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Travis County braces for lean times

Thursday, April 25, 2019 by Jack Craver

Travis County commissioners spent a good chunk of Tuesday morning fuming over state legislation targeting local control, notably a proposal that will sharply limit the ability of local governments to raise property tax revenue.

A bill recently approved by the state Senate, which would cut the maximum effective property tax rate from 8 percent to 3.5 percent, would leave the county $6 million short of what it needs to continue its existing programs in the Fiscal Year 2021 budget cycle. By FY 2024, that shortfall will grow to $30 million.

If the Legislature ends up approving a 2.5 percent rollback rate, as advocated by Gov. Greg Abbott, the shortfall in 2021 will be $13 million and in 2024 it will be $58 million.

To illustrate the potential impact, Budget Director Travis Gatlin put together a presentation visualizing the current year’s budget under the 2.5 percent rate. Under that scenario, the Commissioners Court would have had $18.9 million less on hand.

Where would the county achieve the savings? Staff suggested the biggest cuts would be $4.2 million from road and bridge maintenance, $4 million from law enforcement, $1.8 million from health and human services, and $1.4 million from homelessness and mental health initiatives.

The presentation, County Judge Sarah Eckhardt said, illustrated the devastating impact of the Legislature’s actions on critical programs.

“All of these services are super needed; we don’t have fat in our budget and (legislators) don’t believe us,” she said.

Eckhardt argued the legislation was based on a flawed assumption that local governments are responsible for high property taxes. High property taxes are a choice that the state has made by prohibiting income tax, she said. Overall, the tax burden in Texas is low compared to most other states.

“We are not being taxed to death,” she said. “There is a basic fallacy in the underlying assumption that is driving this political moment.”

Commissioner Brigid Shea said the idea was hardly unique to Texas legislators. Their legislation, she said, was the creation of “extreme right-wing think tanks” that are creating model bills to enact in legislatures across the country. She also accused state GOP leaders of wanting to punish large cities and counties that are largely run by Democrats.

Commissioner Gerald Daugherty, the court’s only Republican, has bucked his party’s position at the Legislature and decried the revenue cap legislation. On Tuesday, he didn’t dwell on his opposition to the bill, but warned his colleagues that it was unlikely the legislation would die, as it did two years ago.

“We’re fixing to make some really hard decisions,” he said.

Said Commissioner Margaret Gómez, “I think we’re going to have a huge educational process with our constituents … to explain and defend whatever gets cut and why it got cut.”

If the legislation is approved this session, the county will be able to put together one more fiscal year budget under the current 8 percent rollback rate before the new revenue cap goes into effect for fiscal year 2021.

Although it has not been common for the Commissioners Court to increase the property tax rate all the way to 8 percent, Eckhardt suggested it may be forced to do so this year if the revenue caps are approved. Raising the maximum amount of revenue allowable this year will allow the county to stash away some funds to use for the tough years that will follow.

Photo by Larry D. Moore [CC BY-SA 3.0], via Wikimedia Commons.

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