With Amendment, Bettencourt Aims to Limit Property Tax Growth

State Sen. Paul Bettencourt, R-Houston, has been trying for months to pass legislation that would make it tougher for local entities to bring in more tax revenue by taking advantage of rising property values.

On Thursday, he managed to add language to a bill from state Sen. Brandon Creighton, R-Conroe, that could do just that, though not as severely as many local officials had feared.

Creighton’s bill, Senate Bill 1760, aims to make the administration of local property taxes more transparent with provisions such as directing the comptroller to publish a ranking of property tax rates statewide and requiring local entities to justify future tax increases on election notices and ballots.

Under Bettencourt’s amendment, 60 percent of the members of a city, county, school district or other local entity's governing body would have to approve a property tax rate that brings in more revenue from existing homes and businesses than was collected in the previous year — a metric known as “the effective tax rate.” Currently, approval of a simple majority of a local governing board is all that is needed.

The Senate passed the amendment 24-7.

“The taxpayers are crying for relief, and the Senate has just made it clear to local taxing jurisdictions they have to have a supermajority to raise property taxes, even more than last year's values would let them,” Bettencourt said after the vote. “For economic conservatives, this is about as exciting a day as you can get.”

Bettencourt filed a so-called revenue cap bill this session that would have required cities and counties to get voter permission before enacting an increase in the effective tax rate of more than 6 percent. Currently, citizens can petition for a county or city to hold an election to roll back property tax rates if the effective rate rises by 8 percent or more from one year to the next. At a Senate Finance Committee hearing this month, officials with cities and counties decried the proposal as government micromanaging. Bettencourt said he wasn't sure if the bill would get voted out of committee this session, though he expressed hope that elements of it might end up in other bills.

The Texas Municipal League, which counts more than 1,000 Texas cities among its members, first heard rumors about Bettencourt’s amendment Thursday morning, and began lobbying senators against it, fearing that it was an attempt to pass his revenue cap bill, according to to executive director Bennett Sandlin.

The actual amendment language could pose problems for some local entities, Sandlin said. But he stopped short of promising that the municipal league would work to kill it in the House.

“We’re still digesting,” Sandlin said. “It’s not a full-blown revenue cap, so I don’t want to say we’re going to go to the mat on this.”

Sandlin argued that the amendment should have been vetted more thoroughly by the Senate.

“It was never in a bill and it never had a hearing,” Sandlin said.

Bettencourt said recent hip surgery had prevented him from filing as many bills as he had hoped to this session but that fiscal conservatives around the country have long advocated for requiring a “supermajority” to implement any tax increases.

“This has been an issue that we’ve had a long conversation on,” Bettencourt said.