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TX Cities Attempting End Run Around Limits on Recently Passed Limits on Property Tax Growth

they skipped the Commissioners Court meeting
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Two Harris County Commissioners Court members skipped Tuesday’s meeting, preventing the Democratic majority from voting on a property tax hike that would increase county revenue by 8 percent.

The no-shows by Republican commissioners Steve Radack and Jack Cagle mean the county will revert to the effective tax rate for the upcoming fiscal year, which will result in $195 million less than the rate Democrats had proposed, according to county budget analysts.

Texas law requires a quorum of four members, rather than the usual three, to decide tax rates. That exception provided rare power to Radack and Cagle, who repeatedly have lost close votes to their three Democratic colleagues this year.

Tuesday’s no-vote was the culmination of four weeks of sparring over the tax rate since the three Democrats — County Judge Lina Hidalgo and commissioners Rodney Ellis and Adrian Garcia — proposed the hike Sept. 10. The trio dismissed the quorum break as a childish stunt. The Republicans, in absentia, claimed a win for taxpayers.

“The residents of Precinct 4 elected me to represent them. They did not elect me to lord over them or to repress them,” Cagle said in a statement issued after the meeting began. “This is the taxpayers’ money, not the government’s.”

The proposal would have increased the county’s overall property tax rate to 65.3 cents per $100 of assessed value, up 2.26 cents from the current rate. The measure would have added 1.1 cents to the flood control district’s tax rate, 0.8 cents to the hospital district and added 1.7 cents to create a “financial stability” or rainy day fund. Some of those increases would have been partially offset by reductions in the tax rates for the debt service of the county, the flood control district, the hospital district and the Port of Houston.

Politically, the tax rate fight has high stakes for both sides. Less than a year after taking power, Democrats put themselves on the record supporting a large tax hike, but were unable to pass it. The Republicans scored a short-term victory with their supporters — who urged them to take a stand — but one that leaves them vulnerable should the dip in revenue force the county to cut services to residents.

Cagle said at previous meetings that county residents deserved a break, especially since Commissioners Court decided against cutting taxes after Hurricane Harvey because of uncertainty about how long the local economy would need to rebound. He proposed on Sept. 10 the county increase only the portion of the tax rate dedicated to the Harris County Flood Control District; that motion was defeated on a party-line vote.

The Democrats said the tax hike, which would have been the first since 1996, was needed to prepare the county for a looming Texas Legislature-imposed cap on property taxes, which starting in January will limit year-over-year revenue growth to 3.5 percent in cities and counties. Increases beyond that limit will require voter approval.

Hidalgo said the cap will hamper the ability of fast-growing areas like Harris County to provide such services as transportation, health care and flood control infrastructure. She had hoped to use some of the increased revenue to create a rainy day fund to prepare for future funding shortages. Now, she said, Commissioners Court soon will face tough spending choices.

“I hope that folks will be remembering this day and will be pointing back at it, because it truly is a very disappointing and dangerous decision,” Hidalgo said.

Frayed relations

Commissioners courts in other large Texas counties, including Dallas and Travis, opted to increase property taxes ahead of the cap. Ellis cast himself and his fellow Democrats as making the responsible, though unpopular choice to propose doing the same.

“Any idiot can pass a tax cut,” Ellis said. “The tough thing to do is bite the bullet.”

Based on an average county home value of $230,000, the property tax hike would have increased the average homeowner’s bill by $38 in the first year. Instead, reverting to the effective rate will decrease that bill by $30. Those estimates, prepared by county budget office, do not factor in increases in a home’s appraised value.

Tuesday also marked a nadir in the relationship between the court’s Democrats and Republicans, which already had grown bitter at times, with members attacking each other at the dais.

When Hidalgo gaveled in the session at 10:03 a.m., the seats of Cagle and Radack remained vacant. A staff member for Cagle placed a two-foot stack of constituent comments at his place on the dais, indicating their widespread opposition to the tax increase.

In a midday telephone interview, Cagle said he was so distrustful of his colleagues he would skip the entire meeting, not just the discussion of the tax rate, out of a fear the Democrats would declare a quorum and pass the tax hike should he set foot in the chamber.

Cagle took particular issue with a comment by Garcia, who after the meeting began criticizing the Republicans for missing a resolution commending the bravery of Sandeep Dhaliwal, the sheriff’s deputy slain Sept. 27. Members of the Houston’s Sikh community were in the audience.

“To imply I was disrespecting them — that is the action of a pompous cad,” Cagle said.

Radack said he was exercising a power granted to commissioners to prevent the tax increase, which he described as “absolutely absurd.”

Residents divided

Though unable to hold a vote, court members listened to more than three hours of testimony from residents divided in their support for the increase.

Marcie Mir, CEO of the east Houston health care center El Centro de Corazon, said many of her patients also seek care from county provider Harris Health Systems, which would benefit from the tax increase. She said additional funding could cut wait times for crucial treatments.

“There is nothing like having to tell a patient that her results have come back positive for cervical cancer, and the referral will take three to six months,” Mir said.

Several opponents of the proposal said if an annual revenue increase above 3.5 percent is needed, voters would approve it. They cited the overwhelming passage of last year’s $2.5 billion flood bond in which 85 percent of voters agreed a property tax increase was justified to protect the county from future storms.

The proposal before the court Tuesday, they argued, would fail if put on the ballot.

“This tax rate hike… is not (only) poor fiscal policy on residents of a city and county who are still hurting after two major floods, Harvey and Imelda, but this tax rate hike is theft,” said resident Jason Rowe.

During the testimony, the Democratic court members directed much of their ire at State Sen. Paul Bettencourt, the Houston Republican who was an architect of the property tax reform bill that imposed the revenue cap on local governments.

Hidalgo called the measure “draconian” and said it would leave the county vulnerable in the next natural disaster or economic downturn.

Bettencourt, whose posts on Twitter during the meeting indicated he was paying close attention, said in a statement he was pleased the Republican commissioners saved residents from what he described as unnecessary taxation.

To see this article and others by Mr. Despart and from the Houston Chronicle, click read more.

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Source: Radack, Cagle skip meeting, blocking Dem-led effort to raise Harris County tax rate – HoustonChronicle.com