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Travis commissioner proposes to delete historic tax exemption

Wednesday, August 25, 2010 by Michael Kanin

Travis County Commissioner Ron Davis has moved abruptly to insert the question of tax exemptions for historic homes into the county’s 2011 budget discussion. His action comes on the heels of the Austin Independent School District’s suspension of such exemptions, and an effort by the City of Austin to cap the number of historic cases that can be heard by various public entities.


Davis’ jolt may be somewhat premature. Though the Travis County Commissioners Court has set up a committee to study the effect of adjusting a number of tax exemptions, including the one afforded to owners of historic homes, its report may not be ready until as late as next spring. Any action on its recommendations is not expected to take effect until fiscal year 2012.


Davis, who represents Precinct 1, was, nonetheless, coy about whether the court would look to affect its tax rate by removing historic zoning from the equation. When asked by In Fact Daily if he thought that the commissioners might try and work the deletion of the historic exemption into the FY2011 budget, he responded, “maybe.”


“We’ll have to see what the rest of the court suggests,” he said. “Right now, I’m just one member of the court.”


His suggestion came as the court tried to pass a handful of mundane items that related to its advertisement of the county’s pending tax increase and state-mandated public hearings associated with it. There, almost immediately, Davis referenced the school board’s decision and began a line of questioning that sought to probe the possible effects of a similar move by Travis County.


County Judge Sam Biscoe stamped out his attempt to jump-start that discussion by asking whether or not the commissioners could go where Davis wanted them to, considering the fact that the topic hadn’t specifically made their agenda. A re-post could occur as early as next week.


At a break in the commissioners’ proceedings, county budget officer Leroy Nellis told In Fact Daily about the progress of the exemptions study. “That group is formed and we’re working on it to come back to the court with recommendations…we’re looking at probably (delivering) those recommendations in late fall, early spring,” he said.


He added that, as he understood it, the court was not expecting to take any action until FY2012. “Unless the court reverses its position…which I don’t anticipate,” he said.


Nellis later noted, as he had before the court, that a county suspension of the historic zoning exemption would not automatically increase its revenue. Instead, he explained, because the deleted exemptions would be refigured into the county’s cumulative property value—an action which would happen before taxes were assessed—the move would reduce the effective tax rate.


That number is the amount of tax that a county or municipality has to charge to collect the same amount of tax revenue it saw in the previous fiscal year. It is also the limit of what any Texas municipality or county can charge before having to schedule public hearings on the matter.


Nellis further noted that things don’t work the same way for city schools. “The school district is different…they receive more revenue (directly) when they (remove exemptions),” he said.

Although AISD will receive $1.8 million in additional revenue by eliminating the exemptions, the district will get to keep less than $100,000. Because of the state’s attempt to equalize funding in rich and poor school districts, the rest of the money will be passed on to the state.

According to Nellis, the county honored roughly $1.075 million worth of historic tax exemptions in 2010. The City of Austin took in about $1.05 million for the current year because of the same program.

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