Analysis: No Political Benefit if Voters Can't Feel Property Tax Relief

If a state officeholder of any political persuasion promises to cut your property taxes, demand proof.

They made their most recent attempt during last year’s legislative session with a constitutional amendment increasing the homestead exemption. Their hope was that school property tax bills would drop.

Voters approved the amendment in November, giving the average homeowner a $126 tax break.

Hey, if you can’t make it rain, make it sprinkle.

Lawmakers tried the rain thing back in 2006, rewriting property and franchise and other tax laws to bring relief to taxpayers.

State Sen. Paul Bettencourt, a Republican who was Harris County’s tax assessor-collector at the time, watched the benefit get swallowed by “appraisal creep” — the steady increase of property values in a booming state.

This is the problem for Texas lawmakers. They want to get a leash on property taxes statewide, even though there is no state property tax. It requires them to restrain local governments. The local governments, with plenty of evidence, point to expensive state government mandates that drive up their costs.

Your governments, taken together, operate as a circular finger-pointing squad.

Bettencourt and other state lawmakers are working on new proposals for state-imposed limits on increases in local property taxes.

But Texas lawmakers don’t set property tax rates or control increases in the market values of taxable real estate — so they’ve never really been able to keep their promises of relief.

Relief itself has a definition problem. What lawmakers mean isn’t necessarily what you mean. “Relief is when you limit the increase in the tax,” Bettencourt says. “A cut is when you actually lower it.”

What Bettencourt and his colleagues are suggesting is relief.

“The real answer is that the rate of increase becomes livable because what we’re at now is not,” Bettencourt says. “Whether it’s Lubbock, the Valley, you name it, Houston, go wherever you want to go — they just can’t stand the rate of increase.”

Texas puts a heavier load on property owners than all but a handful of other states. We’ve all heard tales of people — particularly those on fixed incomes — whose rising property taxes forced them out of their homes and into cheaper digs. The prosperity in Texas hasn’t helped in this regard, since it has fueled fast increases in property values in many parts of the state.

Politicians in office have attempted to respond to that.

• Lt. Gov. Dan Patrick sent the Senate Finance Committee this homework assignment (among others) to complete before the next legislative session begins in January: “Study the property tax process, including the appraisal system, and recommend ways to promote transparency, simplicity, and accountability by all taxing entities;” and this: “Examine and develop options to further reduce the tax burden on property owners.”

Imagine, if you’re especially good with small numbers, the Texas taxpayers whose need for property tax relief was fulfilled by the increased homestead exemption now written into the state Constitution.

• In the House, property tax relief appears in the instructions on school finance for the Public Education Committee, in a directive on special district bonds and how to pay them off and in House Speaker Joe Straus' charge to the tax-writing Ways & Means Committee: “Review aspects of the property tax system that contribute to rising property tax levies and taxpayer dissatisfaction. Examine whether the current system allows taxpayers meaningful participation in determining local property tax rates. Explore changes to the appraisal process that could improve the accuracy of appraisals.”

• State leaders would also like to know who ate their previous homework, as you can see in another of their interim projects: “Monitor implementation of the increased residence homestead exemption as approved by the voters in Proposition 1. Determine the amount of property tax relief for homeowners, taking into account increases in appraisals and local property tax rates. Additionally, determine the cost to the state to make up the revenue loss for school districts.”

The political benefits of that constitutional amendment were even smaller than the average $126 tax cut. Imagine, if you’re especially good with small numbers, the Texas taxpayers whose need for property tax relief was fulfilled by the increased homestead exemption now written into the state Constitution.

If voters can’t feel relief, there’s no political benefit.

If lawmakers do something property owners can feel, they will feel the result at the polls.

Sure, other things are more important to voters, like immigration and border security. But if you go to town halls with Bettencourt or anyone else in the Texas Legislature, you’ll hear about property taxes.

Maybe nobody in office will ever get credit for mending property taxes, but they are getting the blame. This is going to be a problem for incumbents until voters are pacified.

And it’s going to be a problem for the voters until the lawmakers find a genuine remedy.