Testimony by Peggy Venable, AFP-Texas Director
on HB 164 by Rep. Isett
Relating to certain limitations on the ad valorem tax rates of school districts and other taxing entities
May 9, 2006
As taxpayer advocates, we at Americans for Prosperity-Texas applaud Rep. Cheri Isett for introducing legislation which modifies the current tax rollback process. These reforms are long overdue.
Moreover, if legislators fail to enact taxpayer protections, any property tax cuts you provide will simply evaporate as rates or appraisals increase.
Under current law, taxpayers have few protections. When a local taxing entity raises property tax revenue more than 8 percent higher that the previous year, citizens must petition for an election to roll back that rate. That petition-gathering process put the burden on the taxpayer to protest by gathering 10% of the taxing entities’ registered voters’ signatures.
Currently, a rollback election is underway in Comal County where taxpayers were required to gather almost 6,000 signatures just to get the rollback initiative on the ballot to roll back a 12.5% increase Now they are having to “fight the County Courthouse” to get the message out that taxpayers should approve the rollback election currently underway. If they are successful, the rate will be “rolled back” to 8%. That is little comfort and local officials who proposed the rate increase are arguing that it is only a few cents to the taxpayer between the rollback rate and the proposed rate.
Let us not forget that the federal income tax was enacted at 1% and taxed only the wealthy.
Comal County is a great example. In just 10 years (from 1995 to 2005) Comal County revenue grew by over 119 %, nearly double the rate of population plus inflation. Comal county taxes have exceeded the 8% high-water mark each year since 1997. And for FY 2006, the County called for an additional 7.15% increase in revenue.
Comal County is not an anomaly. According to the research done by Harris County Tax Assessor-Collector Paul Bettencourt, in a paper “Property Tax Report on Appraisal Caps and Revenue Caps” presented to this committee in February 2005:
“Local governments increased their property tax levies in excess of 71.5% between 1996 and 2003. During that same period, Texas’ population and an estimated average Consumer Price Index (COP) each grew nearly 16%. This means that statewide, property tax revenues are growing many times faster than either index and twice as fast as both indexes combined.”
We encourage the legislature to enact legislation which puts taxpayers in greater control over the growth of government. Taxpayers should determine how much government they want and are willing to pay for.
We also have concern that tax dollars were used to commission a study by The Perryman Group in March 2005. The study, “The Impact of Potential Restraints on Local Government Activity (Appraisal Caps, Expenditure Limits, and Revenue Limits) on the Economy of Texas” is a flawed study. The study made the assumption that these would be “hard caps”. Actually, all we are asking is for taxing entities to get taxpayer approval before busting spending limits.
Currently, we taxpayers have given government a blank check. We as taxpayers simply want to be able to set some spending limits, just as we do with our family budgets. Taxpayers are not a bottomless pit of money, and for a study to be conducted at taxpayer expense to claim that taxing entities need “flexibility” is showing flagrant disregard for the interests of the taxpayers.
Taxing entities need to trust the taxpayers. Clearly, they have so little faith in the services they are providing and the value that taxpayers place on those services, that these local government representatives are assuming that – when asked – taxpayers will oppose higher spending.
Each year about 25 rollback elections take place in Texas against school districts, but it is rare to have a rollback election against a county or city. This may be because to hold a rollback election in a school district, petitions do NOT have to be gathered. On average only about one county or city rollback election occurs per year statewide. Not all are successful. In school districts had 29% of the rollback elections passed, in Counties 83% were successful, and in cities, 64% passed for a total of just under half the rollback elections passing.
Voters in the city of Bedford, Andrews Independent School District (ISD), Highland ISD and Brooks County ISD had successful rollback elections in 2004, according to the Texas Comptroller of Public Accounts' Property Tax Division (PTD). Currently, the Comal County rollback election is underway and the voting date is May 13.
Some local government officials and their lobbyists will claim that the rollback elections are too expensive. Taxpayers simply say “hogwash” – if these entities want more of our money, they should make their case to the taxpayers, and allow taxpayers to go to the polls on a uniform election date, and give those officials the “green light” to spend more or the “red light” to hold the line on spending.
Taxpayer funded associations and lobbyists are opposing taxpayer protections and want us to simply write them a blank check. It’s time taxpayers gain control over the growth in government. We need to allow taxpayers to make the decisions on how much government they want and are willing to pay for. It’s time we trust Texas taxpayers and allow them the opportunity to decide how much of their property tax cut they want to keep. |
