Austin's Leading Local News: Weather, Traffic, Sports and more | Austin, Texas | KVUE.com

Texas This Week: Property tax reform debate

The House of Representatives was supposed to take up its version of the property tax reform bill to reduce the rollback rate last week. Then the Senate decided it would take its up. But the result was a failure to launch by both chambers.

AUSTIN, Texas —

Three things to know in Texas politics

There are 44 days left in the 86th Texas legislative session, which means things are getting really busy, tensions are slowly mounting and controversial bills are passing.

Here's three things that happened in Texas politics: 

1. Thursday evening, the Senate passed two controversial employment bills by Conroe Republican Sen. Brandon Creighton. One prohibits cities and counties from passing paid sick leave ordinances, which is what Austin did last year. The Texas Supreme Court overturned Austin's ordinance before it ever went into effect. Creighton's other bill prohibits municipalities from passing ordinances requiring other employee benefits and business policies, from required water breaks for workers to retirement to accidental death benefits. Democrats and critics argue the bills will also strip away city-mandated policies to protect LGBTQ Texans, but Creighton disagrees. The bills now head to the House. 

2. Five members of the House of Representatives have been appointed to a conference committee on the budget. They'll meet with a group of senators to hash out the differences between the two chambers' budgets. The House approved its budget, first sending it to the Senate, and this week the Senate approved an amended version of HB 1. The senators basically replaced the entire House budget with their version of the budget. Perhaps the most significant difference between the two is school finance and teacher pay. The House wants to reform the entire school finance system while the Senate wants to give teachers and counselors raises. 

3. Legislation called the abortion bill of the session was voted out of the Senate this week. It's Senate Bill 23 by Sen. Lois Kolkhorst, known as the "Born Alive Infant Protection Act." It creates criminal penalties for doctors and healthcare providers who don't give appropriate medical treatment to a baby who survives an attempted abortion. Opponents argue federal law already makes that illegal and say this is just meant to discourage providers from performing abortions. But supporters say the state enhances penalties on crimes all the time and this sends the message that they take this seriously. 

One more thing worth noting is the Senate approved a bill to raise the age to buy or use cigarettes, e-cigarettes or tobacco products from 18 to 21, sending the bill to the House for consideration. 

Tackling property tax reform in the Texas Legislature

This week, the House was supposed to take up its version of the property tax reform bill to reduce the rollback rate. Then, the Senate decided it would take its up on the same day. But the result was a failure to launch in both chambers. Bob Garrett, Austin bureau chief of The Dallas Morning News, sat down with Ashley Goudeau to discuss what didn't happen and why.

Ashley Goudeau: Let's talk a little bit about property tax reform. Texas lawmakers, statewide lawmakers, have been trying to address this in a way to lower or slow the growth of property taxes for quite some time now. Why have they not been able to do it?

Bob Garrett: "It's expensive, in a word. You know, in 2006, they lowered the rate by one-third, but it was perceived that that was washed out by other cities and counties and others raising their rates. And of course, values keep going up and certainly in urban Texas like Austin. So all the reductions were not really noticed and that's one of the problems they have is it takes a lot of state money to the school districts to buy down that rate. And they've not had a lot of new state revenue because they've been cutting taxes continuously."

Goudeau: Earlier in the session we had this sort of 'kumbaya' moment between the governor, the lieutenant-governor and the speaker of the house. And in early February, they came out endorsing this plan, HB 2 SB 2, to lower the rollback rate to two and a half percent. And I think this kind of raised a lot of eyebrows because the session before; the House and Senate couldn't agree on 6 percent or 4 percent. And then all the way down to two and a half. Talk to us about this idea.

Garrett: "Well Governor Abbott started that at the beginning of his reelection campaign in early 2018, so you have to kind of believe he was starting out as low as possible, knowing they'd have to come up on the number because they couldn't get, as you said, 4 or 6 percent for the cities and counties, through in the 2017 session. So I think that's why they started out so low, but it's been a pitch battle with the local governments just saying, 'We won't have the ability to have police and fire and public safety if we can't raise enough money and we're certainly not getting any money from the state to help us.'"

Goudeau: And now, critics of the cities and the counties and the schools say, 'Well that's just not true; you guys are scaring people for no reason.' Talk to me about this thought process behind 'we won't be able to afford police and fire.'

Garrett: "Well I mean, those are 60, 70 percent of some of those city hall budgets. So if you say they can't raise more money off the property tax, they really have no place else to go. But I mean the whole issue really gets to the larger question of in Texas, how do we want to finance our government services? Since we don't have an income tax, we're left with two legs of the three-legged stool. That's sales tax and property tax. And that's where you get into, how do you lower the property tax in Texas? It's just tough."

Goudeau: Supporters of HB 2, SB 2 say, 'But hold on. The bills just say you can't automatically go over two and a half percent. You could always explain to voters we need money for police, we need more money for fire, and the voters would say what they want to say, right?

Garrett: "Right and that is certainly, they say, the people's voice should be consulted and respected. Some of the mayors and county commissioners would say this thing is calling for a November election and we set our budgets in August and September, so it's going to be very difficult to plan because you can't assume the voters are going to say yes."

Goudeau: On Thursday, the House was set to take this up. They had already pre-filed amendments, 180 amendments, everyone seemed ready to go and then nothing happened.Or at least on the outside it looked like nothing happened. What was going on behind the scenes?

Garrett: "I think the House preferred to see the Senate go first and send them a bill so that the House doesn't have to take two votes on this. If they send their own version initially to the Senate then it will come back with some changes and the House will have to take two votes. I don't really understand the logic of why two votes is worse than one, but that was one major consideration. And then of course, they could not get either Republican Senator Kel Seliger of Amarillo or Eddie Lucio, the Democrat from Brownsville, to give them 19th vote, 'hey need to bring up a bill in the Senate.' So things just stalled."

Goudeau: The idea also about the House taking up this bill first is that a couple of things would happen: one, there's talk of exempting school districts out of this bill; there's talk in the House of exempting first responders out of this bill, and that that 2.5 is going to increase.

Garrett: "And turn into something I can't even explain -- 1.75 percent plus some measure of inflation, and then you couldn't go beyond that except maybe you could have a referendum of the voters to go a little bit beyond."

Goudeau: So that's part of the reason they want to see the Senate pass their version first right?

Garrett: "Yeah, and I mean this thing has gotten too clever by half in the sense that it's going to be really hard to explain to voters that you've really done something. They will claim that they've done property tax reform and relief because let's not forget, in the school finance bill the House passed, there is at least 4 cents per $100 valuation off the main school tax rate. But, that's not yet gone anywhere in the Senate and it costs money to maintain that in the future."

Goudeau: Right. And then on top of all this happening with HB 2 and SB 2, earlier this week we all got a joint press release from the Big 3, stating that if one of those bills goes through the chambers, they would like to increase the sales tax by a cent. How does this all factor in?

Garrett: "To reduce property taxes. This is all about trying to be able to say persuasively to their voters next year in the election that they did really reduce property taxes. But as you know, for poorer Texans, that pay a larger part of their income on sales tax. This is a big hit and they're not going to get any relief from property taxes. Of course, a lot of them don't vote, so that's part of why they don't have a Legislature that's representing them. But we'll see if that can pass. That's a tough tax swap vote. Some of the more conservative groups have wanted this for some time -- higher consumption taxes to lower property taxes. It's never really gone anywhere, and in 2006, we didn't do the sales tax to buy down property taxes; we did a higher business tax."

Goudeau: And when you look at what it would take to even get that passed, we're talking about a constitutional amendment, so you'd have to have two-thirds of both bodies and then the voters still have to approve.

Garrett: "Right and I think it gives some cover to say we're going to take it to the voters, but it kicks in that super-majority that'll be really hard to get to. The Democrats, as you know, picked up a number of, 12 seats, in the last election in the House. It will be hard to get to 100 votes in the House for that."

Goudeau: The lawmakers are supposed to take the weekend to see if they can reach a consensus. The House says they will take this up Monday. What are your thoughts on, I want you to look into a crystal ball and tell us what's going to happen.

Garrett: "Well you know, Dennis Bonnen has had amazing unity and control, one could argue, in the House. So I would not put it past him that he's going to deliver on this. But it is a very difficult thing for all the reasons we've been talking about. It just is. Property taxes is just the torture pit of Texas politics. There's no easy way out, it takes a lot of money and it takes a lot of explaining, and people get those bills every spring and they're not happy."

Goudeau: We'll be watching what happens. Thank you.

In this week's The Last Word, Ashley discusses the actions of some people, apparently frustrated that bills they support have stalled in the Legislature.