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County group calls for changes to historic exemptions

Wednesday, April 6, 2011 by Michael Kanin

The deliberations of Travis County’s Local Tax Policy Working Group have produced a series of recommendations that, if enacted, would change the way the county issues tax exemptions for historic properties. Their suggestions include a call for a $75,000 across the board historic tax exemption for 2011, a 10-year limit to the length of time that properties would be eligible for such a benefit, and a mandate that “a substantial portion of the structure must be built before 1930.”

 

As currently structured, there is no limit to the number of years county residents are eligible for historic tax status. That figure is currently determined by a percentage applied to the value of the land and the structures.

 

Travis County Budget Director Leroy Nellis and Dusty Knight from the Tax Assessor Collector’s office delivered these ideas to the Travis County Commissioners Court on Tuesday. They also came with a detailed report examining the use of historic exemptions in the region.

 

Travis County commissioners Sarah Eckhardt and Karen Huber questioned the findings. “The older many historic properties get, the more expensive it is to maintain them,” said Huber, who represents Pct. 3. “I have trouble with the concept of a limitation.”

 

Eckhardt, the Pct. 2 representative, also worried about the implications of the group’s suggestions. “There’s a prime example in my neighborhood of a house that fell into such horrible disrepair even though it was quite clearly historic,” she said. “No one had stepped into preserve it. I think that the historic exemption made it possible for the new owners to consider rehabilitating it.”

 

According to figures provided by the city of Austin, the downtown zip code – 78701 – hosts the most historic landmarks, with 179. Older county figures put that number at 136. For Eckhardt’s zip code – 78703 – the city has 121 historic landmarks, the second most on the list. The county claims only 100.

 

The policy group seemed skeptical of some of the benefits that preservationists argue come with historic zoning. Knight, who works for the County Tax Assessor Collector’s Office, told the court that, even if historic properties increased the value of a neighborhood, it would have little effect on county taxes.

 

“Increasing values really have no effect because (when) the values rise, the tax rate goes down, and you get the same amount of revenues,” he said.

 

Knight also noted that any economic boost that might result from historic properties would have no relevance to the county. “The county does not get any sales tax money off of that,” he said.

 

For its part, the Heritage Society of Austin was concerned about the group’s ability to deliver an unbiased product. In a November letter to the court, society President Courtney Hoffman wrote that her group was “greatly concerned about the process for … (the) Working Group.”

 

“We are dismayed that (it) includes members who are actively opposed to the current program of tax incentives for historic preservation, but there are no members representing the benefits of the program,” she continued.

 

The policy group included Billy Hamilton from the State Comptroller’s Officer, frequent local government critic Brian Rodgers, Dick Lavine from the Center for Public Office Policy, Joe Thrash from the Attorney General’s office, John Stephens from Travis County Central Health, Elliot Beck from the Travis County Attorney’s office, Travis County Auditor Susan Spataro, Travis County Intergovernmental Affairs Coordinator Deece Eckstein, Travis County Corporations Manager Harvey Davis, Nellis, and Knight.

 

They offered eight recommendations relating to the historic tax exemption. In addition to those listed above, the body also suggested that the court implement a policy that would allow it the flexibility of setting the exemption rate to $0 for any given year moving forward.

 

The group added that the revenue returned by their suggestions should be used to boost the property tax exemptions for county residents who are over 65 and/or disabled. That population hasn’t seen a benefit increase since 1994. The policy group suggested raising their exemption by $10,000 to $75,000.

 

So far, the county has accepted city designation in determining what properties or structures receive tax relief. As part of its report, the committee also suggested that there is a need to expand that program into regions not inside the city’s jurisdiction.

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