By Carroll G. Robinson, Esq., Contributing Writer
For years, Democrats and progressives have rallied in support for investments in education, improvements in healthcare, and protection of the environment. They have been tireless champions of civil rights and voting rights. Unfortunately, what they haven’t talked about enough—is the increasingly high rate of property taxes surging in Texas.
Democrats need to talk about tax reform.
Property taxes in Texas are some of the highest in the country. Because of our antiquated tax system and exploding appraisal rates, middle and working class Texans bare the overwhelming burden of taxation. While commercial property owners have successfully used the system to keep their taxes low by fighting appraisal values—homeowners have suffered.
Residential tax payers are supposed to be protected by a tax cap,—which is set to 10% per year. But because of near automatic value increases—it’s turned into a backdoor tax increase that is a financial burden on working and middle class Texas homeowners.
These annual increases in property valuation mean annual local property tax bills are increasing at a rate higher (and faster) than the annual rate of inflation and far exceed the average annual salary increases of working and middle class Texans.
Some people forget that when property valuations increase, homeowners’ property
insurance bills increase along with their property tax bill—contributing to the rising cost of home ownership. The purchase price of a home is not the only factor in keeping housing affordable. Consideration must also be given to the long term ability
(sustainability) of homeowners to afford annual property tax and homeowners’ insurance payments.
Before the Great Recession, one of the major causes for the loss of homes and
the existence of abandoned buildings in inner city neighborhoods was delinquent property taxes; so-called upside down properties where the taxes and fees owed exceeded the value of the property, resulting in evictions. We literally taxed people out of their homes.
Those abandoned homes became sites for crime and violence, while reducing the values of neighboring properties and further destroying inner cities.
While Republicans have talked about property tax reduction—they have not yet done enough to really help fix the problem. GOP state leaders have increasingly shifted the burden of services and taxation downward. While the city has a revenue cap on property taxes—the county doesn’t and those taxes have skyrocketed. Insufficient action by Republicans in Austin and Harris County Government has kept our property taxes far too high.
To solve this problem we need to embrace fiscally sound and progressive solutions.
One of the best ways is to expand the homestead exemption. The legislature should give local governments the authority to expand the property tax exemption for the first $150,000 of residential taxable property. The net effect of this would be a significant tax cut to middle and working class homeowners as well as a cut for all homeowners.
Similarly, a reduction of the 10% tax cap to 5% would reduce the rate of “automatic” increases in appraisal values. Local governments could still raise more revenues but they would need to actually raise the rate rather than simply take advantage of a stealth tax.
Finally, we need fundamental reforms to the appraisal system. There is no debate that large corporate entities have successfully challenged appraisal values reducing their property values and shifting tax burdens to homeowners. Appraisal districts are ill-equipped to fight the well-healed corporate lawyers these firms employ. The Texas Attorney General’s office should be empowered to intervene in any case involving a corporate entity in opposition to their request to lower their appraisal value. We need to level the playing field to protect homeowners.
Middle class Texans need leaders that will advocate for them—not just the special interests. Texas Democrats have to lead the way in fighting for a lower and fairer tax system.
Carroll G. Robinson, Esq. is a former At-Large Houston City Council Member and Houston Community College Trustee. Carroll has served on the Board of Directors of the National League of Cities, is a past president of the Texas Association of Black City Council Members and is also a former General Counsel of the Texas Democratic Party.