Revenue Caps Will Limit Local Control and Hurt Harris County

On Monday, the Texas House will debate House Bill 2 (HB 2), which puts in place a de-facto revenue cap for local government that could cut funding to local police, fire, roads, emergency medical services and more. HB 2 drastically cuts the amount by which local governments can increase their tax revenue without a special election, which the bill would make mandatory.

This revenue cap comes at the cost of under funding police departments, fire departments, disaster relief, parks, and libraries. HB 2 does not provide significant tax relief, but instead creates a long list of challenges that will be detrimental to Texans from all corners of the state in the long run.

Texas local governments – cities, counties, community colleges and hospital districts – provide vital services to their constituents. Locally elected officials decide how to provide these services and how to pay for them, an arrangement that reflects the values and desires of local voters. The Texas Legislature is now threatening to interfere in these local decisions by limiting the ability of local governments to collect enough revenue needed to deliver the public safety, health care, education, parks, libraries and other services their communities want.

Under HB 2, if revenue raised by local entities increases by more than 2.5 percent, an automatic rollback election is held.  This can happen even in situations where the amount an individual pays in taxes remains the same, because when cities grow, the revenue raised increases because there are more people and companies paying taxes.

Additionally, this bill is unnecessary because people can already vote to roll back the revenue increase if the revenue is increased by more than 8 percent and they petition for an election to be held on the issue. Furthermore, if the citizens do not agree with the actions of their local government, they can vote them out.

It is important to remember why Texas relies so heavily on property taxes: to fund public schools. In 2011, the Legislature cut $5.4 billion from public education and has yet to fully restore those cuts. Texas has no state income tax, therefore it relies heavily on sales and property taxes. The state and local entities split sales taxes, but only local entities receive property taxes. It’s unconstitutional for the state to levy property taxes, and state lawmakers don’t have the power to set those rates. If property taxes are the problem, the solution begins with the funding of public schools.

Mayors from across Texas are against these revenue caps, including Houston Mayor Sylvester Turner. In an opinion piece published by the Houston Chronicle (click here to read), he cites Houston’s past negative experience with revenue caps. Below are some excerpts from Mayor Turner:

  • 2004: Houston voters passed a revenue cap, amending the city charter to limit the annual growth of property tax revenue to the combined rates of inflation and population growth, or 4.5% (whichever was lower).
  • 2006: Voters slightly bumped the cap higher, allowing Houston to add an additional $90 million for public safety.
  • 2014: The city exhausted that extra margin.
  • 2018: As a result of the revenue cap, Houston’s 2018 tax rate is approximately 5 cents lower than the 2013 rate and its lowest since 1987. The city estimates that the revenue cap has resulted in more than $532 million in lost revenue since 2014, when the cap’s impact was first felt. In the most recent year, the city estimates that property tax revenue was reduced by $152.7 million, enough to fund 1,152 police officers.

 

What To Watch This Week:

Our video of the week is a TED Talk from 2017 by Katie Bouman. Katie is the 29-year-old computer scientist who helped develop the algorithm creating the first-ever image of a black hole. The photo was released on Wednesday.

“At the heart of the Milky Way, there’s a supermassive black hole that feeds off a spinning disk of hot gas, sucking up anything that ventures too close — even light. We can’t see it, but its event horizon casts a shadow, and an image of that shadow could help answer some important questions about the universe. Scientists used to think that making such an image would require a telescope the size of Earth — until Katie Bouman and a team of astronomers came up with a clever alternative. Bouman explains how we can take a picture of the ultimate dark using the Event Horizon Telescope.”

You can watch below or click here.

 


 


Song of the Week

Our song of the week is the “Old Town Road [Remix]”
by Lil Nas X featuring Billy Ray Cyrus.

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