As the Texas Legislature’s special session begins Tuesday, Waco-area leaders are bracing for what they see as an assault on local power to tax, regulate and annex.

Of 20 items Gov. Greg Abbott has called on the Legislature to consider in this session, eight involve curbing local control.

Aside from must-pass legislation reauthorizing several state agencies, Abbott has marked property tax reform as his top priority. That could involve further restricting the tax increases that local governments are allowed without voter approval, and limiting spending to a formula using inflation and population growth.

In a letter that will be sent Tuesday to Waco-area legislators, Mayor Kyle Deaver decried such proposals as counterproductive and harmful to Waco’s economy.

“While Waco works hard to maintain low growth in spending, such a cap could severely limit our local elected officials’ abilities to make crucial decisions impacting city services and thus the health and growth of our city,” Deaver wrote.

The Legislature has considered proposals to limit tax revenue increases to 4 or 5 percent a year unless voters approve the increase.

Currently, voters are allowed to petition for a “rollback” election if the increase exceeds 8 percent.

City officials note that Waco’s tax increases in recent history have come nowhere close to the 8 percent rollback rate, and are generally below the 4 to 5 percent cap.

Still, City Manager Dale Fisseler said, the tax caps would distort local budget decisions and could pressure local government boards to maximize their permissible tax rates every year to hoard money for a rainy day. Others may choose to shift spending from cash to debt, he said.

“You end up having to do a lot of things that may not make sense so you can defend yourself against the rules,” he said. “There’s a lot of unintended consequences that I don’t think the Legislature has thought out because they have not talked to cities.”

County Judge Scott Felton has also sounded alarms about the revenue caps.

In a Tribune-Herald interview in April, he noted that Waco’s state senator, Brian Birdwell, R-Granbury, has supported revenue caps but has done nothing to lift the burden of unfunded mandates on local governments.

Birdwell’s office did not respond to requests in the past week seeking comment on the special session.

State Rep. Charles “Doc” Anderson, R-Waco, said Monday that he’d be open to considering revenue and appraisal caps.

“I’m getting a tremendous number of calls, particularly in McLennan County, about appraisals and tax rates,” he said.

Anderson said he wants to weigh the legitimate concerns of school districts, cities and counties against the needs of the taxpayer.

“We definitely need to look at it from the taxpayers’ standpoint,” he said. “There seems to be the building of frustration of taxpayers.”

The city and other local governments have opposed legislation that would cap the property tax increase on owner-occupied homes at 5 percent per year, down from the status quo of 10 percent, saying it would lead to inequities in taxation.

Other Abbott priorities that would clip the wings of local governments include:

  • Nullifying local-level ordinances on tree protection and texting while driving, ordinances that don’t exist in Waco.
  • Speeding up local government construction permitting and preventing government from changing rules while a construction project is underway.
  • Further restricting cities’ ability to annex land in their extraterritorial jurisdiction by requiring a vote by residents who would be affected. In the regular session, state Sen. Birdwell was a co-author of a bill, SB 715, that would have done just that.

Waco city leaders argue that such a requirement would hinder a growing city’s ability to plan and invest in the future.

“As areas in our ETJ begin to consume city resources, they need to be part and parcel of the taxpaying base of our community to fund and support the services they’re going to be requiring,” said Councilman John Kinnaird.

Kinnaird said legislators have taken an increasingly “dangerous tone” in taking away powers from local government leaders, whom he sees as more accountable to communities than officials at the state level.

Kinnaird said the Texas Legislature is attempting to shift the blame for high property taxes onto local governments, but the local tax burden has increased because the state has picked up less and less of the tab for education.

“When it comes to revenue caps, that’s really misdirection on the Legislature’s part to show they’re doing something to alleviate the burden on property taxes without addressing the root cause, which is a broken public education finance system,” he said.

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