Texas Lawmakers: Cities, Counties Wrong to Use Property Tax Loophole

A pair of Republican state lawmakers are proposing ways to discourage Texas cities and counties from exploiting a disaster "loophole" to raise property taxes without voter approval.

Harris County Democrats are among those looking for an end-around to 2019's SB 2, which requires voter approval for any tax hike above 3.5 percent.

Houston state Sen. Paul Bettencourt drafted that legislation.

“The emergency management was actually done in 2017 in the House and was designed around what happened with hurricanes Ike and Harvey on physical damage,” he said during an online discussion with the Texas Public Policy Foundation.

“If people cross the line here, you can count on a bill that will bust some butts if that's what it takes.”

Lubbock state Rep. Dustin Burrows said voters need to get informed and engaged.

“Find your new county portal, everyone has got one over $200,000,” he says. “Go to it. Go look through all the different taxing entities. Figure out how much more in dollars and cents each of them are proposing to levy on your property.”

Other technical changes also may be needed to discourage improper tax hikes.

“I worry about people trying to end-run the spirit of SB 2 and going to certificates of obligation, and use debt financing instead of pay-as-you-go,” says Burrows. “If we start to see those and start measuring those, we may need to go and take non-voter approved debt and categorize it as something that actually falls under the rollback rate or the voter approval rate.”

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