The Senate Select Committee on Property Tax Reform met Nov. 28 at Lone Star College Montgomery in Conroe to evaluate the effective tax rate and rollback tax rate calculation, evaluate the operations of appraisal review boards (ARBs) and study the feasibility of replacing the property tax with a sales tax or other consumption tax revenue, with emphasis on the school maintenance and operations tax.
During public testimony on the effective tax rate and rollback tax rate calculation, the committee heard from several local elected officials who testified about their respective communities. One city officer testified taxpayers have received new and better roads from revenue while another said tax abatements have brought in an H-E-B to that community.
During the discussion of lowering rollback tax rates, one official mentioned lowering the existing 8 percent rollback rate to 4 percent or lower takes away the flexibility to serve the taxpayers in his city. One commissioner from a high growth county testified that limited resources present challenges but tax dollars belong to the people.
Chair Bettencourt responded by saying that the proposed 4 percent lower rollback rate would not keep a local jurisdiction from raising revenue needed to provide services. Other senate committee members added that any items requiring raising revenue, such as new or improved roads, should be put before voters at a November election as well as a local entity’s rollback tax rate. The chair also added that his legislative proposal would include a disaster portion that addresses any issues with cities or counties losing tax base or property value due to a disaster.
On the second charge, testimony was heard regarding the state’s requirement that appraisal notices include an “estimate of tax due” and how that notice can be confusing. The Constitution requires taxpayers be provided with this estimate if the total amount of property taxes for the (political) subdivision were not increased.
Tax experts present told the committee technology could give real-time tax rate notices electronically as local governments propose rates. In a previous select committee hearing a few months ago, testimony was given about the Travis County Appraisal District’s website and its real time information. It was referred to as a model for legislation going forward.
During testimony on replacing property tax with other revenue, it was noted that while there is much discussion on having a sales tax swap, and both political sides have said property tax relief is a priority, there hasn’t been a legislative idea yet that details how to accomplish such an undertaking. The 86th legislative session begins Jan. 8, 2019.