State limits on local taxes aren’t reform
State officials are congratulating themselves for proposing limits on local property tax increases, but Texans should not be misled. This is not tax reform, because state officials don’t control local tax rates to begin with. It’s an attempt to look like they are doing something at the state level to keep tax bills low among local governments.
The proposal unveiled last week by Gov. Greg Abbott, Lt. Gov. Dan Patrick and House Speaker Dennis Bonnen is a 2.5 percent limit on local tax increases by the state’s 100 or so largest cities, counties, school districts, etc. On the surface, it sounds nice. We all want lower taxes — though we also want the services which taxes pay for. Under their plan, if local government wants a tax hike of more than 2.5 percent, its voters would have to approve it. (The current threshold for these votes is an 8 percent increase.) In effect, that vote would stop most of these local tax increases because few voters voluntarily decide to increase their own tax bill so directly.
A good illustration of this dilemma is the falling amount of state aid to education. It used to make up about 50 percent of the budgets for each public school district in the state. In the past decade, it’s declined to about 40 percent. That 10-percent gap in funding has to be made up somewhere, and usually it’s been in local tax rates. The alternative would be for local school boards to cut spending for teachers or courses by that 10 percent, and few parents would want that.
School districts like Beaumont that are facing real challenges such as the potential closing of three campuses for low performance need financial flexibility to overcome their problems. They know local conditions better than anyone in Austin, and they know best what might work and how much support they might get from local taxpayers.
The Legislature should reject this top-down micro-managing. Texans rightly revere the concept of “local control” for their school districts. The same approach should apply to cities, counties, drainage districts, etc. Let them make their own financial decisions. If these locally elected officials increase tax rates too much, they will likely be voted out by the people affected by those changes.
If Abbott, Patrick and Bonnen want to help Texans, they should get state funding for school districts back up to 50 percent. This would be a real boost, because public school taxes are often the highest portion of a tax bill for any property owner.
Then these state officials should resolve to end unfunded state mandates, which they are finally addressing, so that cities and counties can meet their responsibilities better.
Texans want low tax rates, but they also want good schools, roads, drainage, etc. That’s an ongoing challenge that requires many approaches, but this deceptive gesture by state officials won’t help.