AUSTIN (Nexstar) — Gov. Greg Abbott signed into law Wednesday Senate Bill 2, legislation aimed at slowing the growth of Texans’ property tax bills. The bill was one of the top priorities for Texas lawmakers this legislative session.
Members of the Texas Legislature joined him for the bill signing ceremony at Wally’s Burger Express in Austin. The owner of Wally’s Burger Express said his property taxes are increasing by 44 percent this year and without Senate Bill 2, it would be difficult for his business to stay open.
“That’s an extra $8,000 we’re going to have to pay and that’s not all,” Robert Mayfield said. “From 2016 to the present, our taxes at Wally’s are up 80 percent. 80 percent.”
Senate Bill 2, led by Sen. Paul Bettencourt, R-Houston, and Rep. Dustin Burrows, R-Lubbock, requires taxing units to post their budgets and tax rates online. Taxpayers will also get a real-time notice about the breakdown.
“Right now, the property taxes are basically a black box,” Dale Craymer, president of the Texas Taxpayers and Research Association, said. “We get a bill, and we don’t really know what’s going to one district or another. What SB 2 provides is a real-time notice that I will see exactly how much property tax I’m being proposed to pay to each local jurisdiction in which I reside and will owe taxes to. It will tell me how much of an increase that is. It’ll give me a way to directly communicate with the board that’s going to adopt that tax increase, so I can tell him if I support it, if I’m opposed to it and what my concerns are.”
Under this bill, if city or county governments want to raise 3.5 percent more property tax revenue from the previous year, they must get voter approval. Senate Bill 2 will work together with House Bill 3, which was the school finance legislation Abbott signed into law Tuesday. That bill includes around $5 billion to buy down property tax rates.
“The law that we signed today does have transparency aspects to it that are transformative, that are very important, but it has something far more, something that has never been done before,” Abbott said. “It limits the ability of taxing authorities to come back in and raise property taxes and jack them back up. Without SB 2, it would lead to quick erosion of the property tax reduction that is contained in HB 3.”
Craymer points out that this bill is a relief against rising taxes and not the bills that Texans currently pay.
“[It] still allows for growth,” Craymer said. “So our tax bills are still going to be going up, but by no means are we likely to see the double-digit increases that we’ve been experiencing in years past.”
City and county leaders have expressed concern about the 3.5 percent limit, saying it would harm their overall budgets and long-term planning.
“The fact that it needs a yearly vote in order to pay for the cost of inflation means we’re not going to be able to enter into any long-term contracts like public safety because we can’t guarantee from year to year that we’d have an election that we would win,” Austin Mayor Steve Adler said.
The limit goes into effect next year. Round Rock Mayor Craig Morgan says in the meantime, local governments like his will need to thoroughly analyze their budget.
“I don’t think any government ought to be in the business of making money,” Morgan said. “However, even with the taxes being paid, you’re not really covering all the costs of service in those services that our citizens are demanding.”
But lawmakers say the point of the bill is to give taxpayers a voice and more control over what they want their money spent on.
“Each budget is unique so there are always places to trim and there are always those extra things you want to spend on,” Sen. Dawn Buckingham, R-Lakeway, said. “Just like in your household budget, right? The mayors need to look at those and the city councils, then go to the voters. If their arguments are legitimate, I think voters will say yes to that.”
Speaker of the House Dennis Bonnen, R-Angleton, said cities and counties should work to follow through with what’s laid out in Senate Bill 2.
“They have the tools available to get the revenues that they need, and they better use them,” Bonnen said. “They better not create other mechanisms so that we go back to a hidden, complicated process of taxing Texans.”