News

Capitol Update: The Texas Taxpayer Transparency Act

May 4, 2019

This week the House passed SB 2, the Texas Taxpayer Transparency Act. If signed into law, taxpayers will be provided with information on who proposed to raise their property tax rates, the amount their taxes increased, and where and when they can go to ensure their voices are heard.

Every homeowner deserves to know why their property taxes increased, and this piece of legislation will ensure property owners have the tools they need to make informed decisions about their property taxes.  SB 2 would require an election if a taxing unit proposes a tax increase of more than 3.5% and 2% for school districts.  This gives taxpayers control over how much their tax rates increase.  Should there be a meaningful reason, then local governments can make the case to their citizens.

The bill’s intent is to establish a more transparent and open process that is beneficial for everyone.  The final passage of the Texas Taxpayer Transparency Act is contingent upon HB 3, “The Texas Plan” which addresses school finance reform and public education.  The two bills are nearly impossible to separate, as property tax and school finance reform go hand in hand.  In fact, while SB 2 limits the growth of property taxes and increases transparency, HB 3 will actually lower your property taxes by adding additional state funding for public education.

The highlights of SB 2 are:

  • Lowers the rollback rate to 3.5% for most taxing units and 2% for school districts;
  • Calculates how much one would owe under the proposed tax rates and discloses the “No New Revenue” tax rate for each taxing unit on an individual’s tax notice (like a line-item receipt);
  • Maintains the current rollback rate for special taxing units with unique situations like junior colleges, hospital districts, and those with an M&O tax rate of $0.025 or less;
  • Further enhances tax notices by requiring local governments to include a chart comparing what the recipient paid in property taxes last year versus what they will pay this year;
  • Gives taxpayers the option of filling out a short form—attached to their electronic tax notice—that will generate a message outlining the taxpayer’s stance on their tax rate before automatically sending it to the appropriate taxing unit.

With the passage of SB 2, the House has now accomplished its top three priorities.  The other two were a fiscally responsible budget and a substantial school finance plan.  I’m proud to have voted for all three, which work together to provide meaningful tax reform and relief for Texans that desperately need it.

As the last few weeks of session are approaching, there are many deadlines that the House must meet in order for legislation to advance.  If you have any questions about legislation that has already passed or which is still pending, please contact me at district9.paddie@house.texas.gov or one of my office numbers.  My Capitol office number is (512) 463-0556 and my district office is (903) 935-1141.  It is with your input that I am able to best represent you as we finish the 86th Legislative Session.