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Voter approval provisions stripped from controversial property tax bill

State Rep. Dennis Bonnen said there weren't the votes on the House Ways and Means Committee to pass Senate Bill 2 if it had new election requirements for tax rates local governments set.

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The most controversial provisions of the Texas Senate’s property tax bill — the thresholds for when cities and counties must get voter approval for their tax rates — were stripped from the legislation in a House committee Friday.

But that doesn’t necessarily mean those triggers will stay out. They were a key piece of state Sen. Paul Bettencourt’s Senate Bill 2, which passed the upper chamber 18-12 earlier this session.

"The Senate passed the bill we wanted," said Bettencourt, R-Houston.  

The House Ways and Means Committee on Friday amended and passed an already reworked version of SB 2 to remove the provisions, which have drawn ire from city officials, county leaders and first responders for months.

“We didn’t have the votes to move the bill out of committee with them in the bill,” said Ways and Means Chairman Dennis Bonnen, R-Angleton.

If the bill makes it to the full House floor, lawmakers could amend it to put proposed new election thresholds back in. But if the current bill gets sent back to the Senate for signoff without them, the matter could become a showdown between the two chambers. Bettencourt said the Senate's version of the bill is a high priority for Lt. Gov. Dan Patrick

"It's very important to the average Texan, more importantly, because they're the ones paying the bills," he said.  

In testimony in the House committee this week, Bonnen made it clear that the two chambers view SB 2 very differently. Bettencourt has portrayed it as a bill that will provide Texans with relief from fast-rising property tax bills. Bonnen said it does no such thing and painted it as a piece of legislation that could at least help Texans better understand how property tax rates are set, why tax bills rise and which taxing entities are charging them which amounts.

The bill has split Texans, who are dissatisfied with property taxes, and the local leaders they elect to city councils and county commissioners courts. Landowners and proponents of the bill say that the automatic election requirement would hold local government officials accountable for the taxes they levy against Texans.

Critics of the bill say voters can already oust elected officials for passing local budgets and tax rates they don’t like. They also say it glosses over the fact that an election could be triggered when the actual tax rate remains flat because rising property values play a major role in calculating the election trigger. Many local officials also say the bill would threaten their ability to hire police officers, build new parks and fill potholes.

The current and proposed thresholds that could allow a rollback election aren't based entirely on the actual tax rate, which is the amount per $100 of property value that a government entity levies against landowners. Instead, the formulas focus on how much total tax revenue a local entity receives from properties from one year to the next. So a city or county could hit the threshold for an election without changing its tax rate if there was a significant increase in local property values.

Currently, an 8 percent property tax increase or higher allows voters in a city or county to gather signatures to call for an election on the new rate. The Senate version of the bill initially lowered that threshold to 4 percent and made the election a requirement. Bettencourt changed the threshold to 5 percent amid pushback.

Bonnen’s version originally set two thresholds for most cities and counties. If the overall collections were to increase by 3 percent plus inflation, residents could petition for an election. If collections were to increase by 6 percent plus inflation, an election would be automatic.

When asked if he thought the Senate could live without a remake of current election thresholds, Bettencourt said he's learned from this week's raucous, last-minute slaying of bills on the House floor not to anticipate what may happen in the lower chamber.

"At this point, only a fool will do so," he said.

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