Truth in Taxation Bill Passes Texas House of Representatives
Proposal Seen as Major Victory for Texas Taxpayers
Gov. Rick Perry today applauded the Texas House of Representatives on the passage of HB 1006, which provides important protections for Texas taxpayers. Called the Truth in Taxation initiative, it is similar to what Gov. Perry proposed in his State of the State Address in January. The Truth in Taxation initiative will give taxpayers greater protections against runaway local property tax spending and a stronger voice in debates over future property tax increases.
"Passage of the Truth in Taxation initiative is a major victory for Texas taxpayers," Perry said. "The Truth in Taxation initiative ensures greater accountability to the people. Instead of being stuck in the passenger's seat, taxpayers will finally have their foot on the brake when government grows too fast.
"The Truth in Taxation initiative will help ensure that property tax relief is real and permanent for millions of Texans. I applaud members of both parties who voted with taxpayers and for greater transparency in tax and spending decisions."
The Truth in Taxation initiative, HB 1006 by Rep. Carl Isett (Lubbock), has the following major components:
* Prevents local property taxing entities from raising more revenue from property taxes than the previous year unless the entity holds a public hearing and votes to raise taxes. Local entities will be allowed to raise additional funds to compensate for new construction without a public vote; Current law allows for tax increases up to 103 percent of the previous fiscal year with no public hearing and no public vote.
* Requires cities, counties and other taxing entities to hold a public hearing and take a public vote if they want to spend up to 5 percent more than the previous year, or at the taxing unit's option, the rate of inflation not to exceed 8 percent.
* Lowers the tax rollback election trigger from 8 percent to 5 percent more than the previous year's revenues. Current law allows voters to petition for a tax rollback election after an entity raises tax revenues by 8 percent or more of the previous year's revenue. HB 1006 will allow voters to initiate a rollback election when spending exceeds the previous year's spending by 5 percent or more.
* Makes it easier for taxpayers to get a tax rollback election by reducing the number of signatures they must get to have an election. HB 1006 will require voters to get signatures of 10 percent of the number of voters who voted in the previous gubernatorial election. Current law requires signatures of 10 percent of all registered voters - a hurdle so high that few taxpayer groups could clear it.
* Requires any rollback election to be on a uniform election date to eliminate costs associated with holding a special election.
* Allows certain exemptions to the new requirements for junior college districts and small taxing units. The bill also does not apply to school districts because they are addressed separately in a different bill.
"Under this Truth in Taxation initiative, every new dime raised and spent by local government will require a public hearing and a public vote," Perry said. "Instead of relying on the local appraiser to fund government spending increases, local officials will actually have to vote to raise your taxes. Plain and simple, the Truth in Taxation initiative is government for the people, by the people and accountable to the people and that's good government."