January 19, 2019
Here they are and it’s full of good news!
The new Property Tax committee is full of the most conservative members of the Senate, with Hinojosa being the lone Democrat:
Senate Property Tax Committee
Paul Bettencourt, Chair CAP 3E.16 (512)463-0107 EMAIL
Angela Paxton, Vice Chair CAP GE.5 (512)463-0108 EMAIL
Brandon Creighton EXT E1.606 (512)463-0104 EMAIL
Kelly Hancock CAP 4E.2 (512)463-0109 EMAIL
Juan “Chuy” Hinojosa CAP 3E.6 (512)463-0120 EMAIL
Sen. Jan Nelson was, as expected, was named Chair of Finance. Within 3 hours, she’s already scheduled 18 meetings of that committee; nearly every day starting Jan. 22nd. She is VERY serious that education finance reform won’t fail for lack of effort! We plan to try to testify the first week there to address the need to make room in budgeting, as they try to redo education funding, for some property tax relief (especially In Robin Hood which will literally crush a handful of ‘wealthy’ districts before next session meets). This committee will ALSO need to be reminded how much property owners are hurting.
The one bit of controversy? Sen Kel Seliger was mad Agriculture Chair and taken off as Higher Education Chair and replaced with Sen Brandon Creighton, a far more conservative member. Seliger feel dissed & disrespected. Lt. Gov. Dan Patrick shrugged it off, pointing out that Agriculture is a big part of Seliger’s panhandle/ west Texas district. ,
January 17, 2019
Here’s a link to the nearly 1,000 pages of SB1;
track the progress & later amendments here.
Sen. Jane Nelson is the author & will assuredly be the Chair of the committee to handle it. It has A $5,000/teacher raise built in (average 9.4%) yet spends $3 billion less than house proposal WIll update this with other factors as they are clarified by far greater financial wizards than are here. Naturally, we’re MOST interested in any property tax relief that is factored in, if any. We haven’t heard of anything specific.
Sen. Jan Nelson has the Teacher raise as a SEPARATE bill- SB 3- linked here.
The Legislative Budget Board proposed Budget Summary is here. Being Straus was a major driver of this, I take it’s content as this with a LARGE grain of salt.
Here is a good comparison of the House & Senate budgets to the Texas Public Policy Foundation’s ‘Conservative Budget’. The good news is that the amounts are not HUGELY off (though- when talking in billions- they are ALL huge.). The question truly is- how much property tax relief will we get- and in what form. It is NOT defined as off yet in EITHER budget. .
January 15, 2019
So, we definitely need property tax relief; but what form could such relief take, which ones are the most bang for the buck, which ones are politically possible, and how would they make it up to the entities that lose revenue?
First, it has to be understood the different between property tax relief and various types of actual tax CUTS. Our most serious problem has been the rapid GROWTH of taxes we have to pay, primarily through skyrocketing appraisal growth. In 2015, we received a one-time tax ‘cut’; in the form of an increase in homestead exemption from $10,000 to $25,000. That ‘cut’ was immediately swamped out by the next year’s appraisal growth (but STILL meant the tax growth was $100-$150 less than it would have been otherwise.) And it was no help to commercial and multi-family properties. So a fixed-amount, one-time cut is of little long-term benefit.
So, what are better, more enduring approaches?
- Eliminate Property Taxes altogether! Yeah, OK; I’d like everybody to have a pony, too. But it ain’t happening, and certainly not in one legislative session. It’s the only revenue source of sufficient size & stability to cover city & county needs like streets, fire, police, courts, jails, etc. The state of Texas would have to make massive statute changes to even ATTEMPT this. However, the stat DOES have shared responsibility for the LARGEST portion of our property taxes- that portion for school systems. Indeed, the state has a Constitutional REQUIREMENT to provide for ‘an adequate education’.
- Eliminate ALL local school taxes! Uhh, really can’t do that. Remember all those school bonds your community voted for to pay for capital items? Well, sorry; your district is stuck paying for that since you signed off to doing so. So that leaves the Maintenance & Operations of the school taxes. That STILL represents about HALF of the entire property tax bill of most homeowners. So THAT is the logical ‘area of attack’ for the state of Texas to help the homeowners actually keep their homes.
- The state should pick up as much of the school M&O as possible. This is the plausible goal of this session of IMMEDIATE tax relief. The only reason any immediate relief could happen is that Comptroller Hegar, just a couple weeks ago, announced an additional $6 billion in oil-related revenue will be available to the state. That is the equivalent to throwing a chuck roast at a pack of hungry dobermans in a session, but possibly property taxpayers could get a piece of that in a swap with public education. That will be a hard fight & the relief might be minor if spread across ALL property owners. There are other approaches to using this listed below.
- The state would further restrict tax growth rate without getting voter approval. This gives no IMMEDIATE relief but will- long term- do more to protect property owners from tax inflation driving them from homes. This is Gov. Abbott’s suggested approach, recommending setting it at 2.5%. instead of the current 8% (plus ‘growth’) that number will likely be going up in negotiation.
- The state could give homeowner only relief via indexed homestead exemption. By giving a MAJOR increase to homestead exemption AND indexing it as a percentage of the appraised value (say 20-25%) would assure CONTINUED benefit to homeowners. It would be important to REQUIRE the use of the homestead exemption for ISDs receiving compensating state money.
- The state could give relief to the most at-risk property owners first. The most at-risk people of not being able to keep their homes- are retirees, who are on fixed incomes. Many have their tax rates frozen but may no be protected from appraisal growth. And it is rather ridiculous that a government service- education- that they haven’t made use of for their family for over 15 years is what is going to drive them from their home. One way that the state could help prevent that is to come up with a retiree specific homestead exemption, one tied to a percentage of their appraised value(say 40-50%), so it increases as the appraisal does. This would significantly reduce the school portion of their tax. But this would be a SELECTIVE benefit, not benefiting ALL property owners.
- The state could eliminate or substantially reduce Robin Hood. This would benefit those taxpayers being ‘bled’ far worse that all others; those in wealthy districts where nearly $2.7 BILLION this year alone will be taken from them, supposedly to benefit ‘property-poor’ districts, but most of the funds actually end up in General Revenue. And, as of late the increases in the amount taken from these ‘wealthy districts is INSANE, for example, the amount has DOUBLED for Plano for $103 million to $209 million in 2 years! Here is a link to a spreadsheet of the amounts the districts must give up. However, any elimination or serious reduction of Robin Hood should be iron-clad conditional that the MAJORITY of the reduction needs to be given back to taxpayers with a reduced tax rate. It can’t spark a giant spending binge by the wealthy districts (though SOME should go back to the districts).
- Lastly, an insane but logical consideration; treat property like every other asset. If property were treated like every other investment and asset, it would be taxed at the purchase price until you sell the asset, at which time you might be taxed on the capital gains (but then you’d have the money to PAY the tax), The impact of this would be profound; Appraisal districts would no longer factor into the taxing equation. Government entities would only get gains (through a ‘property tax capital gain’) upon the sale of property. A lot of property ‘churn’ would disappear, impacting the real estate industry. I can’t think of a change in property taxation that would get more people in an uproar- but would help property ownership more (other than elimination property taxes altogether).
So, there are a number of approaches. We homeowners are up against an insatiable appetite for our money from local government entities. we ALL need to be in the fight for this one. Or give up ever actually controlling our own property’s destiny.
January 9, 2019
Day 1 was pretty uneventful. Everyone sworn in, Dennis Bonnen elected by a 147-0 recorded vote as Texas House Speaker (By recorded vote, called for by Jonathan Stickland- so everyone has PROOF of the unanimous nature. 3 seats open- all Democrat. I retired for health reasons, 2 given up after election elsewhere.)
The Rules vote is tomorrow and we’ve heard nothing overly contentious coming up there. Rest of the week will be settling in.
Here is an absolutely critical article to read for advocates.
The critical dates of the Texas Legislature:
– March 8th; House bills MUST be filed. (Some rare exceptions )
– April 25th: bills MUST be out of House committee.
– May 9th: all bills not voted forward from the House are dead.
Read the whole thing; there WILL be a test afterward. 😉
January 7, 2019
Well, the 86th Texas Legislative Session starts this Tuesday. The GOP lost some numbers but still has full control And, with new leadership provided by Dennis Bonnen, there is actually MORE hope for a productive session than the last one. What will be our top priorities?
- Property tax REFORM that leads to FAR slower growth: This is different than a ‘tax cut’. A cut is a single-point of impact; it can quickly overrun by effective tax rate growth in just a couple year. We had a small case of that 2 sessions ago via the increase in homestead exemption- that was immediately swamped by appraisal growth.
- Public education refinancing to put Robin Hood on the path of elimination: Austin gives up $500 million/yr, Plano $209 million/ yr. to other districts- and has no say in HOW those funds are used. Including, in one case, both building & maintaining a school water park. State funds must DIRECTLY be provided the needy districts- with ASSURANCES it is spent on CLASSROOM needs.Fully elimination of Robin Hood in 1-2 years is likely not fiscally possible but it should be doable in 3-6 years.
- Vote Integrity, especially elimination of dual votes & non-citizen voting. First, they need to permit matching of court summons reply claiming non-citizen status to voting records, Then they need to permit matching of folks with multiple addresses (like college students) and check for voting in multiple locations. State-run University residence records should be made available, for example, as should voting at residences where the owners do NOT claim homestead exemptions.
- Increasing E-Verification usage & keeping citizenship designation on driver licenses: Every effort should be made to assure that money that the state has control over does NOT go to employ illegal aliens. That include SUB-contracted labor. Every state site should have EVERYONE drawing pay be E-Verified.
- Franchise Tax on direct path elimination, emphasizing small businesses first: this tax has high compliance costs on businesses and needs to be eliminated over the next 3-4 years.
December 29, 2018
The circus called the Texas Legislature comes to Austin in a few days & will run for at least 5 months. What can people expect? A pretty different environment than for the last couple
- The new Speaker of the Texas House Dennis Bonnen will mean different House Leadership. Many of the moves Rep. Bonnen has made so far have been positive ones to reduce backroom & lobbyist control of the House that predominated the Straus tenure. But, once the heat comes, we’ll see how that holds up. Dennis is a man of strong will & opinion. which will most assuredly prove to be both a feature AND a bug in his Speakership. Bus, as someone whose first introduction to Dennis was having him try to verbally beat my views on tax relief into submission for 20 minutes when I spoke before his committee, I actually have hope that he’ll be a far better Speaker than Straus.
- A New speaker means new Committee Chairs- ones that will NOT have to ‘kiss the ring of Democrat lobbyist Gordon Johnson to get the position, as they did with Straus. Also, a number of ‘problems’ retired- most notably Byron Cook. There is great hope that Rep. Bonnen will be far faster in getting Chairs in place to get to work. Last session, Straus took 35 days; hopefully, Bonnen will take less than half that time.
- The election left us with 12 less GOP Texas House members and 1 less GOP Senator. The GOP still holds solid majorities, but not as solid. The practical impact of that is an expectation that the most controversial fights will be less likely to occur. Frankly, there is little taste for revisiting the ‘bathroom bill’ kerfuffle, except those that live to gen up division. More critical issues of education funding reorganization and property tax reform will be the main focus. The Dems will push hard on a number of issues, most involving lots more spending.
- The Senate will be slightly less conservative with the loss of Konnie Burton & Don Huffines, with the addition of Pete Flores. However, with Bonnen’s public commitment to try to work with the Senate and the initial unity of the GOP Caucus- something we have NOT had for many sessions- there are opportunities for conservative advancement.
- But one thing is constant. There are large & powerful forces in the Professional Political Class that got that way by fostering division & discord and will try to undo ANY attempts at unity. Dennis Bonnen has been at this long enough, I’m sure he is aware of this & hopefully he’ll fight those forces to some degree.
- We’ll see how it all comes together. We’ll be reporting as much blow by blow as we can manage. Stay tuned.