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Council approves meaningless tax cut

Such awful policy.

The Houston City Council unanimously passed a nominal property tax cut Tuesday afternoon, the first rate reduction in five years, as the city for the first time runs into a revenue cap imposed by voters a decade ago.

The modest rollback equates to $12.27 a year for the owner of a $200,000 house with a standard homestead exemption. Many Houston property owners will not pay less in overall property taxes, however, as appraisals continue to rise.

The city’s new property tax rate is 63.108 cents per $100 of assessed value, a reduction of about three-quarters of a cent. State law requires the city to adopt its tax rate within 60 days of receiving the certified tax roll, so the approval came Tuesday rather than Wednesday, when the council typically votes.

Officials in Mayor Annise Parker’s administration have said the rate reduction will not force immediate budget cuts because the spending plan the council passed for the fiscal year that began July 1 assumed property tax revenues would not exceed the cap.

However, the cut does mean the city will collect an estimated $12.7 million less than it otherwise would have, and will have that much less on hand to deal with a looming $120 million deficit for the fiscal year starting next summer.

Basically, thanks to the stupid revenue cap, the city is forced to spend $12.7 million and get nothing in return for it. May as well withdraw it all in cash and set it on fire. I’ll say again, I will not support any candidate for Mayor next year that does not support repealing the revenue cap.

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3 Comments

  1. Ross says:

    Kuff, but where do the increases stop? This reduction in rate still means a near 9% increase in my City of Houston tax bill for this year, which is a larger increase than I had in my income, and there will be similar increase next year because I am capped. Is it reasonable for government entities to force their citizens to pay ever increasing amounts, just because the basis for taxes is increasing?

    Parker has done a really poor job of justifying the increase in City expenditure, and hasn’t shown any real effort to constrain spending to the limits she knew were in place.

  2. Steven Houston says:

    Ross, as Kuff points out, the city is facing a major deficit in coming years even if much of the feel good spending is dropped. The cost of city services is going up, just like the cost of all other services is going up in the private sector, so it is reasonable to expect to pay more. Other major cities in the country have income taxes or a wide variety of special taxes to help smooth out costs from property taxes but as much as I agree with you on cutting spending, there is a limit to how much you can cut before actual services are reduced.

  3. Paul Kubosh says:

    I will make a prediction. Any Mayoral candidate that supports a repeal of the revenue cap will not get elected.