The Texas Senate approved a reworked version of a controversial property tax reform bill earlier this week, but there’s still a long road its passage ahead and municipal leaders, county officials and others across the state are keeping a close eye on lawmakers’ efforts to control local revenues.

Among those, Kilgore City Manager Josh Selleck and Gregg County Judge Bill Stoudt decry what others’ have described as a “punitive” effort by legislators that would limit economic growth and cripple taxing entities’ ability to fund expanding operations.

A contentious vote Monday in Austin saw an evolving Senate Bill 2 approved on an 18-12 vote, sending the legislation to the House for more debate. A similar bill has already been in circulation in the lower chamber.

Among various elements of the bill, a key point of contention is a substantially-lowered cap on property tax increases that don’t require voter approval. Right now, taxing entities can increase their property tax rates by 8% without putting the measure before constituents.

SB 2 (and the similar legislation in the House) would trigger an automatic election if officials try to increase property taxes by, at present, 3.5%. The current Senate bill still has a 2.5% trigger for school districts’ tax increases.

Among other things, Stoudt is perturbed Texas lawmakers are blasting Washington for micromanaging at the state-level then trying to exert the same control at the county and municipal level.

“Austin is turning right around and wanting to tell the cities and counties how to run our business. If you don’t like the way the cities and counties are running their business, you un-elect the people,” he countered. A drastic reduction in the rollback cap will hinder taxing entities’ ability to fund operations at the same rate as growth. “You have to be more sensitive to the cities and counties because that’s the revenue they rely on to provide the services everyone expects from a city and county.”

District 7 Representative and former Longview Mayor Jay Dean says he’s sensitive to the impact the proposed legislation would have on municipalities.

Dean’s keen to dig to review the Senate’s bill and chart a path forward for the legislation.

 “Quite frankly, we haven’t even really seen it, just heard bits and pieces,” he said earlier this week. “What I hope to see, when everything does shake out, is exactly how we can continue to extend local control but also try to consider the property taxpayer in how we can support not just true tax reform but also true tax relief.”

The bill is linked to others, the former Longview mayor noted, and all those interconnected elements need to be explored. He anticipates progress in the coming week.

Meanwhile, area officials are in regular communication about the proposed legislation, trying to get a handle on what the local impact could ultimately be.

“There are number of things that are going to take place that affect cities and counties. One will be the viability of economic development. Giving tax abatements as incentives for companies coming to town will probably be greatly reduced,” Stoudt said. Likewise, “This bill will reduce the ability of cities and counties to let revenue generate through just regular growth. If you grow, you will basically be penalized. That’s what it’s set up to do. If you go over a certain amount you have to drop your tax rate.

“Maybe I’m not as smart as those people in Austin. I think this is a bill that, if not done properly, it could be one of the worst bills ever passed for cities and counties in our entire state.”

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