpayer and would impact debt
  • Bettencourt – disagrees with his conclusion
  • Bill is not real tax relief, that can be found somewhere else such as school funding
  • Bettencourt – how could it impact?
    • Restricting revenue has potential to downgrade bond rating
  • Bettencourt – increase is 61.8% in tax revenue over last 4 years, have highest increase of any city that has testified
    • Saying that was before his tenure
    • 3rd fastest growing city
  • Bettencourt – do you know new growth percentage, etc – new growth approx. 5% so would be looking at an 8% limit
  • Paxton – ran on being responsible to citizens
  • Bettencourt – talking about lowering M&O
    • Lets talk about the defunding schools
    • Notes he has said it would be one time and could not quantify

Ross Kecseg, Texans for Fiscal Responsibility (Empower Texans)

  • Taxpayers have said they are looking for reform and relief
  • This bill addresses the reform
  • Thanks for renaming it to “voter approved rate”
  • Suggest instead of no new tax revenue but “no new tax increase rate” or something
  • Tax data from the DFW area provided, shows impacts to avg tax payers
  • TML will never support any part of this bill
  • Bettencourt – let them speak for themselves
  • Bettencourt – out of time

Christ Newton, Texas Apartment Association

  • Support of SB 2

Small Municipality in North Lake Texas

  • Said opposed, need to be treated equally as a small municipality
  • Appraisal system has increased on avg. 10% each year and 3 school systems get 70% to ISD over the town
  • Core issue on tax burden is the district
  • Switched position to on but concern they are segregating small municipalities
  • Would support fully 4-5%

John Carlton, Association on behalf of Fire and Emergency Districts

  • Signed up opposed, does not want to oppose any appraisal reforms
  • Focus is on carve-out
  • Appreciate beginning of conversations
  • Hancock – ESDs generally don’t have elections, so if they do it will be unique
  • Bettencourt – would be just a few thousand dollars
    • It does have a range

Bradon Burton, Self

  • Heard Mayor Frisco and Pro-tem are opposing the bill and decided to come down and support the bill

Eliska Padilla, City of Hutto

  • Not afraid of going to voters but it does put a halt on things
  • Ask for a 5% trigger for rollback and exempt police
  • Thank them for exemption of I&S
  • Paxton – how do you feel it ties your hands at 2.5%
    • It could be a 6 month delay on some projects
  • Hancock – the part you like is that the rate doesn’t impact fast growth
    • Do appreciate it
  • Hancock – So you would be able to meet your needs at the 2.5% as it is over and above the current number
    • Would need to check with CFO
  • Hancock – We recognize the needs of fast growth districts

Ashley Lumpkin, City of Hutto

  • Would like an exemption for police and fire, also would support I&S exemption
  • Supports tax relief; would also like to see 2.5% go to 5%, even if it is effective rate
  • Hancock – So you want tax relief for your citizens, 5% has no impact/provides no relief for vast majority of taxpayers around the state

Byron Franklin, City of Hutto Chief of Police

  • Police is currently 33% of city budget, has grown by more than half in his tenure & services have expanded to accommodate need with good outcomes
  • Would like consideration for making the 2.5% rollback trigger not a hard number
  • Paxton – I think we are incorporating flexibility into this bill, number is a trigger, not a cap & gives you the flexibility to be responsive to taxpayers
  • Paxton – Haven’t heard individuals against the 2.5% trigger so far, has only been taxing entities

Al Zito, Southlake Resident

  • Cities and ISDs have been engaged in unchecked tax raising spree
  • Have mastered finger pointing and blame game, trying to manipulate voters and control outcomes through shifting elections, etc.
  • Entities are using taxpayer money to lobby against taxpayers
  • 5% is a hard number and could be difficult to adjust, would like to see it tied to economic indices in the bill (i.e. inflation)
  • Should eliminate appraisal district & process, freeze values at purchase price
  • 10% appraisal issue should coincide with 2.5% to provide double protection for taxpayers

Paul Hudson, Johnson County Resident

  • For the bill & transparency, Convention of States supports this issue
  • Need relief in addition to reform, taxpayers expecting relief from Senate and House
  • Bettencourt – Just keep dragging people into this fight
    • People are ready to participate
  • Bettencourt – Polling for 2.5% is very strong across demographics

Mark Jack, State Association of Fire & Emergency Services Districts (SAFE-D), Parker County ESD 1

  • ESDs are capped at $.10, need elections to reach this amount
  • Gives overview of Parker County ESD 1 stats, well equipped & staffed
  • SAFE-D is against the bill, roughly 12 districts will be affected by this
  • Bettencourt – Since you have a service that people understand, have any ESDs taken this to rollback elections & what are the results?
    • Not sure about this
  • Bettencourt – Do you know what districts are raising their tax rate by?
    • No, most don’t want to encounter an election to raise rate
  • Bettencourt – With the absence of data and no ESD elections, wondering why you are opposing the bill?
    • We don’t want services to be affected, 12 districts effected by bill as is
  • Bettencourt – Just because 12 districts are in does not mean they are incapable of handling it or taking what they need to the public for approval
    • Most vote no when they see a tax rate increase
  • Bettencourt – This has not been the case for bond issues
    • We don’t do bond issues, we are capped severely at $.10
  • Bettencourt – How many are taxing units are bound by this rate now?
    • Most of these would be in the Harris County area
  • Bettencourt – Without data we aren’t arguing anything factual

Dan Hart, Self

  • No recourse for taxpayers, need small claims court for small families
  • Cannot have sold and unsold appraisals of parcels be equal, need to use value on property just before the sale; will give more validity to the state property value study and avoid sales-chasing
  • Need a manual for appraisal process on single family homes
  • Need to consolidate legal opinion, AG needs to be the source of legal interpretation
  • Bettencourt – So if we have IAAO standards & a property tax code, you believe a manual can be written on single family homes?
    • It certainly can, but appraisers do not want a manual; HCAD has influenced appraisal across the state

Rich Deott, Southlake Resident

  • School taxes in Southlake have gone up a lot recently
  • Low income areas are getting hit harder than others
  • TML is trying to organize the opposition and pushing for police & fire involvement

Evette Deott, Southlake Resident

  • Supports the bill

Judge Glen Whitley, Tarrant County Judge

  • Opposes bill, percentage numbers can be misleading; looking at increasing levies from a dollar perspective it appears much smaller
  • State shar of school funding has slipped since 2008
  • Bettencourt – You have a relatively low tax rate, had one increase in 2014-15 of $.02 via Comptroller data
    • Disputes the increases and offers to speak with Comptroller
    • Over last 10 years, per capita, county tax has gone up $.54
  • Bettencourt – Can’t say if he agrees or disagrees, can only speak to levy and wants to understand growth levy; trying to understand opposition to bill based on County not really approaching rollback
    • Opposing based on local control, disagrees with the statewide threshold
  • Hancock – Can’t respond to misinformation
  • Bettencourt – You say you’ve lowered the rate, numbers we have show double-digit assessed value coming in, if values go up and rate doesn’t come down, you end up with tax increase
    • Citizens of County have opportunity to elect officials every 2 or 4 years
  • Bettencourt – For your state service, rollback rate has largely been at 8%, increased from 5%
    • State was paying 65% of public education when this was in effect, state is now paying 35%
  • Bettencourt – Don’t want to retread, but have also been championing weaning off of robin hood, state has been well below 8% since its implementation by any measure of inflation; why not set this according to inflation
    • Goes back to local control & state share of education
  • Bettencourt – This is nonsequitor, bill addresses cities, schools, etc.; presents slide on rollback versus inflation and asks Whitley why it shouldn’t be lowered
    • Largely because of state action, state leaves state prisoners in county jails, indigent defense costs, etc.
  • Bettencourt – The issue now is that the rollback limit is way above the inflation rate and tax bills have gone up; why are we not lowering rollback to match lower inflation
    • Because you have underfunded mandates, indigent defense is about 7% of total county budget
  • Bettencourt – State is addressing robin hood and working on other issues, why not lower the rollback to match inflation?
    • You say you are correcting issues, but school finance has not been corrected; does not have cause to believe it will be fixed this year
  • Bettencourt – I spent the last year working on school finance, tax bill is designed to address the scho0ol levy as well
    • This is weakening the property tax system
  • Bettencourt – I’m weakening it by providing relief?
    • Yes, because it is more difficult to work with later; other states used as models also rely on personal income tax
  • Bettencourt – Why not lower the rollback rate to help slow growth of property tax bills?
    • Bill excludes everyone below $15 million, will also result in creation of more special district as those below will just create more
  • Bettencourt – We will disagree, but by any measurement we’ve had a rollback rate that exceeded inflation for too long; original intent was to have rollback fluctuate along with inflation
    • Disagrees with the argument as it deals with percentages and not dollars, by dollars we have not increased that much
  • Bettencourt and Whitley discuss the portion of districts that will be affected, Bettencourt notes 2.5% rate will affect hundreds of school districts & hopes rollback rate would encourage taxing units to continue below the threshold
  • Bettencourt – Have leaders in the state committed to school finance reform
    • Whitley asks where the $14 to $15 billion needed to support education will come from
  • Bettencourt – These are the wrong numbers; the rollback rate needs to be fixed

Patrick O’Connor, O’Connor Property Tax Consulting

  • For the bill, clients are fatigued year by year by property tax increases
  • Does not understand local officials testifying against the bill which would let taxpayers decide
  • 5% will really be 4% to 6.5% anyways considering growth
  • Appraisal Review Boards are essentially a sham in most counties, should use qualified individuals: real estate agents, real estate brokers, attorneys, etc.
  • ARB training is insufficient at 8 hours
  • Bettencourt – So you are supporting the bill despite potential reduced profits due to fatigue of clients?
    • Yes

Kevin Brown, Texas Association of School Administrators

  • On the bill, want to work with Committee in providing for Texas students
  • Have heard from constituents on high property tax bills, appreciate transparency in state share and growth provisions
  • State mandates drive local cost & often state action is poorly estimated in terms of cost
  • Should consider school finance and property tax in tandem, issues are linked
  • Hancock – We hear a lot about state mandates, filed bill in the House for pilot program to exempt districts from state mandates, everyone against this bill were from education associations; many mandates were brought about through associations
    • Would be happy to go through a list of what TASA considers to be unfunded mandates
    • Knows that many districts would appreciate regulatory relief
  • Hancock – Many seem to want to pick and choose mandates, some were lobbied for, would you agree?
    • TASA would be happy to be part of the conversation on unfunded mandates
  • Bettencourt – You’ve been following the School Finance Commission, you know we’ve been discussing school finance, alleviating pressure from robin hood, etc.
    • Appreciates the work of the Commission, asking that school finance and property tax be considered in tandem
    • Would like measures that provide support to schools with flexibility, and also provide relief to taxpayers
  • Brown also urges Committee to keep regional differences in mind

Richard Boner, Kirk County Resident

  • Supports SB 2, growth in area will likely cause tax bills to raise soon; taxing entities and appraisal district seem to be raising values to force residents out

Joe McComb, Mayor of Corpus Christi

  • Appreciates desire to find solution to the problem, understands need for affordable housing and tax relief
  • Supports solutions that provide relief without decreasing civil services; have not heard suggestions of where city services should be reduced
  • Appreciates natural disaster cutout
  • Bettencourt – If you don’t like 2.5% what number do you like?
    • Needs to be some flexibility, could cut out public safety, etc.
  • Bettencourt – Corpus Christi is into the upper 40s% for increase over last 4 years for tax levies
    • Corpus Christi raised rate in 2018 by $.02, approved by an up to $.06 vote for road repair; delayed due to Harvey
    • Road repair funding will be put into a separate fund, city hoping to avoid going into debt
  • Bettencourt – Issue is that as values have gone up in Corpus Christi, the rate has increased as well; we need to balance the equation
    • Happy to work with the Committee, needs to be responsive to constituents as well asking for services
  • Bettencourt – If the state is working on compressing school taxes, need to also look at compressing city rates
    • Not against the bill, just think the 2.5% is too low
  • Hancock – New growth doesn’t count against threshold, what was yours last year?
    • Would need to look at data as it is compared to loss due to Harvey; there was some offset in terms of loss of valuation versus new construction
  • Hancock – You were beyond 7.999% if you had any new growth at all
    • Will take your word on it
  • Bettencourt – Regardless of rollback rate, new growth is exempt from calculation

Tamara Colbert, Self, Voluntary Convention of States

  • Taxpayers should be part of decision of how much taxes are raised, supports SB 2

Bill Jackson, Harris County Commissioner’s Court

  • Against the bill primarily on the 2.5% rate
  • Harris is a unique area with no sales tax proceeds, need to do all improvements based on property tax & need to accommodate growth in area
  • 42% of property taxes in Harris County go to health care, would like Committee to look at cutting this out and possibly tying to inflation
  • Also could look at law enforcement and justice
  • Bettencourt – Harris County is likely the largest increase in our data, $500 million over last 4 years without increasing rates
    • This involved the balance sheet, Harris County paid for Harvey damages out of reserves
    • Harris is also 92% funded on the retirement plan
  • Bettencourt – Presents data showing a 34% increase on the average tax bill in 4 years, rollback needs to be lowered to control
    • Would like constitutional mandated issues to go by the rate of cost
  • Bettencourt – Indigent health care is exempt from calculation
    • What about jail? This is $80 million
  • Bettencourt – $80 million out of $500 million, rollback rate needs to come down, what number would you prefer?
    • 5%, we can work with you on something

Shelby Williams, Collin County Resident

  • Supports SB 2, no justification for continued increases and large reliance on property taxes in areas like Plano

Casey Thomas, Mayor Pro Tem of Dallas

  • Opposes SB 2, 2.5% rollback rate will hurt public safety, including 100% of property tax revenue; with 2.5% cap, Dallas would not have been able to fund things like pay increase for safety officers passed last year
  • Dallas is open to discussing options for meaningful property tax relief
  • Hancock – Dallas budget is $1.37b with impact of $32m, my guess would be that you wouldn’t go to fire and police as the first place to find 2% savings?
    • Can’t speak for the CFO, personally would want to scrub the budget and look at all areas, but police and fire is 60% of the total budget
  • Hancock – We are talking about a 2% impact, have no doubt you will be able to maintain level of services and still find this reduction; would also assume citizens are competent enough to vote for increase to maintain these
    • This is a possibility, but we want to make sure we maintain services
  • Hancock – If your voters thought the cut would impact fire and police, do you think they would pass the proposal to avoid a cut?
    • Would think voters would ask for a look at all of the options
  • Paxton – Safety would be the last place we cut, voters would likely care about this the most & would expect voters to support funding safety
  • Bettencourt – You understand we are looking at new growth plus a rollback, also highlights that there would be no impact to public safety as it stands today
  • Bettencourt presents data on Dallas property tax bills increasing 33% in 4 years
  • Bettencourt – We’re trying to slow the growth of tax bills, Dallas has one of the highest tax rates; rates need to come down as values go up because taxpayers cannot keep up
    • Without mandate on pensions, Dallas would’ve come in under 2.5%

Jerry Duffield, Dallas County Fire Chiefs Association

  • Looking at large increases in costs, would like a higher rollback threshold; generally supports tax relief, action during disasters very costly
  • Concerned over where revenue will come from in communities that are not growing as well
  • Bettencourt – DeSoto has a very high rate of increase
    • DeSoto has gotten to be financially stable, have been playing catch up
    • Gives us 5% and we’re on
  • Bettencourt – Current growth is unsustainable
  • Hancock – There is an element in the legislation that allows for disaster declaration

“Tracy,” McKinney Resident

  • For SB 2, property taxes in McKinney have grown tremendously and pricing residents out of property ownership
  • Local governments should not be using taxpayer dollars to lobby against taxpayers

Richard Davey, Self

  • Supports SB 2, local governments don’t want to be accountable to taxpayers

Tom Fabry, Frisco Resident

  • Entitlement environment fosters public officials’ action against taxpayers
  • Provides examples: Frisco threatened to pull back homestead and senior exemption if this passed, councilmembers have suggested citizens move due to high prices, city planning has used false info suggesting projects would not be completed, etc.

Fran Rhodes, Fort Worth Resident

  • Supports SB 2, tired of whining from local governments when families are struggling
  • Bill is a good start from reigning in tax bills, concerned about exemption for communities under $15 million in revenue as those taxpayers are suffering too

Crystal Main, North Richland Hills Resident

  • Supports SB 2 with caveats, need additional measures to assist residents now
  • Also against $15 million exemption and there should not be an opt-in vote
  • Tired of cities complaining and using lobbyist to argue against taxpayers

Barry Dorsch, Fort Worth Resident

  • For SB 2, assessment has risen dramatically on his property in the last 5 years, likely could not get this much if he sold
  • Not tax relief until they go down
  • Bettencourt – That would be a tax cut, currently doing tax relief and reform

Rocky Gilley, Kennedale City Council

  • For SB 2, Kennedale is currently exempt under bill
  • TML, Texas Association of City Managers, etc., have been lobbying against the bill
  • Taxpayer control is self-correcting, if roads aren’t fixed one year then the vote will swing the other way the next

Joe Palmer, Self

  • For SB 2, appreciates notice, additional hearings, publishing of roll, rollback elections etc.
  • Appreciates specific instructive language in survey & would like to see this expanded to all property owners and not just those that protest
  • Should have voter participation in the ARBs or tax-assessor collector positions
  • Bettencourt – We’re done with petitions, regardless of the vehicle; asks for other recommendations to be submitted in writing

Clayton Chandler, City of Mansfield

  • Many elements of the bill that Mansfield would support, 2.5% gives city concern
  • Not possible to predict what bond rating agencies will do, but they are interested in the passage of SB 2

Peter Phillis, CFO, City of Mansfield

  • Mansfield’s public safety plan predicts need for $20 million in 2028
  • Including bond covenant reserve requirements, Mansfield would need about $58 million
  • Bringing current increase of 6% down to 2.5% will mean Mansfield will have to slow plan to increase public safety sector
  • Bettencourt – Mansfield would be seeking voter approval at the 9% rate projected, if you are looking at buildings you will have to have approval for debt
    • If Mansfield has encountered an essential spend, City has issued COO instead of going to voters
  • Hancock – Do you get any approval from voters for COOs?
    • Get approval from city council, so no
    • Understands the issues some have with this, but wants to focus on the projections of Mansfield and the public safety plans
  • Hancock – Right, you’ve made significant spends on debt without going to the voters
    • Not in this model
    • We’ve had discussion about bond elections, COOs were issued in the past & wouldn’t be issuing new debt under new growth
  • Bettencourt – Did you ever lower your tax rate?
    • $.71, was $.73 at one point
  • Hancock – You have all of this new revenue not counting against the rollback
    • Mansfield is trying to leverage the new growth to be able to use appraisal increases to hire police officers and fire fighters
    • Chandler, Mansfield – Have issues with needs now that need to be built out and property tax revenue will not come from areas for some time
  • Bettencourt – COOs are an expensive way to do debt, need to get rid of idea of holding tax rate at $.71 as values increase

Henry Bonart, Brazoria County Resident

  • Supports SB 2, property values for his family farm have skyrocketed, tax increases would be prohibitive if not for agriculture exemption

Susan Spitaro, Self

  • Would encourage Committee to include very specific ballot language in the bill, appraisal system should be kept independent and changes done through law

John Osenbaugh, Property Tax Consultant

  • Requirements are frequently ignored or misrepresented by appraisers and ARBs
  • Have overemphasis on maps and PBS, needs to be cut back to every 3rd or 4th year, Comptroller needs to continue guidelines & can base on national guidelines

Darrell Hale, Collin County Commissioner, Precinct 3

  • Constituents are broadly in favor of tax reform, school finance reform, and relief
  • Rural areas often feel effects more than urban areas, these areas need relief too
  • Should consider provision to require funding tied to unfunded mandates

Michael Berlanga, Christian Chamber of San Antonio

  • Truth in taxation is critical, also applies to small business owners; supports SB 2

Charles Reed, Dallas County Commissioners Court

  • Against SB 2, low or no debt areas do not get any benefit of fiscal responsibility; Should explore low or no debt counties getting a percentage carve-out not subject to 2.5%
  • Large portion of budget is unfunded mandates, $145m directly linked to laws passed by the state without funding
  • Bettencourt – Have you cut the tax rate?
    • No
  • Bettencourt – The issue is that levies will go up with values without rate decreases; Bettencourt highlights Dallas County data
    • Large number for public schools
  • Bettencourt – We will be addressing this too, will be compressing taxes
    • I know you studied what you should do, but you haven’t done it yet & there is no guarantee
  • Bettencourt – 30% increase in Dallas County, >$5k
    • $2.3k of which is schools, not to speak of Parkland whose costs likely double 2.5% growth year to year at least
  • Bettencourt – Taxes in your area are well over 3x the wages in your area
    • We adopt a budget we feel is best for the community & voters can voice their concern
  • Hancock – Do you think property taxes are a concern for your citizens, do you think it is a growing concern because they are growing higher than the ability to pay?
    • We have very generous homestead exemptions, concerns we’re hearing circle around services
  • Hancock – If we were to poll your citizens, do you think they would be concerned over property taxes?
    • They would be concerned over any poll on taxes
  • Hancock – I know you don’t want to answer this, because the simple answer is yes
    • Highlights how large portion of Dallas County budget being unfunded mandates
  • Bettencourt – If you don’t buy down the property tax rate, there is no relief
    • If you don’t buy down school taxes, there is no relief either
  • Bettencourt – When all state leadership is aligned things tend to happen

Gilbert Ramos, Self

  • Supports SB 2, taxes are too high, local government officials don’t have a good answer for how to lower property taxes and don’t seem to trust voters to vote on taxes

Gail Johnson, Self

  • Largest issue personally is the appraisal issue and district system, should be thrown out and replaced with something different
  • Taxing units need to learn to work within budgets

Jeff Looney, City Manager, Granite Shoals

  • Citizens have opportunities for input, cities have negotiated with constituents, not sure elections are the direction to go
  • Could endanger public safety and infrastructure operations in rural Texas
  • Bettencourt – Do you know how much your tax levy has increased?
    • About 7% from last year, not sure over 4 years, current rate is .596
  • Bettencourt – There has been a 40% increase in total tax levy for Granite Shoals, tax rate has gone up $.10 in this time period
    • We are only residential, increase also due to annexation
  • Bettencourt – If you don’t have new growth why are you raising the rate?
    • There is $17m worth of necessary projects, like getting the city off of septic systems
  • Bettencourt – Are you using debt for this or M&O?
    • Both, we pay as we go, also using bonds
  • Bettencourt – Debt is not part of this conversation
    • Not at this time, but that doesn’t mean it won’t be added; you need to look beyond 5 years at what will happen to small communities
  • Bettencourt – Debt has never been a part of the calculation for 40 years
    • You can say this, but citizens look at the total tax rate
  • Hancock – Long-term look on this is a compounded rate beyond the ability of people to pay
    • I don’t disagree, local control needs to be involved

David Carter, Citizen

  • Supports bill; Recommends changing references to ARB to appraisal process.

Michael Naughton, City of Leon Valley

  • We need to plan for the costs ahead, because costs are raising 2.5%/year.
  • Bettencourt- Do you know how much your appraised values are going up?
    • I don’t know how much the values went up.
  • Bettencourt- Priority should be accommodating the increases

Colleen Vera, Harris County Resident

  • SPDs have the highest property tax increases; suggests adding formula provided in written testimony to SB 2 to work out cash return

Kate Heighner, Harris County Resident

  • Supports SB 2 and recommends that public hearings should be held after work in the county being taxed.

Carol Maxwell, McKinney Resident

  • An election is required because municipalities do not want to give control to the citizens.

 

Ken Shetter, Mayor of Burleson

  • Testifying against SB 2, but not against the transparency and accountability sections.
  • The 2.5% cap concerns me, because if it was in place last year the city of Burleson would have lost $1 million in revenue.
  • We had a $1.1 million increase in pay just for public safety increases and spent $1 million on an increase in healthcare.
  • Concerned about the impact of the bill, because it could impact infrastructure in the long term.
  • Hancock- So there would be less than a 2 percent impact?
    • If you are looking at all aspects, then yes.
  • Bettencourt- The last number seen is 73 ½ cents, have you maintained that rate?
    • Yes, we have.
    • We increased around 2013 related to a bond election that passed.
  • Bettencourt- The amount of tax collections in 4 years is 51. 9 percent. This is just a suggestion but, when the rate is high and there is no tax relief then you will see a raise in property tax levies. What is your new growth?
    • New growth value was $92 million for the last year.
  • Bettencourt – That is probably 4 percent I am guessing. This is a substantial tax increase. There are only a handful of cities that have had a 50 percent increase over 4 years.
    • If you applied 2.5% percent cap over 4 years, it would cost us $1 million.
    • It is $1/month that our citizens would realize in tax benefit.
  • Hancock- Would you agree if you compound that out it will grow?
    • Sure.
  • Hancock- Taxpayers look at what they are saving in property taxes. If you know your citizens are ok with spending 2.5% percent, then you can ask them with confidence
  • Bettencourt- In 2017, without a rate increase, the amount of tax levy that went up was 17.4 percent. The levy went to $17.9 million.
    • I do not recall passing a budget that increased that much.
  • Bettencourt- I can only talk about the property tax side of the bill, it is just M&O. The voters should have had a say in an 11% increase.
  • Bettencourt- The roll back rate will be reduced and I recommend that you take anything you need from above that. The polling around Burleson is very solid for property tax reductions.
    • I am not disputing property tax relief, but I do not think this bill supports that.
    • This bill would give our citizens $1 a month.
  • Bettencourt- What is your total population?
    • Around 45,000.
  • Bettencourt- 11% increase in 1 year was $2 million. So in one year 45,000 citizens paid $2 million more. You do the math and tell me what it is?
    • We’ve only had a couple of days to look at the bill before we weighed in.
    • We want you to consider the 2.5% percent.
  • Bettencourt- The 1 year is $40 per capita. I need to see your numbers

Kathy Ponce, Ellis County Resident

  • Need to include school finance reform in the legislation to unburden Texas tax payers.

Chris Schuchart, Medina County Judge 

  • Is opposed to the 2.5% part of SB 2.
  • We do not have corporate growth to support the people moving into our county.
  • If I take out the new growth, we were just below the 8 percent on the roll back rate.
  • $ 590,000 was from growth in property taxes and if we were in the 2.5% addition, we would have lost more than $400,000
  • Hancock- You went up 7.9 percent?
    • Just below roll back rate.
  • Hancock- Employees only got a 3% increase to pay vs. the increase in property taxes, and the property taxes went up 7.9 percent?
    • Yes.
  • Hancock- So you understand why that’s an issue for them?
    • Yes.
  • Hancock- So they are looking at a 16% in 2 years versus a 6% increase in pay, you follow me?
    • Yes
    • Also, want to say that our jail has tremendous turnover because we cannot compete with Bexar County.

Brian Johnson, Mayor of Kennedale 

  • On the fence about the bill
  • Mostly concerned about the 2.5% and inflation; construction and Health care costs go up each year.

Larry Gaddes, Tax Assessor-Collectors Association of Texas

  • Many positive aspects of SB 2, including removing the estimated taxes from the appraisal units and the real time database.
  • Recommends amending language to add tax assessor to the advisory board
  • Needs to be uniform notice to help taxpayers understand the process
  • Apprehensive about mandatory deadlines

Tarry Wearham, Smithville Resident

  • I do not see how we can find any transparency in the property value calculations if elected officials and people with no skin in the game decide on it.

Terry Holcomb, Republican Party of Texas

  • Want to make sure rural counties are included in the bill and recommends that the ARB system be abandoned
  • Taxpayer dollars are going to lobbyists who are lobbying against us.
  • Have a bill coming that will give homestead exemption from M&O and will give business a break on property taxes.

Cathleen Caso, Self

  • Supports the bill, but would not need appraisers if we had a better tax system. Thinks the bill should go to 1.5% percent.

Anthony Wynn, Travis County Resident

  • Supports the bill, has seen a 53% increase in 9 years on my property taxes.

Eric Schaeffer, Self

  • Likes the work being done on the bill, but does not support all aspects of SB 2 right now as the levies will still be going up.

George Haehn, Mayor of Buda

  • A majority of the taxes are from the local ISD.
  • Shouldn’t dictate down to the smaller governments about what they should do.
  • There needs to be something done about the rollback rate, however I will be for the bill.
  • Paxton- The states created the cities, so there is a difference from state governments telling the cities what to do rather than the federal government telling the states what to do.
  • Hancock- The Senate has put limits on itself and has gone to the voters for input; there are times government needs to do this.
    • The voters have to bear some responsibilities for the people who govern.
  • Bettencourt and Haehn discuss Buda’s tax rate, dispute specific numbers
    • Everyone wants some form of property tax relief, but to get to a solution you need to look to the ISDs & the lack of state support.
  • Creighton – The state acts to protect local control, but also acts when local governments are out of control; constituents traveled from all over the state today to speak against rising taxes

Ricardo Modesti, Harris County Resident

  • Districts ignore market activity to assess values
  • Has witnessed ARB members seek legal counsel from the district’s attorney during a hearing.
  • Bettencourt- They are not asking their own ARB attorney?
    • No, they are calling legal counsel for the district
  • Bettencourt- We cannot have the ARB members asking the appraisal district attorneys. You saw that in Fort Bend?
    • Yes.
  • Bettencourt- That needs to be prohibited
  • Creighton- We have other bills that address reform at the ARB, some require elected ARB members, changes to appraisal methods, etc.

Adam Cahn, Cahnman’s Musings

  • Supports SB 2, but not a complete fix
  • Automatic rollback elections are positive, SB 2 and the 2.5% trigger would curtail the most abusive behavior of Austin
  • This needs to be a start, need to be net relief year over year on tax bills

Adam Hanes, Conference of Urban Counties

  • Opposed to SB 2 as it is drafted, one of the main things is the timeline which needs to fit the timeline on the appraisals, crunching dates back puts pressure on the appraisers.
  • Bettencourt- There will be some additional language we’re looking at
  • Hancock- Your county is involved in economic development?
    • Yes.
  • Hancock- Are property taxes an issue in your county?
    • Yes, the citizens are concerned about rising property taxes.
    • Should focus on public school finance, meaningful school finance reform would deliver reform
  • Hancock- You understand how this bill does that over the long term, really only at the 2.5%?
    • I’ve heard those comments and read the language
  • Hancock- What are the counties tools to draw business in?
    • Chapter 312.
  • What does Ch. 312 do?
    • It is a property tax relief system.
  • Hancock- Why do businesses look for Ch. 312 when moving to Texas?
    • They can use it in a leverage.
  • Hancock- We need Ch. 312, why?
    • So we can bring jobs into our counties and benefit from increased growth.
  • Hancock- What is the main reason you need it though?
    • To offer incentives.
  • Hancock- Why do you need this incentive specifically?
    • Because it provides property tax relief.
  • Hancock- And what is the biggest issue when trying to get businesses to come to your counties?
    • Infrastructure, being able to offer police and fire services, etc.
  • Hancock- Is the reason that Ch. 312 is so important to counties because property taxes are a major concern for business when looking at counties to move to?
    • Property taxes are one of the major concerns
  • Bettencourt- Displays a map that shows local tax burdens nationally.

Carol Spencer, Bastrop County Republican Precinct Chair

  • New Jersey did not have ARBs, sales prices of homes were public and it stayed at $400,000 until an equalization ratio dropped below 60-65 percent.

Judge Joe Shuster, Pecos County Judge

  • Fearful the 2.5% increase will not allow us a reserve of cash; Since 2013, our tax rates went up to 79.9, but was below the effective tax rates due to decay.

Judge Jay Elliott, Falls County Judge

  • I am against the 2.5%; Over a year we get $143,000, but when I take out the 8 percent it goes to $131,000.

Jim Allison, County Judges and Commissioners Association of Texas

  • Until we pay for schools and unfunded mandates, we cannot support the bill.
  • Bettencourt- We are going to get the rollback rate down and if we have to stay for a special session we will.
  • Hancock- We should have implemented this 10 years ago which would have saved $30 billion.

Donald Locks, Bastrop County Resident

  • The gentrification in east Austin is happening in the counties surrounded by metropolitan areas and the rollback election is an excellent idea.

Judge Robert Johnston, Anderson County Judge

  • Anderson has a lot of exempt property and low paying jobs.
  • Brought in Sanderson farms and gave them Ch.312.

Judge Rick Hill, Brazos County Judge

  • The 2.5% will restrict ability to serve the people of Brazos County.

Michael Truitt, Denton County Constable

  • Opposed to SB 2; could affect constables throughout the state.

Karl Mooney, Mayor of College Station

  • In favor of the notification changes.
  • In fiscal year 15 we added 2.65 cents to the tax rate and in 2019 we have 0.583 cents because we adopted 4A into homestead exemption.
  • If the rate were not approved, then new council members would be forced into discussions about a new budget.
  • Bettencourt- How many tax lines do you have?
    • 5; Your announcements did not take into account the small cities like College Station.
  • Supports SB 2.
  • Hancock- Notes Houston Chronicle has stated that the Committee is hushing critics, takes issue with this as committee has been taking testimony all day.

Eric Greaser, Flower Mound Fire Chief

  • Concerned how the 2.5% increase will affect ability to hire new firefighters.
  • Bettencourt and Greaser discuss Flower Mound’s low tax rate, Bettencourt notes that the city would be under the 2.5% trigger as proposed
  • Hancock- Police and fire would be the last thing any elected official cuts
    • We don’t operate in a vacuum, must operate in the constrains of municipal finance

Robert Abbott, Lake Travis Fire Rescue Fire Chief

  • As an ESD there is a cap, cap can prevent small communities from putting more money into ESDs; what reform does an area get that wants to and is willing to give more?
  • If we want to let taxpayers decide, then should allow them to in this situation as well
  • Suggests removing ESD cap as there is no need with a trigger, also suggests removing certification fees and adequately funding Commission on Fire Protection

Roger Falk, Travis County Taxpayers Union

  • This is a great piece of legislation, and at some point, growth will expand the tax base and compensate those costs; please keep the 2.5%.
  • Bettencourt- 2.5% is the level you get real property tax relief at via compression on the school side; and if we set this marker for the schools, why not also for the cities, counties, SPDs?
    • I’m one of the few that don’t have a problem with Chapter 41, particularly in Travis County, but we have a $1.19 tax rate

Summer Wise, SD 24 SREC

  • For SB 2 generally
  • Would like to ask for clarification on Section 42 of SB 2, changes Tax Code Sec. 26.08(n), seems like the hard cap of $1.04 per $100 of M&O would be eliminated
  • Bettencourt- This is placeholder language, no intention of eliminating rollback automatic elections in schools
  • Bill is a great start, would like to see more in terms of appraisal reform, tacking them to buy & sell transactions might be a good option & would eliminate the protest process
  • Bettencourt- What is it you are saying?
    • I like the idea of reforming the appraisal process and tying it to purchase price; really seeing runaway appraisal process

 

CSSB 2 left pending

 

Bettencourt – Expect a call for a meeting at 1:30pm on Monday