Understanding the Texas Legislature and Property Taxes
“Go see Ralph Williams.” That was my editor’s advice back in 1982, as I began covering the West Virginia Legislature. No explanation. Just a name — and the clear implication that if I wanted to understand how the place really worked, I needed to meet one man.
At the time, Williams was a state senator and chair of finance. I went to see him. It didn’t take long to understand why I’d been sent.
“I’m just a country boy,” he told me. “I’m bald-headed. I got all my teeth, and I’m fat. I don’t run around with loose women. I don’t drink liquor at all, and I suffer from an incurable disease called the gout.”
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I did a profile on him and realized why he was recommended to me. He ran things. He handled tax laws and the state budget. No other senator had that kind of power over the purse.
Perhaps this explains why I keep going back to Texas State Sen. Paul Bettencourt, R-Houston. He’s the Ralph Williams of the Texas Legislature, except for certain he’s not bald.
For years, Bettencourt, like the West Virginia senator, has patiently explained the complexities of state money issues so I could pass this information on to you.
I visited Bettencourt recently to ask the main questions I keep hearing from readers.
Bettencourt is the state’s top property tax expert. He writes the bills that change the rules.
And because cutting property taxes is priority one for Gov. Greg Abbott’s reelection campaign, Bettencourt will stay busy.
The governor has said his goal is to eliminate school property taxes, a tall order considering that for most of us, school property taxes comprise more than half of our annual tax bill.
The three questions readers keep asking me:
Why wouldn’t we raise sales taxes to offset school taxes?
What happens to school funding when the surplus runs out?
Are property tax cuts a back-handed way to destroy public education in Texas?
These questions deserve answers. Time to talk to Bettencourt.
Sales Tax: A Viable Solution?
If the state were to replace property taxes with an increase in sales taxes, today’s 6.25% state sales tax would increase to 25%, he says. He called that catastrophic.
Even if you only eliminated the school tax, the sales tax would still jump to 15%.
“We’re not going to raise taxes to lower taxes,” he says.
Plus, Texans would drive to neighboring states to buy big ticket items like washer/dryers.
“That’s why bumping sales tax up to double digits is just not feasible,” he explains. “It’s not good public policy.”
The Surplus Story
The state has been living off large surpluses, giving lawmakers opportunities they otherwise might not enjoy.
I ask, what happens when the surpluses go away?
Bettencourt gives a quick lesson on surpluses: “The feds handed out COVID money like popcorn, OK? And that happened all over the country. So a lot of jurisdictions spent it. The ones that made the mistake spent it on existing operating costs and not one-time expenses.
“Now we avoided that. So there is a surplus there. A surplus is the amount of money we think we’re going to have as excess in the treasury.”
Shaving property taxes depends on the surplus, he says.
Bettencourt can’t say for sure where the money will come from. But he favors tinkering with the homestead exemption to allow greater discounts on taxable value. That’s the main route he’s traveled since the state started cutting taxes in 2019.
“It’s a recognition of the obvious,” he says.
He mentions Lt. Gov. Dan Patrick’s “Operation Double Nickel” promotion. Owners of homestead exempted primary residences wouldn’t have to wait until age 65 for those discounts. Patrick would like senior discounts to start at age 55 — the “double nickel.”
“That only costs $4 billion,” he says. “That’s doable.”
The key question becomes “how much money can be spent, and then it has to be sustained year after year.”
School Funding: A Priority
The senator refutes the charge that the Republican-dominated legislature is out to destroy public education.
“No, this is not destroying public schools,” he says. “Public schools are also paid on average daily attendance. That’s the primary generator of income.
In addition, he says, “We put $8 billion into public education at the same time we’re cutting taxes. So it’s really a preposterous assumption. The bulk of the money went to teacher pay raises.”
“These are yearly commitments,” he adds.
Voters Approve of Tax Changes
Bettencourt says Texas voters strongly support tax changes. His two constitutional amendments cutting taxes passed with 78% and 79% of the vote — the highest margins of the 17 amendments approved in November.
And he keeps winning. Watching him, I’m reminded of that West Virginia senator who once offered me a blunt lesson in politics.
“I don’t run from any battles. I may take a whipping once in a while,” Williams said. “But if you lose, you sit on your blisters and go at it in a different direction. You can’t win every ballgame in this rat race.”
Bettencourt seems to have taken that advice to heart — and, so far, the voters keep letting him stay in the game.
