Representing more than 1,200 local businesses and 165,000 employees, the Plano Chamber of Commerce is the voice of the local business community. As such, we evaluate issues such as public school finance and property taxes that impact our residents and business climate alike.
Property tax reform has been the topic of much debate and proposed legislation. We believe the answer is not as simple as a one-size-fits-all cap on tax rate increases or revenue, mandatory rollback elections, or a sole focus on homeowner property tax to exclusion of all other tax policy.
We recognize that the current property tax assessment system deserves attention. Skyrocketing home values and appraisals are outpacing city tax rate cuts and increasing public school recapture rates are limiting school districts’ ability to lower their tax rates, all while residents and businesses are facing larger tax bills each year.
Responsible property tax reform means reforming the state’s current public school finance approach, preserving local control, evaluating the current appraisal system, and expanding homestead and other exemptions without limiting economic growth.
The Texas Legislature needs to assume the leadership role in school finance and consider the option of increasing the state’s own commitment to public school funding in order to ease the dependence on local property tax revenue. Over the past decade, the state has decreased support of public school funding from 48.5 percent to 38 percent by relying on increasing property values to bridge the overall budget gap.
Local taxpayers already have a mechanism to express their opinions on local tax rates: through local elections and the leadership elected. But mandatory rollback elections are a very expensive mechanism to control property tax increases, and last session’s proposed revenue cap on municipalities through Senate Bill 2 would have saved the average Plano resident only about $3 a month. That is not true property tax reform.
Local tax rates should remain the responsibility of local elected officials, those closest to the actual tax payer. Local entities should also have the ability to temporarily reduce tax rates without having to go back to the voters to re-approve previous rates.
The current market-based appraisal system serves as a better mechanism to ensure taxpayers are paying an amount based on economic value and allows a reasonable opportunity to protest valuations. Let’s also continue to seek and promote ways to expand and encourage homestead and other exemptions to create advantages for individual home ownership, such as those that benefit seniors, the disabled and veterans.
We must do all of this while ensuring we maintain the right balance between residential and commercial tax burdens. Businesses currently pay 52% of the local property taxes collected in Plano. Increasing the tax burden on businesses could hinder job creation and economic growth.
With that in mind, the voice of business is essential to this conversation. Along with our engaged citizens, we can work together towards meaningful property tax reform.
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