AUSTIN (Nexstar) — The path to property tax relief hit a major hiccup on Tuesday morning. A coalition of House Democrats and conservative House Republicans voted down the conference committee report on Senate Bill 10, which would lower the voter-approval tax rate (VATR) from 3.5% to 2.5% on taxing entities located in cities and counties with a population over 75,000 people.
VATR is a cap placed on local taxing entities that limits how much the tax rate can be raised before getting approval from voters. If a local taxing entity wishes to raise property taxes over the VATR rate, they must get voter approval.
In the Texas House, three amendments were passed to continue to lower property taxes further:
A State Rep. Brent Money, R-Greenville, amendment removing the population qualification for the VATR change, subjecting all taxing entities to the VATR change. A State Rep. Andy Hopper, R-Decatur, amendment to include municipal utility districts (MUDs) to the VATR change. MUDs are specialized districts that provide critical infrastructure to areas outside of city limits. A State Rep. Jared Patterson, R-Frisco, amendment to lower the proposed VATR rate from 2.5% to 1%. The provision also added a section exempting public safety expenditures from the change, although only for municipalities or counties with over 75,000 people."There are people in my district who have calculated this tax relief (and) anticipate that it's going to be roughly equivalent to an annual Starbucks run," State Rep. Mitch Little, R-Lewisville, said during the process to amend the initial Senate version.
When the House and Senate pass different versions of the same bill, both sides put forward five members to go to a 'conference committee,' where both sides hash out their differences. On the conference committee report for SB 10, the Texas Senate threw out all of the House changes—asking both chambers to accept the initial House version of the bill.
"My concern is a lot of the things that we've done on the House floor are gone from this bill now," State Rep. Tony Tinderholt, R-Arlington, said on Tuesday. "I support property tax relief like I think everyone in this building does. It's super important to our constituents, but I think it should be equal and paired across the entire state equally regardless of population."
Little argued the Senate's version of the bill does nothing to stop property tax increases.
"The bill only brings within it's ambit 5% of the taxing jurisdictions," Little said while opposing the conference committee report. "The Senate has decided, 'no (municipalities and cities under 75,000 people) are not the problem.' Our municipal utility districts were brought under the ambit of this bill by our amendment and the Senate has decided 'no, you are not part of the problem either.' In reality, this bill catches within it's ambit only very large cities, all of whom are intending to bring a voter-approved tax rate election anyway."
After Little and Tinderholt spoke, State Rep. Ellen Troxclair, R-Burnet, stood with fellow Republican female members Terri Leo-Wilson, R-Galveston, Hillary Hickland, R-Belton, Caroline Harris-Davila, R-Round Rock and Candy Noble, R-Lucas, in support of the conference committee report.
"This bill, of course, is not the silver bullet. But it is a step in the right direction," Troxclair, a former Austin City Council member said. "As we've stated time and time again, the State of Texas does not levy a property tax, the local taxing entities do. This bill simply says that you must get voter approval if you'd like to go over a 2.5% rate."
However, combined with Democratic votes, Troxclair's effort was not enough. The conference committee report was voted down 60-71. The bill now gets sent back to a conference committee to see if the Texas House and Senate can find middle ground.
"Two weeks left in the 2nd Session. If both chambers refuse to put taxpayers ahead of taxing entities that’s on them," State Rep. Steve Toth, R-Conroe, said. Toth also publicly supported voting down the conference committee report.
However, on the Senate floor last week, Lt. Gov. Dan Patrick said the Senate plans to end the second special session on Wednesday. If his statement holds, conferees have less than 36 hours to come up with a compromise.
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