Gov. Greg Abbott, Lt. Gov. Dan Patrick and House Speaker Dennis Bonnen on April 10 released a joint statement promoting a twofold method for the 86th Texas Legislature to curb property tax increases across the state.
“Texans are fed up with skyrocketing property taxes. At the beginning of the legislative session, the governor, lieutenant governor and speaker laid out an agenda for property tax relief through the passage of Senate Bill 2 and House Bill 2 to limit property tax growth,” the state’s top officeholders said.
SB 2 and HB 2, the not-yet-approved property tax reform bills, would reduce the revenue growth increment used for determination of the rollback tax rate from 8.0 percent to 2.5 percent for taxing units other than small taxing units unless the voters in a small taxing unit election decide to opt-in to the proposed new voter-approved tax rate procedure. The goal of both pieces of legislation is to reduce tax revenues for local taxing units and increase costs to the state through revised formulas for education funding.
Abbott, Patrick and Bonnen also pushed lawmakers to pass legislation that would allow Texans to vote to offset local property tax revenue by increasing local sales taxes by a penny.
“We are introducing a sales tax proposal to buy down property tax rates for all Texas homeowners and businesses, once Senate Bill 2 or House Bill 2 is agreed to and passed by both chambers,” they said in the joint statement. “If the one-cent increase in the sales tax passes, it will result in billions of dollars in revenue to help drive down property taxes in the short and long term.”
Senate and House members of both political parties have expressed reluctance to cede local control in their districts to tax revenue-generating proposals coming from Austin. Another dimension is that a club-like Senate tradition requires at least three-fifths, or 19, of the body’s 31 members to agree to bring a measure to the floor for debate.
Patrick, who presides over the Senate, reportedly last week was entertaining the possibility of breaking with precedent by allowing the tax reform proposal to come to the floor with only 16 votes. There could be enough agreement among the body’s Republican members to fall in line with Patrick’s wishes.
As the possibility of property tax caps and a sales tax tradeoff simmers in the Senate, passage is harder to predict in the majority-Republican but not-so-collegial House. Differences in the House and Senate versions of the tax reform bill would have to be reconciled in a conference committee before returning to the full bodies for final approval.
Budget bill to conference
Lawmakers’ constitutionally mandated job is to pass a state budget. As always, it’s a messy process to do that.
House Bill 1, the state budget bill for fiscal years 2020 and 2021, was referred to a House-Senate conference committee on April 11 after the House refused to concur with Senate amendments to the bill.
Speaker Bonnen named as conferees House Appropriations Committee Chair John Zerwas, R-Richmond, and Reps. Greg Bonnen, R-Friendswood; Sarah Davis, R-West University Place; Oscar Longoria, D-Mission; and Armando Walle, D-Houston.
Senate conferees likely will be named by Lt. Gov. Patrick this week.
Sales tax holiday is set
Texas Comptroller Glenn Hegar on April 11 reminded Texans they may purchase certain items tax-free during the state’s sales tax holiday for emergency preparation supplies. The sales tax holiday is scheduled for April 27-29.
“While we can’t know in advance when the next flood, tornado or hurricane may strike, we can make sure our families, homes and businesses have the supplies they need to face these and other emergencies,” Hegar said.
Items covered by the tax holiday include, for example:
– Household batteries, fuel containers and flashlights priced at less than $75;
– Hurricane shutters and emergency ladders priced at less than $300; and
– Portable generators priced at less than $3,000.
Tax revenue is distributed
Comptroller Hegar on April 10 announced his agency would send cities, counties, transit systems and special purpose taxing districts $705.3 million in local sales tax allocations for April.
The amount is 8.4 percent more than distributed for the month of April 2018. The allocations are based on sales made in February by businesses that report tax monthly.
By Ed Sterling • Member Services Director for the Texas Press Association