My enthusiasm for paying taxes is close to my enthusiasm for buying tires for my car. While completely necessary to ensure my safety and reliability of transportation, paying that bill isn’t fun.
That sentiment has been felt across the state of Texas, including the North Texas region, which is why the topic of lowering property taxes is a quick “go-to” issue for elected officials at every level. And, of course, during the Governor’s Special Session he put property taxes on the list of items to discuss.
It’s been my experience in visiting with businesses and people who live in our community that they want to see property tax reform. The only problem with the “property tax reform” that is currently being debated in the State Legislature is that it really isn’t giving relief to property owners and dodges the greater (and much more difficult) issue to tackle – school finance/funding formula.
To break it down, it’s important to look at where property taxes are going – 65% goes to MISD, 23% City of McKinney, 9% Collin County and 3% Collin College. Take note that current legislation being debated only affects the City and the County – not your school property taxes.
The so-called Property Tax Relief Bills (SB1 and HB4) have various components to address property taxes including revisions to the appraisal process. The major component of the bill that many cities, chambers, and people who are concerned about the quality of life in their city, are troubled with is the revenue caps. Currently, if the cities’ property tax revenue increases by more than 8%, there would be an automatic rollback election where citizens would vote whether to keep the tax rate the same or to lower it. What is proposed is lowering the revenue to as low as 4%.
For a fast growth community like the City of McKinney, each year there would be a rollback election at the 4% threshold. And while keeping revenue low sounds like a good idea, it isn’t quite the “relief” tax payers want. In McKinney, based on the average home value, the proposed revenue cap would equal a saving of roughly $36 a year. Or to put it another way, the average homeowner would save the cost of a grande nonfat vanilla latte from your favorite coffee shop each month. At the same time, the tax savings equates to millions of dollars of revenue for the city to perform essential city services.
That is why the McKinney Chamber Board of Directors voted to oppose lowering the current revenue cap and support urging our legislature to roll up their sleeves and tackle real property tax reform by diving deep into the school finance situation. Over the last two decades, the state has slowly decreased its funding for public education, shifting the burden onto the backs of local property taxpayers to fund our schools.
In order for our state to continue to prosper, we must address public education – from funding to curriculum to accountability. It will be a messy but necessary debate. Our children depend on it. They are our future workforce and our biggest commodity in keeping our state competitive globally.
We urge our elected officials to take the challenge of addressing school funding and to stop arguing over lowering revenue caps for cities and counties which in turn only provides very minimal real savings. In other words, buy the quality tires for the car even if it isn’t fun.
Lisa Hermes
President, McKinney Chamber of Commerce
