Why the Property Tax ‘Relief’ Bill is a Useless Sleight of Hand
State lawmakers blame local officials for property taxes, while passing futile bills to make it seem like they’re doing something.
Every red-blooded Texan hates property taxes. Count among them Lieutenant Governor Dan Patrick, who advocated for a costly property tax “relief” package last session, and Senator Paul Bettencourt. Bettencourt even held a seven-city listening tour — complete with egregiously misleading statistics — in the interim to allow Texans to vent on the subject.
Now Bettencourt says he’s fighting rising property taxes with Senate Bill 2, which passed out of committee on March 16 and could go to a vote in the Senate soon. SB 2 would require local governments to hold special elections if they increase property taxes by 4 percent or more, halving the current 8 percent limit. It also includes a number of other administrative tweaks and structural changes that supporters say would give residents the power to reign in wasteful, free-spending local authorities. (Though most property taxes paid by Texans are for local schools, which this bill doesn’t touch.)
State lawmakers, particularly conservative lawmakers who represent suburban Texas, benefit when the brunt of the blame for high property taxes is borne by local officials, especially when they can cast themselves as the solution. Bettencourt reported after his interim tour that there was an “overwhelming cry” for property tax changes, and he’s emphasized what he describes as abuses of power from local officials. He’s Robin Hood, and every appraisal district in the state has a Sheriff of Nottingham. It’s good politics.
But it’s also meaningless. There are two significant problems hanging over this year’s property tax push. The first is the indisputable failure of last session’s property tax “relief” measures to make any meaningful difference. The state spent billions to nudge property taxes for an average household down by about a hundred bucks. In most metro areas, hardly anyone noticed because home values are increasing so much that property tax bills went up anyway.
The second problem has to do with just how fundamentally the state’s tax system is screwed up, which is the reason last session’s cuts didn’t make much of an impact. It’s simple: Over the last few decades, state government has quietly cut billions of dollars in funding to schools and local governments while they struggle to pay for the costs of a growing population. They’ve compensated with additional property tax revenue.
The fix is pretty easy, though: The state just needs to pony up more money for schools and services. But session to session, the Legislature doesn’t have much money to spare, in part because it keeps cutting taxes. So lawmakers like Bettencourt and Patrick have pioneered this sleight of hand: Blame local officials for property taxes, and pass useless bills to make it seem like the state is doing something.
Don’t just take it from this commie rag — take it from the Republican chairman of the House Ways and Means Committee, Dennis Bonnen. At the first meeting of his committee, Bonnen, a top ally of the Speaker, weighed in. “We’ve made multiple attempts as a Legislature to cut local property taxes that have not cut those property taxes but have, in almost every instance, just allowed them to rise less than they would have,” he said.
He went on. “If we truly want to lower that local taxpayer’s property tax bill, the clearest, most transparent, direct way is with the state putting more money into the school finance system.” All the attempts to restrict property taxes over the last decade, Bonnen said, had “failed.” They were for show, and not a very good show at that. It was mystifying, Bonnen said, that a tax revolt hadn’t come for the Legislature, pitchforks and torches in hand. There seemed to be a lack of awareness that lawmakers were to blame.
The subtext here is that House leadership has wanted to do something substantive about school finance for a while now, and was pushed into last session’s property tax cuts by Patrick and the Senate. The House wants to do something about school finance again this year, but it’s not a priority of Patrick’s. Tellingly, Bettencourt’s bill is a priority — its importance to Senate leadership is made clear by its low bill number. (SB 1 is the budget.)
SB 2 would significantly complicate the way local government works in Texas, potentially squeezing the budgets of police forces and other vital services. It’s opposed by a wide array of individuals and groups, including Fort Worth’s Republican mayor, Betsy Price. The Texas Municipal League, in a statement, called it “a direct assault on public safety.” But it’s also kind of a dog and pony show. Even the bill’s supporters must know that, to a certain extent. At its first hearing last week, Senator Royce West, D-Dallas, tried to raise the issue with Bettencourt. “Would you agree with me that if we really wanted to impact the tax bills of citizens,” West asked, “the state would do something about school property taxes?”
Yes, Bettencourt said, and the Legislature had done that. He pointed to last session’s property tax measures — which, as we’ve discussed, didn’t work and didn’t address the fundamental problem. West tried again. “If we were to do something as it relates to school finance,” he asked, “do you agree with me that it would have a significant impact on citizen’s tax bills?” Bettencourt said that was “obvious,” pointing again to last session’s tax bill. “If the Legislature did something like that again,” it would obviously work again.
It’s comfortable for lawmakers to stay in this narrow band of “solutions” when it comes to property taxes. Addressing the systemic issue is too hard — they’ll leave that to some future generation. But they need to do something, so they do small things, for which they’ll be forever declaring victory, despite all available evidence.