Texas House approves bill aimed to limit city, county property taxes

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DALLAS — The Texas House pushed forward a proposal Monday aimed at containing property tax bills by putting tighter restrictions on cities and counties.

The legislation would further limit how much more in property tax revenue cities and counties can collect each year without voter approval. Under state law, that limit sits at 3.5%. The bill would take that limit down to 1%.

“I believe that we need to venture and do everything we can at the state level to provide lower taxes to our constituents,” said state Rep. Morgan Meyer, R-University Park, who carried Senate Bill 10 in the House.

The bill, which passed the Senate earlier this month, cleared the Texas House by a 78-52 vote.The Senate will either accept changes House lawmakers made to the bill or find a compromise.

Such a limit comes at a tricky time for localities. Cities and counties have already had their budgets crimped by the state’s current limit on property tax revenue enacted in 2019. The cost of paying for essential services like police and fire protection and road construction have only grown since then as the state’s population boomed. Localities have also brought in less revenue from sales taxes thanks to a slowing economy. Federal pandemic relief dollars have all but dried up, and there’s uncertainty over future federal funding.

Local officials and Democratic lawmakers raised concerns that cities’ and counties’ public safety spending and ability to recruit police officers, firefighters and paramedics as well as maintain equipment needed to respond to public safety calls would take a hit under the proposed limit. Police and fire spending tend to make up the majority of a city or county’s budget. City and county officials asked lawmakers last week to consider some kind of carveout for public safety spending.

“I don't see how there's not a public safety hit that our local governments are going to take and then they're going to have to go to the voters every year simply to approve maintaining existing fire and police staffing levels,” said state Rep. Chris Turner, D-Grand Prairie.

Proponents of the bill had argued that cities and counties can ask voters to approve a higher property tax rate if they run into a budget crunch.

“This is about providing accountability,” Meyer said. “It's making sure cities and counties plan accordingly, and if they do that, they should be able to cover all of their core services that are necessary.”

But the House ultimately approved a change to the bill that exempts public safety costs from being subject to the new limit.

The bill initially would have only applied to cities and counties with at least 75,000 residents. House lawmakers struck that language, so now the bill would apply to every city and county.

Republican lawmakers have shown frustration that while they’ve spent billions of dollars to rein in school property taxes, city and county property taxes have generally continued to climb — albeit more slowly than they otherwise might have if not for state limits. Texas will spend $51 billion over the next two years to give bigger school tax breaks to homeowners and business owners. Gov. Greg Abbott called on lawmakers to find ways to cut property taxes by reining in spending by local governments.

To the chamber’s more conservative GOP lawmakers who have sought more aggressive ways to bring down property taxes, the legislation is insufficient. Before legislators amended the bill to include a tighter cap, state Rep. Mitch Little, a Lewisville Republican, said that city and county officials in his district told him the typical homeowner in those places would save less than $20 a year under the bill — figures that Meyer disputed.

“My concern is that everyone in my district who has calculated this suggests that this bill roughly equates to a Starbucks run in tax relief,” Little said.

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