Will Georgetown City Council Try to Raise Property Taxes?

The big unanswered question circulating around Texas is whether or not the Governor's disaster declartion allows cities and counties to exceed the 3.5% tax increase limit imposed last year.

The state legislature implemented new caps on property tax increases, found in Senate Bill 2 which passed during the last legislative session, for the local taxing entities: 3.5 percent increase cap for cities and counties and a 2.5 percent increase cap on school districts.

Section 26.07 (b) of SB 2 reads, in part, when seeking an increase deemed necessary in response to a disaster, with exception for a draught, “and the governor has declared any part of the area in which the taxing unit is located as a disaster area, an election is not required under this section to approve the tax rate adopted by the governing body for the year following the year in which the disaster occurs.”

The disaster declaration reinstitutes the eight percent limit as the presiding cap rather than those set by SB 2, according to the Legislative Budget Board, but it only applies to the counties and cities.

Thus, to trigger an election from the voters, a tax rate increase would have to yield eight percent higher total revenue than the previous year.

School districts will still be held to the 2.5 percent cap.

The Governor has said he is looking into the issue and the Lt Governor believes the caps remain in place.

Time and maybe the courts will tell.