Georgetown Councilman Steve Fought has a proposal to partly reform the property tax system. This was published in his newsletter which is available by subscription here.
"School Property Tax Cap and Eventual Exemption
In the last newsletter, I raised the possibility of expanding the concept of "frozen" property taxes for over-65 or disabled taxpayers.
Let me recap the proposal. The issue concerned "frozen" property taxes for residents over the age of 65 or disabled. What I offered was that I believed "frozen" property taxes worked very well, and as intended. They go a long way toward enabling older folks with fixed incomes, or disabled, to remain in their homes. But, given the recent rise in property values, they really don't go far enough, and I would modify the program.
What we often find today is that by the time folks reach age 65, the school property tax is so high that, even when it's "frozen" it's hard for people on fixed income to keep pace with the overall cost of living over the years and, eventually, they are driven out of their homes. Something has to give.
What I proposed was to keep the freeze in place at age 65, but to drop the School Property Tax rate to 50% of the original rate at age 75, and then drop it to zero at age 85. The mantra would be "School Property Tax: Pay it Forward, but Don't Pay it Forever". I think that would be a great, and logical, next step to property tax reform in Texas.
By the way, I sent a letter explaining this proposal to Senator Schwertner and Representative Wilson. I received a very nice, detailed and personal, response from Senator Schwertner. It was obvious he had read the proposal and given it careful consideration. He assured me he would give it to his staff and it would be considered along with other aspects of tax reform in the upcoming legislative session. No promises, but I was very pleased with his prompt and thorough response.
I also got quite a few e-mails from readers of this newsletter along with phone calls, and extended conversations at the gas pump. Nearly all positive I might add. With quite a bit of encouragement, and one correction.
The correction is simple, and necessary. "Frozen" isn't the right word. The tax isn't frozen, per se. It can change if you improve your property (it can go up). It can also decrease if the assessment of your property goes down. So, "capped" is a better term than "frozen". I'll buy that.
There were numerous other considerations and comments which were e-mailed in. I'll consolidate the major ones and list them here before I get to the punchline.
- Don't forget that property tax is actually reset every time the property is sold, so it's not "frozen" forever, any tax increase is just delayed until the owner sells.
- A homeowner over the age of 65 is a cash cow for the school system. We pay into the system and place no demands on the system.
- Somebody 65 has been paying school tax for 45 years. My goodness, somebody 85 has been paying school tax for 65 years. Enough is enough!
- Most people over 65 are on fixed incomes, which rarely are adjusted for inflation. So inflation eats away at their purchasing power, while at the same time the costs of services goes up. These people gradually expend their "nest eggs" and, with life expectancy being longer than it used to be, they eventually find themselves destitute.
- People in their retirement years worked hard and saved up in order to be able to take care of themselves once they exited the workplace. They need to be allowed to gracefully age in place, not be run out of their homes by taxes.
- I am willing to pay for my children's education. I am willing to pay for my grandchildren's education. I am willing to pay for my great grandchildren's education. Your's too. But after that, I'm done. Three generations of school tax is enough. Pay it Forward, but Don't Pay It Forever.
- There were lots more. Some more colorful than others! But I'll end there.
So now, what to do about all this? I suggest a grass roots action to get the change we want. Let's start with letters to our Texas legislators. If we start the ball rolling now it may not pass in this session, but it may eventually get enough traction that it will get done. And I think it will.So let's begin now with a letter. I've drafted one, below, which you can use as a start. You can cut, paste and modify to suit your needs. Or you can click here to link to the same document in .pdf format so you can copy it and cut/paste into your word processor and modify it to suit your needs.
You also might forward this to your friends in other locations around Texas. The more the merrier!
Here's the draft letter.
Dear _______
Thank you for serving as my (Senator/Representative). I recognize you are very busy, and are faced with many challenges in the upcoming legislative session. I hope you can find time to consider my concern.
My concern is the same as that of many seniors. When we retire. most of us are on fixed incomes, and/or we are drawing from the "nest eggs" we built during our working years.
Fortunately, and long ago, the Texas Legislature decided to place a cap on School Property Taxes for Texas Residents when they reached age 65 (or were disabled), so they could remain in their homes and "age in place" even though they had fixed incomes. That was a wise decision, and it has worked well.
However, life expectancy is longer now than we ever thought possible. Our "fixed income" retirements don't keep up with inflation, and the "nest eggs" we built in our working years run out well before we pass on, leaving many of us destitute.
But we still have to keep paying those School Property Taxes. Which, by the way, and even though they are capped, are quite high. At some point, we cannot afford to pay those taxes, and we are forced to sell out. Something needs to give.
I would like to see Texas revise the tax policy so that the School Property Tax that was capped at age 65 would be cut in half at age 75, and then reduced to Zero at age 85. The bumper sticker would be simple: School Property Tax: Pay it Forward, But Don't Pay It Forever.
Another way to look at it is, I am wiling to pay for my own children's education. I'm willing to pay for my grandchildren's education. I'm willing to pay for my great grandchildren's education. Somebody else's too. But after that, I'm done. Three generations of school tax is enough.
I think that's fair, and it would be a great next step in property tax reform in Texas, and go a long way toward allowing seniors to age in place, which was the objective of the original legislation.
Thank you for your consideration.
Respectfully,
INDIVIDUAL SIGNATURE
Feel free to use this as a framework and add, delete, or otherwise modify as you deem appropriate. And, of course, forward to your friends elsewhere around Texas. Let's see if we can generate some traction on this.
For those of us who are in this area, here are the addresses of our representatives:
Capitol Address for Senator Charles Schwertner
The Honorable Charles Schwertner
P.O. Box 12068
Capitol Station
Austin, TX 78711
District Address for Senator Charles Schwertner
The Honorable Charles Schwertner
3000 Briarcrest Drive
Suite 202
Bryan, TX 77802
You can also click here for an e-mail link for Senator Schwertner. The e-mail will go to his official e-mail at the State of Texas site.
Capitol Address for Representative Terry Wilson
The Honorable Terry Wilson
Room E2.714
P.O. Box 2910
Austin, TX 78768
District Address for Representative Terry Wilson
The Honorable Terry Wilson
710 Main Street
Suite 242
Georgetown, Texas 78626
You can also click here for an e-mail link to Representative to Representative Wilson. The e-mail will go to his official e-mail at the State of Texas site."
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