TEXAS HOUSE APPROVES PROPERTY TAX LEGISLATION, SETTING UP SENATE NEGOTIATIONS

  

The Texas House gave preliminary approval to property tax reform legislation designed to slow local property tax revenue growth.

More than 20 Democrats joined Republicans on the measure, who gave preliminary approval to Senate Bill 2 on a 107-40 margin. The bill got to the House after the Senate approved it 18-12.

Language was added by Representative Dustin Burrows (R-Lubbock) that made the passage of SB 2 contingent on House Bill 3. The premier school finance bill, HB 3 currently awaits action in the Senate.

SB 2, authored by Senator Paul Bettencourt (R-Houston), would require taxing entities with $15 million or more in combined property and sales tax revenues to get voter approval for property tax increases.

The version the House passed Tuesday has seen major changes from what was passed in the Senate. The latest version puts a 3.5 percent revenue cap on local governments, which means cities and counties can collect only up to 3.5 percent more in property tax revenue than they did the past year, unless voter approve the tax hike.  The original versions of the House and Senate bills had a 2.5 percent cap.

In addition, there will not be exemptions for rural and small districts, but exemptions will be in place for hospital and community college districts.

School districts are included under the cap, but only “symbolically”. The original versions of the bills included school districts under the 2.5 percent cap, but Burrows said the cap will need to be addressed in the separate school funding legislation.

Passage of this property tax reform depends on the passage of the House school funding bill, a $9 billion bill that increases funding for schools, gives teachers raises and changes how school districts receive money. The bill guarantees the property tax bill will not go into effect if the school funding bill does not pass.