Can State Sen. Paul Bettencourt Pull Off a Property Tax Reform Miracle?
State sen. Paul Bettencourt is determined to get property tax rates fixed.
Photo from the Texas State Legislature
Over the course of 11 months state Sen. Paul Bettencourt, chairman of the Select Committee on Property Tax Reform and Relief, heard countless stories from people who have been grappling with sky-high property taxes — Texas has the fifth-highest median property tax rate in the country — that just keep climbing.
So Bettencourt, a Houston Republican, decided to make lowering property taxes his personal mission during the upcoming state legislative session, and filed to that effect, Senate Bill 2.
"In the last three years there's been an astonishing increase in home values. In Harris County it's been a 36 percent increase in value in all homes, from Acres Homes to River Oaks,” Bettencourt says, noting this is happening across Texas as well. “The rate of property taxes increases two and a half to three times faster than Texans paychecks are growing. It's time for us to recognize the obvious and slow this down.
Texans are getting taxed out of their homes.”
Property values go up, but the taxes never come back down, Bettencourt explains. He notes that this has been a particular problem here in Houston ever since the oil industry began to slide into a downturn back in July 2014. The downturn wasn't as abrupt as the 1980s oil crash, but the decline was felt as people were laid off from oil companies and Houston's sales tax returns tumbled. Receipts have been falling each month for the past 20 months.
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“Those falling sales tax numbers are as good a definition of a local recession as I've ever seen,” he says. “It's been a tale of two cities here because the petrochemical industry has been building like crazy, but on the other side of town, in my district, we've had 30,000 layoffs in the energy industry alone.”
There have been plenty of attempts to get property tax reform legislation through the Legislature in recent years, but not only does Bettencourt have the advantage of having Lieutenant Governor Dan Patrick's backing, the state senator also has a wealth of very specific knowledge about what people across Texas have been dealing with.
He heard more than 50 hours of public testimony during a series of hearings held over the course of 11 months across Texas. At each stop, people showed up eager to tell their stories, he says. “In the old days of my father's generation, people would tell their bartender their troubles, but now people tell their taxpayer committee,” Bettencourt says. “We heard everything.”
During a hearing held in October in Houston, one man told the committee how a security guard at the appraisal district office put the man in handcuffs when he went there to ask questions about why his home value had shot up so high.
After taking all of this in, Bettencourt drafted The Property Tax Reform & Relief Act of 2017. Senate Bill 2 touches on almost all aspects of the Texas Property Tax system, with the goals of simplification, clarification and transparency of the property tax and appraisal system.
“Right now there is no oversight from the state. Even the training appraisal review board members get has been cut in half. The appraisal system is becoming so adversarial and there's nothing people can do. Instead, people are being pushed to the point they don't think they can retire in their homes anymore.”
Local governments are currently allowed to raise property taxes as much as 8 percent each year, but the bill would cap it so these entities could raise property taxes only up to 4 percent annually. To raise the local property tax rate any more than 4 percent, governments would have to ask voters to approve the increase.
After drafting the legislation, Bettencourt found he had an ally in the lieutenant governor. While Patrick is laser-focused on legislation about who uses what bathroom and other such bills, he put Bettencourt's proposed property tax legislation high on the priority list for the 85th Biennial Legislative Session, which starts in January, giving the bill No. 2, so it will be at the top of the lawmaking heap.
Of course, this isn't the first time someone in the Lege has tried to get property tax reform legislation pushed through. However, Bettencourt feels like this time it's going to happen, because it's just too hard to argue with what people are having to deal with. “Any way you slice it, the average salaries have not gone up enough to match the tax increase. We can't keep putting people behind like this. We are leaving people in the dust.”
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