The Critical Bills: HB2/SB2, HB3, SB500, hopefully HB2915

March 15, 2019

Folks, these are the bills that will drive the fiscal train in the 86th Texas Legislature.  Make no mistake, this session will NOT be cutting back on spending; indeed it looks like- despite a large increase in revenue- the ‘will of the bodies’ is to spend even more. Some of us are calling this session ‘Christmastime for Education’- and the education lobby appetite is insatiable. Currently, there ARE plans to control the growth of property taxes and to give some SMALL relief on property taxes (on the order of 4-8%). but these amounts are small enough, even if tax growth IS controlled, will likely see you through only 2-3 years before your property taxes are right back where they were. There IS one bill that is a tax SWAP proposal that would substantially drop school property taxes (averaging $1400); BUT at a cost in more things covered under sales tax, some of which are significant. More on that bill (HB2915) later.
Let’s see what these key bills are and what their status is:

HB2/SB2

This is the bill to require that any overall property tax increase above 2.5% (whether through appraisal or rate) on existing property REQUIRES voter approval in the November elections. These twin bills have both been heard in committee and have had public testimony. SB2 had 15 amendments added, the most critical is to address the fact that the ‘Voter Approved Trigger’ in the original bill, only applies to government entities above $15 million in revenue. An amendment, added by Sen. Brandon Creighton that requires and ‘Opt-in’ election for those smaller entities in May of 2020. Rge House version of the identical bill with no amendments, had it’s committee hearing and, while nothing like Creighton’s amendment has yet to be added, things are being worked in the background to do something similar. Both committees (House Ways & Means under Rep. Burrows and The Senate Property Tax committee under Sen. Bettencourt) have done fine jobs with this bill that is essential to control tax growth, without which, any relief we may get will get swept away by the current ability to grow our property tax bill. But be warned, backroom shenanigans are ongoing. Talk of the Senate only having 15 votes of the 19 they need (rural GOP Senators berated into submission by county officials) and that anything that passes will be in the 4% range- and NOT include smaller entities, pretty useless to most property taxpayers to have a say in increases. If you’re a taxpayer advocate in a rural GOP senator’s district, get on the phone and let them know, you want a voter’s voice in a property tax increase above 2.5% in ANY government entity.

HB3

This bill is a done deal in terms of coming out of the House; it already has a bipartisan super-majority of co-authors. It’s $9.3 billion ‘extra’ spending: $6.3 for education and $2.7 billion for property tax relief.  The Education money has SOME direction to it’s usage, but it leaves a LOT of discretion to the administrators in implementing that direction. There is a component of it for administration managed merit pay incentives that the teacher groups l hate (and I expect it to be killed on the floor). The Education lobby wants it all based only on seniority, no matter how bad or good they are at their job.  The districts can also use the extra money to give raises to OTHER employees, from bus driver to- administration. The Senate came up with a straight $5,000 more per teacher or librarian but the complaint there was it ‘lacked flexibility for the districts to decide what is best’. I suggest you check you superintendents salaries today- and see where they are in 2 years. The Senate’s equivalent to HB3 is a incoherent assemble of a few bills with little detail; the House version will like drive this part.

There is ‘some property tax relief’ in SB3: a reduction of 4 to 8 cents per $100, depending how absurd your current overall rate is. On a $275K home with a $25K homestead exemption, that’s in the $100-$200 range. Easily negated with a single year’s appraisal growth not- or 2-3 years worth, if HB2 passes depending on the number assigned. For REAL relief, we need a number approaching or in the 4 digit range.

SB500

A 6 Billion Supplemental appropriation proposal that has passed the Senate unanimously. It takes $4 Billion from the Rainy Day Fund, then applies $3 billion of it- appropriately- to Harvey recovery efforts. But then uses over a billion of the reserve for ongoing expenses. Even with very LARGE increases in revenue for this biennium, they still feel the need to tap reserves? This broke the inflation + population growth ceiling in spending and got a negative rating by multiple fiscally conservative groups  Still got a unanimous vote; fiscal responsibility has been chucked out the window.   The House is pretty well set to do the same or worse with their supplemental ideas; and expect the conference committee not to help things back to fiscal sanity.

HB2915

This is the one bill here that does not yet have strong leadership support- but we need to promote it to see if we can get it. Again, it is not OVERALL relief but a taking some of the current overburden on the property taxpayer and spreads it to a larger base by expanding the sales tax to cover MANY items that currently are exempt, excluded or fall through loopholes.

The relief proposed? a 10 cent reduction in the school Maintenance & Operations piece, AND homestead exemption set to 50% of your house value (up to a reasonable level).  Plus some to allow a 100% commercial retail inventory exemption for business. The average homeowner would be saving $1400 of their property taxes- and that’s enough to let many keep their homes & younger buyers to invest in home ownership.
The amount of this relief? $6.3 billion (Which BTW: is about the amount the Comptroller reported at the beginning of this year as extra unanticipated revenue, on top of the revenue increases already forecasted. Leadership could have IMMEDIATELY allocated that directly to a relief package like this one, but then they could not have held a big Christmas-style binge for education. Trust me; it has been a real battle to keep a ‘kumbaya’ spirit with this stuff going on.)
The COST of the relief is, of course, the same.  So what is available to apply sales taxes on that currently don’t face them? A large number of items, enough to raise 3 times what is needed if you put it on everything. But they range from political suicide (basic foodstuffs; ‘You’re ripping food from the mouth of babes!’) to slam dunks (Comptroller is going to start collecting sales taxes on out-of-state online purchases, an amount not yet allocated anywhere). In discussion with the Author’s office Rep. Drew Springer, they did not want the full list posted yet, as it is a work in progress. But there ARE major items currently being considered that will initially make people cringe: gasoline, for example & utility bills.

But beauty of this approach is it is highly flexible to picking & choosing revenue sources and sizing the property tax benefit. For example, you could pull fuel from the sales tax poll (the biggest item) and eliminate the 10 cent reduction, but keep the 50% homestead exemption. It’s a highly workable approach for tuning though the process. A process we hope to get leadership to buy into and to advance the cause (Since they clearly are NOT going to ‘cancel Christmas’).  We could really use some grassroots advocates pitching this bill to their reps, asking them to sign on and/or get involved in the mix of things included.

Hopefully, this explanation, from the viewpoint on the ground who is in the thick of it as a volunteer taxpayer advocate. This all is a lot to digest and not sure every number is exactly right. But this is the layout of the battlefield. It ain’t pretty, but it is what it is.


Voter Integrity Bills- Good and Bad

February 27, 2019

A BUNCH of voter integrity bills have been filed this session: ones that strengthen integrity main by conservatives, ones that loosen it by Democrats.  So here are some of the key bills to track in this area:

GOOD

  • SB 953 (Fallon) – if a person marks themselves as a non-citizen to get out of jury duty and they are registered to vote, a letter is sent to ‘clarify’ (which law was broken)
  • HB 378 (Lang) – Verification of citizenship to vote, in cases where a driver’s license did not have citizenship verification.

BAD

  • HB 1104 (Meza) – Massively expands absentee ballot by mail. Mail-in ballots are subject of major fraud via ballot harvesting.
  • HB 526 (Israel) – Relax voter ID laws, using questionable documents & lessen penalties

Busy week for the Tx Lege 2/25

February 24, 2019

So many important bills and a LOT of grassroots people coming down (and we need as MANY as possible to come). Here is a listing of the more important ones for freedom and fiscal sanity.

2/25/2019    
E1.036 Senate Finance Committee 10:00am
SB 3 Teacher across the board $5K pay raise Nelson
     
2/26/2019    
E2.030 House Human Services Committee 8:00am
HB 285 Prohibiting removal of work requirements for receive supplemental nuitrition assistance Springer
     
2/27/2019    
JHR140 House Ways & Means Committee 8:00am
HB 2 Voter approval rate cap at 2.5% plus appraisal district review board & regulations Burrows
HB 705 Allowing counties to opt for additional sales tax, as opposed to additional property taxes. NOT a swap for EXISTING taxes. Geren
     
E2.016 House Homeland Security & Public Safety 8:00am
HB 238 Preventing federal arms restrictions from being implemented in Texas Krause
     
E2.014 House State Affairs Committee 10:30am
HB 234 Legalizing neighborhood lemonade stands Krause
HB 281 Prohibiting tax-funded lobbying Middleton
HB 433 Disclosure of govt money spend directly and indirectly on lobbying Shaheen

Lots of advocacy needed to combat the Professional Political Class this week.


RED ALERT! HB2 Hearing in Austin Wed. Feb 27th

February 22, 2019

UPDATE: This day is now a 2fer; HB281 (by Rep. Middleton) to end taxpayer-funded 3rd-party lobbying will be heard at 10:30am in State Affairs in E2.014
Time to saddle up & ride, property taxpayers!

UPDATE2: a 3fer, considering HB238 (by. Rep. Krause) challenging enforcement of federal regulation on guns & gun accessories in Texas. 8am in the Homeland Security & Public Safety committee in room E2.016

It is absolutely critical we get a BIG turnout of taxpayers to testify at this one. Many local government officials and the lobbyists they hired with YOUR money to work against you realized that they would not get far with the Senate Property Tax committee, so they didn’t put in the big effort there, But they WILL in the House Ways & Means committee; expect lots of shiny first responder uniforms to be present to claim HB2 will take cops of the streets & empty out firehouses. So we need an even BIGGER property taxpayer turnout at this meeting. We need people to bring WRITTEN testimony if they can; only 1-2 pages detailing their struggles with property tax growth- either in numbers or personal story. If they DO have written testimony, try to email it to the committee office by Tuesday am at paige.higerd_HC@house.texas.gov and let them kill the trees for you. Be sure your name and city are listed at the top, so they can locate it when you testify.

No this is NOT property tax RELIEF, except in a future sense. It is a mechanism to control the GROWTH of property taxes and to put voter in more direct control of that growth. It is ABSOLUTELY essential that this piece get great support, because the bills coming later with actual relief for property taxpayers would be meaningless, if the appraisal growth could be used to ‘swamp’ any specific property tax reduction in a couple of years. We need the grassroots there and knowledgeable in the issues at hand.

In the lists below, our ‘BEST friends’ are in bold; the others need various levels of ‘selling’. Democrats are italicized but don’t pass on ‘selling’ them as well. Cole & Rodriguez are from Travis county & their communities are being DECIMATED by rising property values & taxes.

Position House Ways & Means Committee Office Phone
Chair: Rep. Dustin Burrows E2.722 512-463-0542
Vice Chair: Rep. Ryan Guillen 1W.3 512-463-0416
Members: Rep. Dwayne Bohac GS.6 512-463-0727
Rep. Sheryl Cole E1.218 512-463-0506
Rep. Trey Martinez Fischer 3S.2 512-463-0616
Rep. Jim Murphy 4N.3 512-463-0514
Rep. Candy Noble E1.412 512-463-0186
Rep. Eddie Rodriguez 4S.5 512-463-0674
Rep. Scott Sanford E1.408 512-463-0356
Rep. Matt Shaheen E2.718 512-463-0594
Rep. John Wray E1.302 512-463-0516

A lot of folks may not have had to testify in the John Reagan building before. it is located to the NORTH of the capitol on the map below, Need to approach the main intrance from the GROUND level.  The tunnel in E1 requires a badge, apparently (My apologies for directing some folks that way earlier.


A conservative suggestion for a new source of tax revenue

February 14, 2019

The recommendation below is as an element for a ‘tax swap’ related to reducing local property taxes related to school M&O, NOT as more overall money for government.

Conservatives rarely come up with new taxes due to their belief in less government. But to generate relief in areas of overtaxation- such as the current Texas property tax situation- it sometimes is important to not only reduce taxation, but shift some of the burden onto untaxed sources. And there is no greater amount of untaxed revenue than the all-cash underground economy that, in large part, supports illegal immigrants. This untaxed income does however, surface to visibility in significant amounts in one place: wire money transfers.

Cash transfers from the U.S. represent the 2nd largest source of hard currency for Mexico- and the largest source of hard currency in several Central American countries. More importantly, a large share of this is from labor from illegal immigrants, many who are receiving cash-only payments for their labors to avoid federal income tax collection- and to avoid income declarations that would render their families here ineligible for government benefits. Some of that money gets sent home via wire transfers, primarily through services like MoneyGram and Western Union; 40% of all MoneyGram transfers go to Mexico, for example.

So, my recommendation is to look to apply taxation to these transfers, since much of it is vastly undertaxed in relation to other parts of the economy. The least that could be done would to remove the sales tax exemption from the wire transfer service fee, which runs anywhere from $4-$27 depending on the service and amount sent; it probably averages around $9-$10. Ideally, it would be limited to transfers to foreign destinations if possible; but it not, applying it to all transfers is acceptable. We’re talking an average of less than a dollar per transfer: hardly a large burden (nor a large source of revenue) but it would send an important initial message that could be followed up on.

Of far MORE significance, I also would suggest investigating application of a percentage fee on the amount sent by wire transfer, if possible. Even a 1-2% charge for every dollar sent would be a truly significant revenue source, if it can be accomplished legally and politically.

I make these recommendations at significant personal cost. I do direct aid to orphans and poor families in Uganda; a network of support outside the usual charitable organizations, mainly to benefit some who have either ‘aged’ out of the orphanages or their families. I do this by sending wire transfer to trusted people I’ve met over there and know well. I send over 50 transfers a year, totally $8,000-$9,000/year; since I don’t work through 501c3 anymore to do this, I do not get a charitable deduction on my tax return. My proposals would cost me out of my own pocket, but I support them and would testify effectively for them when needed.


Rural Property Owners becoming 2nd Class Citizens?

February 10, 2019

From some of the things that happened last session, they are already on the way to that status. SB2 & HB2 only will worsen this, if the total exemption of ‘small govt entities’ is left in place. Last session, they did precisely that in dealing with forced annexations, exempting smaller counties from protections for property owners. Other past bills have had similar ‘rural exemptions’, but few have dealt with what is more about basic property rights than ‘uniquely rural’ characteristics needed for governance. And the current SB2/HB2 bills worsen this schism by exempting all government units of revenues below $15 million from anything but the 8% rollback rate.

But WHY are these exceptions being created? Very simple; brutal politics. A number of rural representatives and Senators are less afraid of their voters than their County Sheriffs & County Judges- who hold far more political power than their counterparts do in urban areas.  And those county officials want NO changes that lessens their control. And, sadly, the legislators so controlled hold the numbers to prevent any bill from moving forward. Unfortunately, too few of the rural property owners know this is going on- or care. So the schism develops- or NO ONE moves forward. However, this time there IS push back- and that pushback needs to be strengthened. As much as we in the suburbs & cities want the rural property owners to have the same rights, the rural legislators will ignore us as non-constituents , it is up to the rural people to DEMAND their rights.

We need to pressure ‘political expediency’ back toward what is right. So we also need to pound another point into the collective GOP mind. The ONLY thing that saved the statewide GOP this last election WAS the rural areas.  And if they are so openly slighted by the GOP majority in the state legislature, what do think their mood will be about voting in November, 2020? I’m not thinking they would switch to the Democrats; but their TURNOUT might be depressed- and that could spell disaster. The State GOP MUST deliver property tax reform & relief to the rural voters.

One other area of concern: special-purpose districts.  These are often smaller entities and subject to much abuse; too few of them would be covered under the current bill’s $15 million level. They should be subject to the lower ‘voter approval rate’  if they are $1 million or larger.
If for no other reason, That I would think (if it’s legal), some larger entities might try creating special districts within themselves to break up some of the tax load  at a level to avoid the 2.5% voter approval rate limit. A special water district, a special street district, etc. Not sure if the rules of special districts would allow it, but someone more knowledgeable in them could comment below.  Either way, they should come under the lower voter approval rate to improve control of abuse.


SB2 Testimony and Progress

February 9, 2019

More information is now available on the bill: the Fiscal Note is here (The negative numbers represent potential savings from current property tax trends) and the analysis is here (fairly thick reading).

Public testimony went well for taxpayers on Feb. 6th and was enlightening to both the committee, people watching remotely and even to the opposition to the bill. Here is a list of the witnesses For and Against. you might want to search the list for the officials in your area, or friends you know are active in this effort.   And here is the full video of the public hearing, for review. The timestamp of the some of more interesting testimonies are listed below: Will add more as I review them:

Invited Testimony:

  • TPPF representative & Former Austin City Council member Ellen Troxclair in support of SB2: 1m 20s
  • Marya Crigler, chief Appraiser for Travis County: 16m 3s
  • Collin County Judge Chris Hill, representing unanimous support of the commissioner’s court for SB2: 1h 24m 12s

Public Testimony

  • Elizabeth Raich (sp?); chief financial officer of City of Dallas. Opposed and Sen. Bettencourt takes on her opposition: 1h 52m 35s
  • Michael Openshaw, author of this site, in support of SB2 (folks say I did pretty well, you can judge & post comments)): 1h 51m 26s

Please post in comments other timestamps of good testimonials- or really awful ones .