Houston Mayor Sylvester Turner plans to ask City Council to waive the property tax limit and raise the city’s property tax rate by 8.9 percent. Turner claims that the hike, which would raise the tax rate from 58.64 cents per $100 of valuation to 63.87 cents per $100 of valuation, is needed to cover the damages from Hurricane Harvey.
If the council goes along with Turner’s request, the proposed tax increase would allow the city to rake in about $100 million in additional revenue for the 2017-2018 tax year. Early estimates of Harvey’s cost have the city on the hook for at least $20 million in debris removal as well as the replacement costs for more than 300 city vehicles and repairs to a variety of municipal buildings, including City Hall and two wastewater treatment plants.
The only problem with Turner’s proposal is that it would violate the Property Tax Limit amendment to the city’s charter, an amendment that has been the bane of every mayor since it was approved by the Houston voters.
The “revenue cap” as the measure is often — and erroneously — called stipulates that the city can only raise taxes based on a formula that accounts for inflation and population growth. In practicality this formula limits Houston’s property tax increases to about 4.5 percent per year. However, for the last three years Houston’s property tax rates have increased about 7 percent per year.
Although the Property Tax Limit was approved by voters in 2004, because of various “emergency circumstances” it wasn’t implemented until 2014. Among the emergencies that required city council to override the will of the voters were the 2008-2009 recession and, in 2006, a one-time public safety hiring exemption — which inexplicably led to only a 3 percent increase in HPD officers, fewer firefighters on city payroll and 1,000 more non-public safety employees across the city.
Turner is a long-time opponent of the Property Tax Limit. He used the measure as a foil in his 2015 campaign for the mayor’s office, and as recently as May he was considering putting a repeal measure on the November ballot.
Turner contends that the property tax limit shorts the city’s budget — which it does and was designed to do — and limits the ability to provide services, which it doesn’t. Also, his call for a property tax limit waiver fails to mention the pension and general improvement bonds that are already going to be on the November ballot.
Additionally, even with the limit in place, Houston’s property tax revenue grew by at least 5 percent over the 2016-2017 tax year. Turner’s proposal isn’t just an attempt to open the door for a total repeal of the property tax limit, it’s also bad economics that borders on heartless optics.
At least 30,000 commercial and residential properties and more than 1 million vehicles were damaged by Harvey, more than 1,000 people are still in shelters and the mayor is talking about a tax increase.
It’s an increase that will directly translate to higher prices across the city for everything from a mixed drink to a hammer, higher rent in the apartments that thousands of people moved into after their homes were destroyed by flooding and will make home and business owners scraping to make ends meet rethink staying in the city limits.