Bell County Property Taxes on Housing

Construction continues on a home in a housing development along Bunny Trail on Wednesday in south Killeen. Bell County home appraisal taxes fluctuate, depending on the property and location, experts say.

A legislative bill aimed to provide monetary relief for cities impacted by the Texas veterans property tax exemption law has failed to get through the state Senate.

House Bill 634 would have expanded the number of cities eligible to receive state funds as a relief to losing revenue from the state-mandated disabled veterans property tax exemption. The bill was passed by the House, but stalled in the Senate, failing to get pushed through by the time the legislative session ended Monday.

“It’s disappointing,” said Brad Buckley, R-Salado, a co-sponsor of the bill. He said many people in the area had worked hard to get the bill passed, including state Sen. Dawn Buckingham, R-Lakeway.

Four local governments — Bell County, Coryell County as well as the cities of Killeen and Copperas Cove — are already able to recoup a portion of lost revenue stemming from the state’s 100 percent disabled veterans property tax exemption. Per state law, veterans with a Veterans Affairs-approved, 100-percent disabled veteran designation are exempt from paying property tax on their homesteads. Veterans with lower disability designations receive pro-rated discounts on their property taxes.

It’s a state law local leaders say they support, but the loss of property tax revenue due to a high number of disabled veterans in the area has crunched city hall budgets in Killeen, Harker Heights and elsewhere.

HB 634 — approved by the House in a 145-2 vote earlier this month — was slated to expand the eligibility for the state’s financial relief program for communities disproportionately affected by the disabled veterans property tax exemption. The program, in its current form, is limited to cities adjacent to military installations or to counties that contain one.

The bill would have allowed for cities with extraterritorial jurisdiction — the unincorporated area outside city limits where a municipality can exercise some oversight — within two miles of a boundary line of a military installation to be eligible to seek financial relief related to the exemption.

Cities like Harker Heights and Nolanville, which are near Fort Hood but do not border it, receive no aid from the state.

In Heights, the city’s 1,146 exempt homesteads represent nearly $247 million in value — or around 13 percent of the city’s total tax base, proportionally higher than the impact on Killeen.

But unlike Killeen, there is no help coming from the state. City Manager David Mitchell said in December the city will lose nearly $1.5 million from the 100 percent exemption this year — a 40 percent increase from 2017.

Killeen has about 4,300 homesteads exempt for 100 percent disabled veterans and their spouses. That land represents $634.6 million in exempt value — or roughly 10.8 percent of the city’s total property tax base.

While the bill is more targeted toward Harker Heights and Nolanville, other Bell County cities affected by the exemption could benefit from HB 634 because their ETJs are within the proposed two-mile zone. Those include Temple, which is losing $825,584 in revenue, and Belton, which is losing $180,570. Salado is not affected by the bill.

Another problem with the existing reimbursement program was that it gave back far less than what cities were losing from the tax exemption.

Bell County is losing $5,714,003 while Killeen is losing $4.76 million for the current fiscal year, and Killeen was only expecting to be reimbursed about $1.2 million.

However, those reimbursement numbers should grow, with more funding approved in the state budget, Buckley said Monday.

He said the reimbursement pool has grown from about $6.25 million to $20 million, and will be distributed over the next two years to the cities already eligible.

Buckley said the state budget will also fund a study by the Texas Comptroller’s Office of “heavily impacted communities” due to the tax exemption.

In the legislative interim, Buckley said he plans to form a “working group” with stakeholders from affected cities and continue the process of getting the law passed, although he’s not exactly sure what form that path may take.

“We may want to approach it differently,” he said.

FME News Service contributed to this report.

jbrooks@kdhnews.com | 254-501-7468

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