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Texas Property Tax Debate Illustrates How State Government Pressures Municipalities

Texas Governor Greg Abbott is running for re-election in a few weeks and a lot of the information and news coming out of the governor’s office is geared to ensure a successful campaign. The governor released his legislative blueprint on his campaign page which he has labeled the “Texas Bicentennial Blueprint,” and similar content can be found in the 2018 “Governor’s Report to the People,” found on the official State of Texas, Office of the Governor website.

The “Initiatives” webpage is subtitled “Preserving Liberty” and it states: “The federal government should fulfill important but limited responsibilities as enumerated in the Constitution. On everything else, Texans should govern Texas.” Extending that logic, Texans in Texas cities should govern their Texas residents, but that has not been the case of late.

The overriding theme underlying new 2017 legislation from the 85th Texas legislature is that municipalities in Texas and municipal government have created an “unworkable patchwork” of regulations and ordinances, and thus state law must preempt local. Preemption is a topic I have written about previously. The governor, the state politicians, the Texas Attorney General and the judges in Texas courts all use the “patchwork” phrase repeatedly to justify preempting local government decisions and acts, particularly regarding plastic bag bans in cities, driving and texting city ordinances, red light cameras, and paid sick leave.

If involved or interested in Texas city government you may have read the 34-page plan explaining the proposed “Tax Reform Rollout” that reflects Abbott’s support to cap revenue increases for local taxing entities at 2.5 percent a year. Prior to the Republican primary this year, there was talk in Austin regarding capping at a higher percent. During the 2017 legislative session, a proposal along these lines was unsuccessful due mostly to the objection of local governments statewide.

Property taxes are the leading source of city revenue. Texas cities have historically received something equally if not more important from the state, authority to govern themselves, including the authority to raise their own revenue. City property taxes are key to city budgets yet make up just a fraction of a property owner’s total property tax bill. In cities across Texas, property tax revenue creates the necessary funds to pay for the municipal items that benefit their residents such as streets, highways, libraries, police, fire/EMS, parks, etc. These items are necessities.

There are those that contend the State government not only prompts but implements local governments to raise property taxes by raising costs cities have to pay the State. Similar to the 34-page missive on tax reform, an interesting alternative view written by the Democratic candidate for Lt. Governor, Mike Collier, is titled “The Great Texas Property Tax Swindle.” The State of Texas Budget was recently adopted and it includes this: “Property values and the estimate of local tax collections on which they are based shall be increased by 7.04% in tax year 2017 and 6.77% in tax year 2018.” The state is instrumental in what happens locally regarding property taxes.

The governor’s tagline of “less government, lower taxes, smarter regulation” really means less federal and municipal self-governance in Texas and more laws initiated, drafted, and enforced by the state legislature requiring alignment with the governor’s initiatives and approval.

The Texas Legislature reconvenes on Tuesday, January 8, 2019. Discussion and lobbying activity in Texas cities and counties is in full swing, already considering local municipal issues that will be considered by the 86th Texas Legislature. As stated on the state website: “Voters deserve to know if we are working for ourselves or the people who elected us.” We voters have the responsibility to choose those elected officials working for us and make sure they act in the best interest of all Texans.

Please do not rely on this article as legal advice. We can tell you what the law is, but until we know the facts of your given situation, we cannot provide legal guidance. This website is for informational purposes and not for the purposes of providing legal advice. Information about our municipal law practice can be found here.

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