COPPERAS COVE — The City Council on Tuesday approved two letters opposing a Texas House bill and joint resolution that would change property tax regulations.
Drafted to the city’s state representative, J.D. Sheffield, R-Gatesville, one letter addresses House Joint Resolution 143 while the other note discourages House Bill 3132.
The joint resolution was authored by Rep. Harvey Hilderbran, R-Kerrville, and calls for the abolishment of property taxes from any political subdivision while increasing the state sales tax rate to 11 percent — up from the current 6.25 percent.
It also leaves all other local governments a 2 percent sales tax rate, which is what the other political subdivisions already split.
“In all due respect, the guy (Hilderbran) is being an idiot,” said Councilman Jim Schmitz after the council approved its letters. “This is something that I can’t believe he even dreamed up.”
According to the resolution, the state would pay all debt services of the municipalities, counties and the school districts.
The resolution also currently is being reviewed by the Ways and Means Committee, of which Hilderbran is the chair.
City Budget Director Ryan Haverlah said the resolution’s intent is to force cities and other local governments to pay for only essential services like public safety in transportation.
It assumes that property taxes pay for mostly debt services; however, it doesn’t take into account that property taxes also pay for those essential services.
Of Copperas Cove’s nearly $9 million in property tax revenue, only about $2.2 million of that revenue pays debt services, Haverlah said.
It takes about $8.8 million for Cove to operate its police and fire services.
City Manager Andrea Gardner said such a law would bankrupt cities, causing the state to take over all operations.
The state would take the extra cut to pay debt services, then forget about the other local governments, said Mayor John Hull.
The “scary thing” about the resolution is, if by some means it passes the Texas House and Senate, residents would probably vote for it not knowing they were killing their cities, Schmitz said.
House Bill 3132, authored by Rep. Eddie Lucio III, D-Tyler, pertains to a $10,000 county property tax exemption for any armed service members who were honorably discharged from the military. It also is being reviewed by the Ways and Means Committee.
Haverlah said the bill would cost Coryell and Lampasas counties a total of $250,000 in taxable revenues if just 60 percent of the counties’ veterans took the exemption.
It would have no direct effect on the city, but could easily be amended in future Legislatures.
“They look out for the state,” Hull said of the state legislators, “but say the heck with the cities and the counties.”