BROWNSVILLE, RGV - The mayor of a small town in the Rio Grande Valley has voiced her displeasure at a key piece of legislation passed by the state leadership - property tax reform.
Under Senate Bill 2, municipalities can only increase property taxes by 3.5 percent before having to get the approval of voters. The threshold used to be eight percent. The legislation goes into law on Jan. 1, 2020.
“What they were trying to do and succeeded in doing was limit the cap of eight percent on property tax increases,” Cyndie Rathbun, mayor of Rancho Viejo, told the Rio Grande Guardian.
“With a bedroom community like ours we do not have any other economic way of getting income. If we have to replace all the lights or the sewage system, things like that, we have to do it through property taxes. We have never gone up eight percent but taking away our ability should we need to is detrimental to small communities like mine.”
Rathbun said there always seems to be a push to keep lowering property taxes. “As you know, in Texas there is no state income tax, so most communities get their income from property taxes. My advice to legislators is, we need to approach this very carefully.”
Rathbun voiced her concerns at a legislative wrap-up luncheon hosted last week by the Brownsville Chamber of Commerce. The luncheon was held at the Brownsville Events Center. In the question and answer portion of the event, Rathbun said:
“My question is about property taxes. There are two reasons this is of interest to my community. We are somewhat of a bedroom community. We have very little economy. That is something I am working to change. However, we have very few resources in order to provide services to our community. Runaway property taxes are of interest to the state but in my community it is the only way we can give goods and services to our community. I know it is a very complicated problem. It affects the smaller cities like mine.”
All three legislators on the panel addressed Rathbun’s point.
State Rep. Eddie Lucio, III, of San Benito, said:
“When the proposal for property tax cuts was presented to the legislature, it was at first a partisan issue. It was driven by the Republican leadership. The Democratic narrative on that was this is a local control issue, we should allow the local governments to make the decisions on whether they are going to increase or decrease taxes, or keep them the same.
Rep. Lucio said support for property tax reform seemed to be gathering steam.
“It was at that point that we (Democrats) had to play defense. This is my perspective. My colleagues may think differently. We wanted to create reasonable reform as opposed to a broad stroke reform that would completely hamstring your ability to continue to operate at the local level. That was an issue that was at the forefront of the leadership’s agenda. Something that was going to happen with our without our engagement. Ultimately, a handful of Democrats got engaged and we were ultimately able to contain what ultimately occurred.”
Rep. Lucio was referencing that the initial plan by the Republican leadership was a 2.5 percent threshold.
“On the opposite side of this issue, it is a hard conversation to have with voters. Voters say, absolutely you should vote for property tax reform. It is hard to explain to them that that lack of revenue for your local government may mean that your roads are not going to get fixed, your parks are not going to be maintained, your trash is not going to get picked up on time, your law enforcement officers are not going to get paid. It is a conversation that is not going to end anytime soon. So, we better be prepared collectively next session to go back to Austin and assure them we have all of the resources available for our local governments. Mayor, that is the reality of that situation this past session.”
State Sen. Eddie Lucio of Brownsville addressed Mayor Rathbun’s concerns this way:
“It became a true bipartisan issue when we tied public school finance to property tax relief and we had to pass it at the same time. I served on the committee and I did travel extensively throughout Texas with a Senate committee on property tax reform. I can tell you it was standing room only, everywhere we went. There was a lot of concern.”
Sen. Lucio urged Rathbun and other cities to wait and see how things turn out.
“We hope that it has a positive reaction. I do not think our work finished last session. Our work has only just begun. Appraisal districts is another issue we are going to be visiting. We have to make sure we have a balance. When you have a tax rate and it is lowered by the county or the city, you want to make sure that your evaluations do not go sky high and you are still paying more taxes. That is the concern of many.”
State Rep. Alex Dominguez of Brownsville also responded to Rathbun’s remarks. He said his experience as a former county commissioner in Cameron County gave him good insight into the issue of property tax reform.
“Your concerns are not lost on us,” Dominguez told Rathbun. “I had a number of conversations, given my past county experience. What I was trying to explain to members who have been here a lot longer than I have was that their approach was not going to achieve the relief they were hoping for. But there were such overwhelming numbers on the opposite side of the aisle to pass this bill. We knew the governor was making trips to the floor to get people in line, not so much the Ds but some of the Rs who were kind of wobbling.”
Dominguez said he was once invited into the speaker’s office to discuss property tax reform.
“At one point I was in the speaker’s office, sitting down with him and his chairman to discuss my position. He understood I had a big county background. I said, look, you are going after the wrong thing. You should be looking at how quickly appraisal districts can reappraise a property and increase its valuation. If you really want to slow things down, maybe you slow down the number of years in between evaluations but that was not part of the bill.”
Dominguez said the mindset of the Republican leadership was clear: legislation limiting the ability of cities to raise property taxes was going to be curtailed. He said he got his staff to take a look at how often, historically, governmental units in Cameron County have increased their taxes and by how much.
“The initial bill was going to put a cap at 2.5 percent, which we thought was untenable. Eventually it became quite a bit more. In our research we found out there really weren’t any governmental entities in Cameron County, including your city, that ever reached that threshold. Even though we had a cap at eight percent, we never even got close to it,” Dominguez said.
“I said, look, I fundamentally disagree with this but I know you have the numbers. I am willing to be supportive if you will allow me to have this one amendment. I think I was one of the very few Democrats to get an amendment added to that bill.”
The amendment Dominguez was able to add onto SB 2 said that anytime there is a declaration of emergency in Cameron County, the county and any other governmental entity within the county can increase property taxes up to eight percent.
This amendment was added, Dominguez said, so that cities and counties can rebuild roads or buildings that have been destroyed.
“The rate at which Cameron and Hidalgo counties get hit with disaster declarations, they are kind of perpetual. So, I don’t think Cameron or Hidalgo County are going to be affected as much as those like Harris County or those in the Panhandle. I think we are going to be okay and you should still have the resources you need. That does not mean we should shy away from it. When the next legislative session comes, let us know what your experience has been and let’s see if we need to tweak that a little bit,” Dominguez told Rathbun.
Editor's Note: The main image accompanying the above news story shows Cyndie Rathbun, mayor of the Town of Rancho Viejo, Texas.
