Revenue Caps

Lowering the current 8% revenue cap (rollback rate) — limiting increases in a county’s overall property tax levy — will restrict counties' ability to provide the efficient and effective government services taxpayers demand.

Lower revenue caps are a one-size-fits-all approach based on the faulty assumption that the need for services is steady from year to year. Local revenue needs often spike above or below proposed revenue limits. These spikes are caused by numerous factors like local growth spurts, declining local or regional economies, receipts of — or reduction in — federal grants, new or modified state and federal mandates, and natural disasters or homeland security breaches.

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Key Points

  • A lower cap attempts a one-size-fits-all solution for counties. This does not work. Commissioners courts—the locally elected governmental bodies—are in the best position to determine the right policy decisions for a county.
  •  A lower cap does not address uncontrollable cost-drivers that affect counties, like unfunded mandates, emergencies and a growth in the demand for services.
  • A lower cap hurts the ability of commissioners courts to spur economic development by diminishing the flexibility to provide economic incentives. The reputation of Texas as the “#1 State to Do Business” depends on the infrastructure built by Texas local government. 
  • A lower cap negatively impacts the fiscal health of counties, resulting in a lower bond rating that ends up costing taxpayers more money.
  • A lower cap does not address the problems caused by a broken appraisal system that causes costly lawsuits and unfairly favors commercial properties at the expense of residential homeowners and small business owners.

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