Property owners in Ellis County have been paying $89 million more in taxes than they did just five years ago, according to the 2018 Ellis Appraisal District annual report. District 7 State Senator Paul Bettencourt is trying to slow that growth with a tax bill that would require an election if local taxing entities wanted to increase its revenue by more than the rollback revenue.
Senate Bill 2, which was passed by the Senate Property Tax Committee in February, would lower the rollback rate to 2.5 percent for any taxing entity that would collect more than $15 million in combined sales and property tax revenue. It would also trigger a rollback election that would take place in November.
The rollback rate is at eight percent under current law, and voters currently have to petition for an election as opposed to having one automatically triggered.
“If you adopt a rate that exceeds that rollback rate, it would be an automatic election,” Ellis Appraisal District chief appraiser Kathy Rodrigue said. “It’s not a petition anymore. If you want to adopt a rate that exceeds that rollback rate, then the governing body of the taxing unit would have to let their voters say ‘Yes – we’re willing to let you do that.’”
The bill also changes some of the terminologies of current tax law, including changing the “effective” rate to the “no-new revenue” rate and the “rollback” rate to the “voter-approved” rate.
“It doesn’t change the definition of it,” Rodrigue explained. “It just renames it. It makes more sense in the explanation.”
Another provision in the bill is the implementation of a real-time tax database that taxpayers can electronically access during budget periods. Rodrigue said under the proposed arrangement, property owners could look up their properties online and view how the proposed rates would impact them.
“Right now, if a property owner wants to involve themselves in the tax rate proposal, the entities post publications of their hearings process,” Rodrigue stated. “A property owner has to physically go to that hearing and ask to speak. They have an opportunity to get up and explain how they feel about the tax rate proposed.”
But with the incorporation of the online database, Rodrigue said, it makes it simpler for residents to be a voice in the tax rate-adoption process.
“It would make it so much more transparent,” she expressed. “As the entities propose their tax rates, a property owner will be able to go out to this portal, pull up their property, see the proposed tax rates on it, and it will give them a real-time estimate of what the taxing entities are trying to collect. This would make it so they can be involved in the process as much as they want to without necessarily going to a hearing.”
Critics of the bill previously stated the change could threaten certain funds in local taxing entities’ budget processes, such as hindering the ability to hire new police officers and firefighters, according to a Texas Tribune article.
However, a recent amendment to the bill prohibits entities from cutting funding for first responders; instead, forcing cuts from other areas of their budgets if needed.
State Representative John Wray is currently considering the Senate Bill’s House equivalent, H.B. 2, in the Ways and Means Committee. He said they held a 13-hour hearing on the bill last week, where people all over the state came to testify on the proposition.
“The conversation continues as we try to work out the details,” Wray remarked. “I am honored to be working directly with Chairman [Dustin] Burrows on the bill, and expect that whatever the final version ultimately is, will be good for Ellis County."
District 22 State Senator Brian Birdwell said both the house and senate bills had started the conversation for meaningful property tax reform and relief for Texas taxpayers.
He said he looks forward to where that conversation will go from here.
“Both bills, as proposed, will limit the unsustainable growth of property taxes on homeowners and increase the individual citizen's ability to control that growth in the future,” Birdwell remarked. “I am continuing to monitor the work of the Property Tax Committee and look forward to reviewing these final proposals before they come before me on the Senate floor."
Bettencourt expressed that he hopes this bill puts the control of taxing values back where it belongs – in the hands of the people.
“I’ve been arguing this for a year,” Bettencourt stated. “Texans are getting taxed out of their homes and businesses by ever-rising property taxes. What SB 2 does is slow the growth of revenues, and therefore, the growth of tax bills by lowering the amount that taxing units can take in every year without cutting their tax rates.”
Bettencourt said he expects at least a few more months of hearings before the bill could potentially be signed into law.