Controversy surrounding a bill that could limit governmental entities’ ability to raise property tax rates will continue as the Texas legislative special session begins this month.
Much of the consternation stems from Senate Bill (SB) 2, authored by State Sen. Paul Betancourt (R-Houston). The bill, which died before the end of the regular session in May, would require entities such as city, county governments and emergency service districts (ESDs) to hold an election if they plan to raise property tax rates by five percent.
However, Texas Gov. Greg Abbott in June resurrected SB2 as one of 20 “sunset” items to be taken up during a special session, which is slated to begin Tuesday.
According to a March Texas Tribune report, Betancourt argued the bill is meant to curb rising property tax bills seen by homeowners over the last few years. Betancourt claimed commercial property owners have seen 15 to 20 percent property tax increases, according to the Tribune’s report.
But the bill is a cause for concern for various city and county leaders who fear the measure could hamper how Hays County grows in the future.
Kyle Taylor, Kyle Fire Department Chief, said the bill could hamper growth within ESDs, which by law cannot raise taxes beyond ten cents per $100 valuation.
Over the last few years, Taylor said KFD has raised its property tax rate by 12 percent annually since 2013. The increases have gone toward improving staffing for the department.
Increasing the staff size is meant to offset the rapid rise in calls for service. Kyle’s fire department has seen a 65 percent rise in calls for service between 2013 and 2016. The department is on pace to respond to over 4,500 calls for service.
Should SB2 pass, Taylor said it could hamper the department’s chances of opening two new fire stations over the next few years to meet the city’s growth.
“For us to go down to five percent (increases) and meet the growth, it’s going to be tough for us,” Taylor said.
Buda Mayor Todd Ruge said there could be some “unwanted consequences” that arise from the bill.
SB2 could stunt a municipality from providing basic services, such as providing infrastructure, Ruge said. While the economy is healthy now, Ruge fears another recession with the proposed bill in place could leave people “in a world of hurt.”
“We take an oath to provide basic services to citizens and this could cripple our ability to do so,” Ruge said. “Not only us, but any city in the state.”
Kyle Mayor Todd Webster said the bill has created instability for the city, which is in the midst of the fiscal year 2018 budget discussions.
He said the plan was to possibly eye a tax rate reduction this next fiscal year. However, due to SB2, he said the city might focus on keeping the rate stable.
Webster believes the state has contributed to the rising tax rate issue in Texas. He said state leaders’ focus to shift infrastructure responsibility, primarily roads and highways, to the tax payers led cities to increase property tax rates to accommodate.
If the bill passes, Webster said growing cities such as Kyle may look to other methods of funding, including Tax Increment Reinvestment Zones (TIRZ).
“If you want good stuff and nice infrastructure, particularly things like good state roads that require local participation, you’ve got to couple that with a higher tax rate,” Webster said. “Now you’ve got high property tax rates that municipalities and counties are being blamed for it.”
So what are the property tax rates in our local municipalities?
Tax rates are for every $100 valuation.
Fiscal year 2017
- Kyle: .5748
- Buda: .3704
- ESD 5 (Kyle Fire Department): .1000
- ESD 8 (Buda Fire Department): .1000
- Dripping Springs: .1700
- ESD 6 (North Hays County Fire Rescue): .0795
Fiscal year 2013
- Kyle: .5244
- Buda: .2713
- ESD 5: .1000
- ESD 8: .1000
- Dripping Springs: .1300
- ESD 6: .0795