The special session of the Texas Legislature ended one day early Tuesday night, and local legislators said they covered a lot of ground.

“In the past, special sessions were called to deal with one to two items at a time,” Rep. J.D. Sheffield, House District 59, said. “No one ever remembers a special session with 20 separate issues.”

Gov. Greg Abbott called lawmakers back for the special session on July 18. Special sessions can last for up to 30 days, which gave both chambers until Wednesday to work.

Abbott ended up getting half of his ambitious 20-item agenda to the finish line. The list of achievements included the must-pass “sunset” bills that will keep some state agencies from closing as well as proposals to crack down on mail-in ballot fraud, extend the life of maternal mortality task force, reform the municipal annexation process, limit local ordinance regulating trees and impose new restrictions on abortion.

Sen. Dawn Buckingham, R-Lakeway, whose district includes Killeen, said in a statement she was glad legislators were able to tackle school finance, with House Bill 21.

“This bill, covering many areas of school finances, was critical for many of the retired educators in Senate District 24 who are struggling to pay the rising costs of their family’s health insurance while living on mostly limited fixed incomes,” she said.

PROPERTY TAX ISSUES

One of the notable items that did not get passed during the special session was a version of the property tax bill. By adjourning early, the House left the Senate with one of two options: Either pass the bill with the 6 percent threshold requiring voter approval of property tax increases preferred by the House (the Senate preferred 4 percent), or let the bill die.

“Now we are left with what we had before (an 8 percent threshold),” Sheffield said. “Many county and city leaders said they could never see themselves calling for 8 percent or even 6 percent for that matter, but they wanted 6 percent to allow themselves a bit of buffer room if it was absolutely necessary.”

Property tax is a big concern for the city of Killeen due to the number of disabled veterans living in the city. Due to a provision in state law, veterans listed as having 100 percent disability are exempt from paying property taxes. Killeen estimates this lost revenue to be worth about $4.4 million in fiscal year 2018.

The state provides financial reimbursement for the property tax exemption for four entities that share a border with Fort Hood, of which Killeen is one (the other three are Copperas Cove, Bell County and Coryell County.) Killeen received a reimbursement of $800,000 in FY17 and is expected to receive around $1.2 million in FY18 after the reimbursement was expanded in the state budget.

House Representatives Scott Cosper and Hugh Shine led the charge in expanding the reimbursement, and Shine said he hopes to take it even further.

“I would agree that those four entities should be receiving dollar-for-dollar reimbursements 100 percent,” Shine said. “As a member of the Ways and Means Committee I was engaged in discussion about having a statewide plan that made communities like Bell County and the cities that surround Fort Hood whole; that would keep them from having to bear the brunt of such exemptions affecting their property tax base and revenue base. During the interim, we are going to review options for the sole purpose of addressing that issue.”

Hilary Shine, Killeen’s executive director of communications, said she and the city’s lobbying firm worked during the regular and special sessions on the disproportionate impact Killeen is experiencing from the veterans exemptions.

“We offered ourselves as a case study of the very real and growing impacts of state-granted veterans exemptions which now total $4.4 million in annual reduced revenue, and that number is growing at about 30% each year,” Shine said in an email Wednesday. “I testified multiple times before the Ways and Means Committee and focused our arguments on the funding mechanism for current exemptions and proposed extensions. Our position is that the state should fully fund exemptions that are approved by Texas voters so that the impact can be shared equitably across the state rather than concentrated around military installations.”

Hilary Shine said there is an effort to commission an interim study on the total impacts of veterans exemptions across the state. “We think this documentation will be critical in addressing our disproportionate impact and in achieving an equitable funding mechanism in the future. Representative Cosper was a great advocate for us and was successful in getting additional funding committed toward disproportionate impact payments over the next biennium while we work towards a complete solution,” Hilary Shine said.

Cosper could not be reached for comment by press time.

With roughly 50 percent of the governor’s special session list accomplished, Hugh Shine said Abbott seemed “initially pleased” with the outcome of the special session. However, in interviews conducted Wednesday morning, Abbott left open the possibility for him to call a second special session.

“I’m disappointed that all 20 items that I put on the agenda did not receive the up-or-down vote that I wanted but more importantly that the constituents of these members deserved,” Abbott said in a KTRH radio interview. “They had plenty of time to consider all of these items, and the voters of the state of Texas deserved to know where their legislators stood on these issues.

“All options are always on the table,” he said when asked about a second session.

When asked his thoughts about returning for a second session, Sheffield put it bluntly.

“There is no enthusiasm for a second session right now,” he said. “None.”

(3) comments

perugipj

Shameful result on property taxes. If Texas doesn't do something soon on the unfair taxing practices, the only people who will remain in Texas will be elderly, disabled and non-profit business. Until the money runs out, of course. Where is the respect for the EARNER who is paying the lion's share of the tax burden? It seems Texas is sadly becoming another welfare state.

eyewatchingu

Many cities whose economies used to be dominated by manufacturing have seen relatively mobile for-profit businesses leave their cities, while colleges, universities, and medical centers that are tied to their location due to fixed capital investments and other factors remain in place (Penn Institute for Urban Research 2009, 148). For example, the 2010 Commission to Study Tax-Exempt Institutions in Providence, Rhode Island, found that tax-exempt institutions had been expanding in that city over the last decade, particularly in education, healthcare, and social services, while the manufacturing and financial services sectors were shrinking.5 While not all education and healthcare businesses are nonprofits, examining the shift in the employment base from manufacturing to this sector can illustrate how a city’s industrial mix is changing and becoming more reliant on nonprofits. Nationally, the share of workers employed in manufacturing fell from 16.2 percent to 8.9 percent between 1990 and 2010 while the share working in education and health services grew from 10.0 percent to 15.1 percent. Table 1 shows these employment changes for the 25 largest metropolitan areas in the United States, with metropolitan areas ordered from highest percentage employment in education and medical services to lowest.
http://www.urban.org/sites/default/files/publication/26756/412460-The-Property-Tax-Exemption-for-Nonprofits-and-Revenue-Implications-for-Cities.PDF

eyewatchingu

@Alvin all I have to say is this. Properties owned by charitable nonprofits and used for a tax-exempt purpose are exempt from property taxes under state law in all 50 states even though municipalities still need to pay to provide these nonprofits with public services like police and fire protection and street maintenance (Gallagher 2002, 3).3 For cities heavily reliant on the property tax, the exemption of nonprofits from property taxation means that homeowners and businesses must bear a greater share of the property tax burden. Sherlock and Gravelle (2009) estimated that in fiscal year 2009, property tax revenues forgone due to the charitable exemption were between $17 and $32 billion nationally, or roughly 4 to 8 percent of total property taxes.4

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