THE BILLS

HB 1006—Truth in taxation

To produce a real and lasting property tax cut for the people of Texas, we must not only lower rates; we must provide taxpayer protections that put voters in control.

Truth in taxation ensures greater accountability to the people. Instead of being stuck in the passenger's seat, taxpayers will finally have their foot on the brake when government grows too fast.

The bill, which passed the House on April 26, provides that when a local taxing jurisdiction’s tax revenue exceeds the previous year's tax revenue by 5% (minus new growth and construction), a petition election to approve the tax rate may be called by collecting signatures of 10% of voters based on the last gubernatorial election. If citizens do not gather enough signatures for the petition election or do not circulate a petition, the new tax rate can be enacted.

For example, if local officials propose a tax rate that will raise more than 5% in revenue than last year’s tax rate, the city could be required by petition of the voters to hold an election to ratify the new tax rate.

HB 1006 is government for the people, by the people, and accountable to the people.

• Under this truth in taxation proposal, every new dime raised and spent by local government will require a public vote that is properly labeled a tax increase. Today, they can raise 5% more and not follow truth in taxation guidelines.
• Instead of relying on the local revenueappraiser to fund government spending increases, local officials will actually have to vote to raise your taxes. Plain and simple, that’s good government.

On a public vote of the people:

• If government won’t trust the people, then why should the people trust government!
• Today’s law allows local governments to raise up to 8% more from property taxes without even allowing the people to have a say. It can happen even without a vote by local officials to raise taxes if appraisals increase enough. And even when they do raise revenues by 8% or more, the mountain taxpayers must climb to get a rollback election can be so onerous, you might as well be climbing Everest.
• If we are going to have rollback elections that require petitions, let’s make the goal a little more achievable, so people have a chance in cities like Dallas, Fort Worth and San Antonio.

Answering objections
School districts are the problem, not counties and cities. Why are we punishing those who contribute least to the problem?

School districts are addressed separately in the law. The fact is that city and county taxes have grown quite a bit despite critics’ claims to the contrary. From 1998 to 2003, city tax levies increased by 47% and county levies increased by 46%. Many are living off of large appraisal increases that allow them to raise your tax bill without so much as a vote.

You will choke off local government’s ability to pay for needed services.

First of all, they will be able to spend every dime they spend today and more. The difference is that they will have to vote publicly as a governing body if they increase your tax bills. And if they increase it by a large enough amount, their tax hike could be subject to voter approval. If they can justify large spending increases, then voters will support it, just as they traditionally have with school bond elections.

1998-2002 City tax data
Total increase in property tax levy

• Plano 47%
• Amarillo 45%
• Dallas 43%
• Fort Worth 39%
• Austin 39%
• Garland 35%
• San Antonio 33%
• Arlington 32%
• Corpus Christi 19%
• Odessa 17%
• San Angelo 15%
• Midland 8%

Why don’t you subject state government and state spending to the same requirements?

There is no doubt that when the economy grows, revenues to state government increase. But there is a fundamental difference: we don’t collect property taxes on the state level, and the property tax is a unique tax because not only is the rate set by government; so is the price. With sales tax, we set the rate, but the private sector decides the price of goods. With a property tax, the government sets the rate AND sets the value, or the price, of the house.

We haven’t increased state taxes for a number of years. To the extent that revenues have grown, that has tracked the economy. Furthermore, we spent less in state general revenue last session. We’re also doing a better job of drawing down federal dollars for programs the federal government often require us to offer. Much of our increase is in federal funds.