Former Austin city councilwoman believes new tax law will bring relief to residents

By Chris Lang | Feb 19, 2020 published in Austin News

A former Austin city councilwoman likened a new Texas property tax law to a household budget that most responsible homeowners learn to manage at some point in their lives.

Ellen Troxclair, who served from 2015-2019, said the 3.5-percent property tax cap, barring a public referendum to exceed the limit, will reduce waste and bring relief to taxpayers in Austin and across the Lone Star State.

“[The law will] really improve efficiencies, transparencies and accountability to make sure that residents are getting the best return possible on their money,” Troxclair told Austin News.

Now a senior fellow at the Texas Public Policy Foundation, Troxclair recalled her time on the Austin City Council to provide an example of the new law's benefits.

For decades, Texas municipalities could raise property taxes to 8 percent each year, resulting in a doubling of the revenue source after nine years, creating a burden on residents.

“If you think about yourself, how many people do you know getting a pay raise at 8 percent every year no matter what the economy is doing,” Troxclair said. “This change will be more in line with people’s ability to pay [their property taxes].”

Austin is one of the municipalities that has taken advantage of the looser tax laws. The city’s last five budgets raised property taxes between 5.5 and 8 percent.

“Previously, they just had a blank check and that 8 percent was really generous. Now I think it will make cities and counties take a hard look at their budgets for what they need and don’t need, what’s working well and what they could improve,” Troxclair said.

Texas Gov. Greg Abbott signed the 3.5-percent tax law in June after prior attempts failed in the state legislature. Texas joins a host of states, including New Jersey, to implement similar property tax restrictions. The cap does allow for certain exceptions.

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Part of the reform gives voters more power to determine a jurisdiction’s property tax. Local officials will now have to ask voters to exceed the 3.5-percent threshold. Previously, residents had to petition the local governing authority to hold a public vote to lower property taxes.

Soon after Abbott signed the law, Austin Mayor Steve Adler was not sure how the city government would meet the initial budgetary requirement.

“If we’re being responsible and prudent, it’s certainly something we have to consider,” Adler told the Houston Chronicle. “If only to create extra reserves so that the cuts – so the next three years aren’t felt all in the same year. So that we can transition.”

The state capital is operating with a $1.1 billion general fund budget and a $1.2 capital project spending plan.

“If the city thinks that it needs more money, make that case to the taxpayers,” Troxclair said. “It will be interesting to see if the city actually tries to while the people are struggling to live here.”