The buzz over House Bill 2 came to an abrupt halt on Thursday when House Speaker Dennis Bonnen announced there would be no vote, despite expectations there would be.
“We are putting off a potential vote and buying more time for compromise [with the Senate] on House Bill 2,” said Bonnen.
Bonnen’s decision was based around the Senate’s own version of property tax reform, which he wants to see a vote on first. Once that happens, the House will then proceed with its own vote, which won’t come until at least Monday, according to Bonnen.
However, with the introduction this week of a proposed 1-cent sales tax increase — which Governor Greg Abbott believes could defray the rising cost of property taxes even further — the Senate appears to be more hesitant in its support for its current property tax bill, SB2.
Both SB2 and HB2 would impose a 2.5{6d294a0824f6f808f1cc9dcde10d35acd237638cfa4e8dd876851c8906eac7a1} limit on local property tax revenue growth for cities without a public vote.
In Austin, the delay of a vote on HB2 is welcome news to city leaders, including Mayor Pro Tem Delia Garza, who believes the 2.5{6d294a0824f6f808f1cc9dcde10d35acd237638cfa4e8dd876851c8906eac7a1} threshold would kill city services.
“It hamstrings our ability to perform the basic functions of local government just so its proponents can say that they offered property tax relief,” Garza said.
In November, Austin voters approved a near-$1-billion bond package, but Garza said that money won’t be enough unless the city can raise property tax revenue by at least 4{6d294a0824f6f808f1cc9dcde10d35acd237638cfa4e8dd876851c8906eac7a1}.
“Yes, bond money will pay for that building but we have to staff it with people,” she said. “What’s the point of building a building if we can’t put the actual services there?”
The Austin City Council continues to say the 2.5{6d294a0824f6f808f1cc9dcde10d35acd237638cfa4e8dd876851c8906eac7a1} cap would be an extreme detriment which could leave city coffers $52-million in the red within three years. However, neither HB2 nor SB2 would prevent Austin from going above that 2.5{6d294a0824f6f808f1cc9dcde10d35acd237638cfa4e8dd876851c8906eac7a1}. With approval from the public through a simple vote, Austin could easily reach that 4{6d294a0824f6f808f1cc9dcde10d35acd237638cfa4e8dd876851c8906eac7a1} Garza suggested, or perhaps even more than that.
During the 2017 legislative session, the House approved a 6{6d294a0824f6f808f1cc9dcde10d35acd237638cfa4e8dd876851c8906eac7a1} limit and the Senate approved a 4{6d294a0824f6f808f1cc9dcde10d35acd237638cfa4e8dd876851c8906eac7a1} limit. Neither chamber saw eye-to-eye on the dueling bills, and thus property tax reform failed to make it through to the governor’s desk.
