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Travis Commissioners hear testimony on historic abatement changes

Monday, April 18, 2011 by Michael Kanin

The Travis County Commissioners’ Court spent nearly four hours listening to testimony about a proposal to cut county tax benefits associated with historic zoning on Thursday. The room, initially standing-room only, produced mostly historic property owners concerned about what the loss of their abatements might mean both personally and for the region as a whole.


Pct. 2 Commissioner Sarah Eckhardt took a tough line of questioning which sounded like a preference for a needs-based awarding of historic tax abatements. “Some other jurisdictions with historic exemptions, in their needs assessment, they figure out the cost of what the rehabilitation is against the subsidy and grant the subsidy for the time period that it would take to do the renovation,” she suggested.


Despite the event’s focus on taxes for historic properties, the co-chair of the committee that produced the suggestions for reconfiguring historic benefits (See In Fact Daily, April 6, 2011) insisted that his charge was a broader re-examination of tax equity in the county. “The discussion today was on preservation,” said county budget manager and committee co-chair Leroy Nellis. “Our charge of the committee was on tax equity.”


According to Nellis, historic exemptions account for roughly $1.5 million dollars in what otherwise might be county funds. His Local Tax Policy Working Group suggested severely limiting the tax benefits for historic buildings in favor of a larger abatement for Travis residents who are disabled or over 65.


Nellis noted that that group hadn’t seen an increase in benefits since 1994, when the average home value in Travis County was $81,250.  “Since the charge of the committee was tax equity,” he said, “we felt that since the average homestead was $81,250 and somebody in fiscal year ’94 that was over 65 was paying zero … the intention there, we believe was to eliminate the tax on people 65 and older … We believe that the 65 and over exemption has not kept pace with inflation and the intent.”


Nellis pointed out that it would be relatively simple for that group to force a freeze in its tax rate with a ballot question. “We were hoping that the county and the city would begin addressing the disparity of the 65 and older to avoid a petition,” he said. “Georgetown had a petition and won overwhelmingly. Their taxes for 65 and older are frozen and a lot of communities in Texas are frozen.”


In defense of the historic exemptions, landmarked home owners and their supporters argued that the costs of upkeep on a historic home more than outweighed the benefit that they receive in tax relief.


To that, Eckhardt pointed out that she doesn’t “think it would be appropriate for government to subsidize all of your maintenance forever.” She also explained her take on the needs-based abatement.  “Needs-based should not be based on (the question) ‘Can this individual afford to stay on the property?” Eckhardt said.


She offered a theoretical example of a historic farmhouse in New Sweden. “It has a state designation so it cannot be torn down, and yet it gets no tax incentive for its upkeep so it has fallen into disarray because there is a market incentive, actually, to let it disintegrate,” she said. “That is something that I would say … there is a market disincentive to preserve it and that would be a needs-based analysis.” 


Activist Brian Rodgers – a well-known opponent of the tax breaks – gave priced-out homeowners a more simple answer. “If you can’t handle the payments, you’re going to have to move on,” he said.


Rodgers also served on Nellis’ committee. Historic preservation activists pointed this out, along with the fact that no one from their camp participated in those discussions.


For her part, Eckhardt assured historic homeowners that no further action would come without more involvement from their community.

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