I have mixed feelings about this.
Rep. Sarah Davis
Owners of nearly 300,000 homes damaged by Hurricane Harvey in Texas won’t see any break in their property taxes because of political wrangling this year in the state Legislature over completely unrelated issues – including, one Houston Republican says, the bathroom bill.
A property tax reform bill that would have required all local governments to reappraise damaged homes and businesses and lower the tax bills came within a single round of votes on four different occasions. If the mandatory reappraisal proposal had become law, it would have all but assured that the tens of thousands of homes and businesses damaged or destroyed statewide because of Harvey would have received a reduction in property taxes this year.
But it never passed, and according to the state lawmaker who came up with the idea, it’s because of the bathroom bill. Rep. Sarah Davis, R-Houston, lays the blame on Lt. Gov. Dan Patrick, who she contends was trying to blackball her bills.
“I have little doubt its slow death in the Senate is because of social issues like the bathroom bill,” said Davis, whose district flooded badly during the 2015 Memorial Day storms and the 2016 tax day storms.
Currently, reappraisals after natural disasters are optional for local governments and most are like Harris County and Aransas County in saying they won’t do it because they cannot afford it.
A home in Houston that was valued at $200,000 before the hurricane, but worth just $30,000 after, would have seen a $700 cut just in school taxes, according to the Texas Taxpayers and Research Association, which strongly backed the Davis proposal.
“It was really one of my No. 1 priorities,” said Davis, whose original bill would have taken effect Sept. 1.
But that is likely why the bill never cleared the Senate, she said. Davis was a vocal opponent of the so-called bathroom bill that was a top priority in the Texas Senate.
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Texas law already allows counties, cities and other local governments to reappraise properties after a storm, but few ever do because of the lost revenues that it could result in and because of how expensive and time consuming the reappraisal process could be during a time governments are trying to finalize their budgets. If governments do the reappraisals, the full cost is on the local governments.
“It’s not a very workable solution,” Harris County Judge Ed Emmett, a Republican, said about why he has not voluntarily called for the reappraisals in Harris. “It’s not that I don’t have sympathy for people and what they’ve lost.”
He said the problem is the reappraisals would cost $10 million in a county as big and urban as Harris County. Plus the county would lose revenue from tax collections at a time it most needs the money to address the natural disaster recovery.
He added that property owners still will get the benefit of the Jan. 1 appraisals for the next year’s taxes. That almost certainly will result in lower tax bills for homeowners with damaged properties next year.
Similarly, in Aransas County – where Harvey made landfall as a Category 4 and demolished 36 percent of all homes and businesses – there will be no reappraisal. Aransas County Judge C.H. “Burt” Mills Jr. said there isn’t time or money to get it done and said it would only hurt tax revenues at a time when every source of funding the county relies on is in jeopardy.
“All of our income is in the toilet,” Mills said of a county that relies heavily on tourists to generate sales taxes and fill rental properties.
Let’s start with the obvious. Of course the bathroom bill was the reason why this bill never got a vote in the Senate. This is how Dan Patrick operates. You can admire his hard-nosed tactical consistency, or you can bemoan his willingness to sacrifice the greater good in service of his narrow partisan interests, but you can’t deny the premise.
I certainly get the impetus for Rep. Davis’ bill. Though all the activity on this came before Harvey, Davis represents neighborhoods that were hard hit by the floods of 2015 and 2016. Giving people whose houses have been greatly damaged or destroyed a break on their property taxes has a lot of obvious appeal. That said, I agree with Judges Emmett and Mills. The counties – and cities and school districts – that these houses are in will be facing large extra expenses as a result of the disaster in question, and they’ve built their budgets for the year based in part on the original values of those houses. When the houses are reappraised for the next year, everyone can plan their budgets based on the expected lower values. Is the benefit of an extra year’s lower tax bill for affected homeowners worth the cost?
There is, of course, a simple enough way to resolve this: Have the state cover the difference. We agree that homeowners whose houses have been devastated deserve a break. We agree (I hope) that the cost of that break should not be a burden on counties and school districts that are themselves recovering from the damage of the natural disaster. The amount in question would be a relative pittance for the state. Why not let the state budget make the affected local government entities whole? Because that’s not what we do. Dan Patrick and his buddies take from the locals, they don’t give back. They’d be more than willing to take the credit for the cut, but it’ll be a cold day in August before they’d be willing to bear the cost. I appreciate what Rep. Davis was trying to do with her bill, but without this I can’t quite support it.