The last time Ellis County had a rollback election, jobs were lost, tax offices closed and taxpayers gained little from their refunds. County treasurer Cheryl Chambers is concerned the same circumstance could repeat if Senate Bill 2 passes the 86th Texas Legislature this summer.
SB 2, which is authored by District 7 State Senator Paul Bettencourt, would lower the rollback rate to 2.5 percent and would automatically trigger an election if taxing entities wanted to increase its revenue by higher than the rollback revenue.
“Texans are getting taxed out of their homes and businesses by ever-rising property taxes,” Bettencourt stated in a previous story. “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.”
Proponents of the bill, such as Ellis Appraisal District chief appraiser Kathy Rodrigue, said it makes it simpler for residents to be a voice in the tax rate-adoption process, and it puts the decision deeper into voters’ hands.
“It would make it so much more transparent,” Rodrigue previously stated. “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.’”
However, those on the county side are less enthusiastic about the bill than others are. Chambers, for instance, argues that taxpayers already have a voice in the tax rate-adoption process with public hearings and the county commissioners who currently sit on the court.
“If our county commissioners’ court raises taxes, and the citizens did not agree, then it’s up to the local people to vote them out of office,” Chambers stated. “You can always call a commissioner, county judge, send an email, write a letter and speak against that. You have a voice to keep that from happening, and you’ve got a voice at the polls.”
County Auditor Miykael Reeve said putting in a 2.5 percent cap would not have a profound impact on the county’s finances. She stated that the county’s direct rate has not increased or decreased over that percent over the past 10 years.
According to county records, the last time the tax rate was increased was in 2011, when the rate was increased by two cents from $0.3936 to $0.4136.
The rate was maintained for six years until 2018 when the commissioners’ court voted to reduce the tax rate to $0.3932.
“We’re always known to conservatively budget,” Reeve expressed. “We’ve always managed to stay under budget. And at the end of the year, we have always rolled that money into the fund balance.”
However, Reeve expresses that the reason why the commissioners’ court has maintained and even decreased the current rate is because of the county’s increased property valuation. According to county records, the total assessed valuation has increased by six billion dollars in the past 10 years, from $13,086,440,707 in 2009 to $19,321,690,740 in 2018.
She explained that the valuation has increased so much because new residents keep moving into the county and investing in their economy. By driving those numbers upwards, it provides the county with the financial flexibility and freedom to make those decisions – such as lowering the tax rate.
If, however, that growth stops or, in a worst-case scenario, goes the other way, a 2.5 percent rollback restriction could be potentially troubling for the county. If that happens, Reeve explained that county services would not be able to increase its services to keep up with population growth, since salaries are the county’s largest expenditures.
“Everything we do in the county is a service to our citizens,” Reeve stated. “The sheriff when they go out and respond, that’s a service. The district court is a service. When you come in and get birth certificates from the county clerk, that’s a service. Everything we do as a county is a service to the citizens. If we don’t have money to fund salaries, the constable's office, J.P.’s office, we can’t serve. That’s simply how it is.”
“I’m hoping that it does not pass,” she remarked. “If we don’t have that flexibility, you’re going to see us start cutting services.”
Chambers echoed a similar sentiment, saying that the last rollback election cost everyone a little bit.
“People lost their jobs,” Chambers recalled. “The commissioners’ court decided to close the Midlothian, Ennis and Red Oak tax offices. They had to send out all of those checks to refund people’s taxes. And those rollback checks? They were for cents and dollars.”
“I think it cost people more money to roll taxes back than what they saved,” she expressed. “It was not a good time for anyone.”
If S.B. 2 passes, Chambers said the first jobs to be cut could be part-time positions – and after that, potentially many more.
“Anybody could go through the budget and find ways to cut,” she stated. “Could we all tighten our belt? Of course we could. I just don’t see county government being wasteful. I certainly couldn’t get my job done with one staff person. I barely get it done with two staff people. It isn’t like my department has employees that they don’t need.”
According to the Texas Legislation website, S.B. 2 is currently out of committee and is waiting on a vote by the house of representatives. Chambers stated that decisions on the tax rate should be decided by those who work and live in the county – not by the state.
“I’m a taxpayer too,” she stated. I don’t want my taxes to go up. But Ellis County is growing very fast. This bill limits keeping up with that growth, to some extent.”
"It is about local control and our local elected officials making the best decisions for Ellis County," Chambers expressed. "Not politicians in Austin."