The Chronicle‘s Dan Feldstein reports that property tax collections in Houston may soon exceed what is allowed under Proposition 1:
Houston homeowners could get a tax break as early as next year because of a revenue cap voters approved two years ago.
In a twist of circumstances, however, the relief likely will come from a cap supported by Mayor Bill White rather than from a competing measure that supporters said would be more effective.
Tax activists thundered against White’s Proposition 1 when he wrote it to counter their Proposition 2, saying he was trying to fool voters.
Proposition 2 mandates that total city revenue collections — from property taxes, sales taxes and all other sources — cannot exceed the previous year’s total plus the rate of inflation and population growth. If they do, taxpayers get a rebate.
Proposition 1 puts a loose cap on water rates and hones in on property taxes. Under its rules, City Council must set a property tax rate each year so that collections don’t rise more than 4.5 percent or the rate of inflation plus population growth, whichever is lower.
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With only two months left in the city’s fiscal year, estimates show a 4.9 percent rise in property tax collections, busting Proposition 1’s 4.5 percent cap. That means this fall, when Council sets a new tax rate, it will have to roll back its base collection number, and that could mean a mandated tax rate cut, White and City Controller Annise Parker said this week.
Feldstein is correct to note the “twist of circumstances.” Although advocates of limited government generally have good reason to fear the creativity of municipal officials when it comes to new revenue streams, the fact is that runaway appraisal creep is much more of a pressing problem. At one time, Dan Patrick and the CLOUT activists were dismissed as cranks for calling it a pressing problem. They’re not dismissed so easily these days.
Whatever Bill White’s motivation for supporting Proposition 1, taxpayers can certainly thank the mayor for any relief it provides.
