March 23, 2005

House Appraisal Cap Debate Called Off
Amid Stiff Opposition, Technical Issues

By Mike Hailey
Capitol Inside Editor

Texas House Republicans who want to lower the state-mandated cap on property appraisals have postponed debate on legislation designed to do that as a result of potentially fatal technical problems and concerns about an apparent lack of votes.

A proposed constitutional amendment by State Rep. Dwayne Bohac had been set for debate on the House floor Wednesday until House leaders discovered a major discrepancy between the measure as its written and the bill analysis on it. The proposed amendment would reduce the cap on appraisals from 10 percent to 5 percent and extend it to commercial property as well as residential. The analysis, however, said the cap would be cut to 3 percent, setting the stage for a point of order that would be difficult to overrule.

Governor Rick Perry has called on state legislators to give the voters an opportunity to slice the cap to 3 percent on valuations set by appraisal districts on homes and businesses as the base for local property taxes. But Bohac and other supporters of lower limitations on appraisals raised the cap to 5 percent as a concession in the face of stiff opposition from Democrats and some Republicans in the lower chamber. Lieutenant Governor David Dewhurst has endorsed appraisal caps at 5 percent, boosting hopes that proponents of the legislation have in the Senate.

The House Ways and Means Committee approved Bohac's constitutional amendment proposal and a bill that accompanies last week in a 5-2 vote. But supporters of the legislation appeared to be taking its critics seriously when they contended again Wednesday that they have the votes to kill the move to put a lower lid on property appraisals.

In a move to shore up support, the sponsor of the appraisal cap package had tentatively planned to offer an amendment that would limit the cap to residential property reportedly. But after protests from business community representatives in Austin, House leaders vetoed the plan to limit the legislation to homesteads and decided to delay a vote instead.

Opposition to the measure is coming from Democrats and Republicans such as State Rep. Fred Hill, a Richardson Republican who's leading the opposition to the legislation on the floor. Hill - once a supporter of appraisal caps - voiced his opposition to the move to reduce them early in the regular session, prompting Speaker Tom Craddick to send the package to the "big" Ways and Means Committee instead of the panel Hill chairs, Local Government Ways and Means. Hill's committee had handled appraisal cap issues until this year.

Bohac and other advocates of lower appraisal caps argue that local tax relief that legislators have promised to approve this year would vanish in a few years if appraisals are allowed to keep going up as much as they have in recent years. Testimony in committee indicated that properly tax levies have increased more than 70 percent in in the Houston area during the past decade. Property taxes collections statewide went up almost 6 percent in 2002.

While appraisal cap advocates point to studies that show Texans paying more property taxes than any other state or local levy, opponents say that lower caps on appraisals will cripple local governments and their ability to provide efficient infrastructure on which business and future economic development depends.

While Democrats are solidly against the legislative proposals, House Republicans appear to be divided more by geographic lines, with a high number of GOP members from the Houston area supporting Bohac's package.