If you are following the Texas legislative session this year, I’m sure you’ve heard quite a bit about the Rollback Rate and Senate Bill 2. It’s been a pretty hot topic with the citizens during the campaign. If you’d like a more complete definition of the rollback rate, take a look at the Texas Comptroller’s website: https://comptroller.texas.gov/taxes/property-tax/truth-in-taxation/rollback-tax-rates.php. Mostly when we are discussing the rollback rate, we’re talking about the cap on your property tax increase from the previous year. Currently in the State of Texas, the rollback rate is set to 8%. So your property taxes can increase by 8% from the previous year. A city can still increase property taxes by more than 8%, but they can then be petitioned by their citizens to have a rollback election. If the petition gets enough names, there will be an election where the citizens can decide if they want to accept the higher than 8% increase. If they choose not to accept the increase, then the property tax increase will be “rolled back” to 8% for that year.
Let’s talk about senate bill 2. Actually, before we talk about senate bill 2, let’s talk about the 10th amendment to the US constitution. Just so we’re all on the same page, here is the 10th amendment: “The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.” My opposition has claimed that rollback rate issues should be handled by cities and not by the state. The claim is that this is a city rights vs state’s rights issue and that the state needs to stay out of our business. This claim is then based on the 10th amendment. When I read the 10th amendment, I see three entities listed: the United States, the States (in our case Texas), and the people.
Perhaps the claim could be made that “the people” implies the cities. I believe that is a stretch, but for the sake of argument, let’s consider that assumption valid for a moment. So that brings us back to senate bill 2. Senate bill 2 would lower the rollback rate from 8% to 4%. Now your property tax increase from the previous year would be limited to 4%. Not only that, but if your city (or any other taxing entity) increases your property tax by more than 4%, it would automatically force an election to approve the tax increase. If the proposed greater than 4% tax increase fails in the election, your property tax increase from the previous year will drop back down to the 4% rollback rate increase. This means you don’t have to get a petition together if the rollback rate is exceeded. It will automatically go to the citizens to decide if the city has made a valid argument to increase your property taxes.
Does this sound like the state is coming in and telling us how we can run our city? I suppose that depends on your perspective. In my opinion, it’s the state giving the power to the people. Why do we have a city government? To serve the people. Was the constitution giving powers to the people, or to the cities? Why would our city leaders want to keep the power from the people? I’m not sure, you’d have to ask them. The only reply I can get from them is that they’re trying to keep the state of Texas out of the business of our city government. I see this more as the city government trying to keep the citizens out of the business of the city government.