Once again, several local cities are out of luck.

The Texas Legislature adjourned last week after lawmakers failed to pass a bill that would expand state reimbursement eligibility for cities disproportionately impacted by the 100% disabled veterans tax exemption.

Already, cities such as Killeen, whose boundaries abut a military installation, are eligible to receive state funding to offset the property tax revenue lost to the exemption.

But cities that are in close proximity to an installation, but don’t actually share a boundary, do not qualify for money from the state.

A bill put forward by state Rep. Brad Buckley, and later an amendment to a Senate bill, would have added cities whose boundaries are within two miles of a military base — including Harker Heights and Nolanville — to the eligibility list.

However, for the second time in two years, the measure failed to pass both houses of the Legislature, even though both times the House gave Buckley’s proposal unanimous support.

The problem, once again, was the Senate, where Finance Committee chairman Jane Nelson of Flower Mound continues to oppose expansion of the program.

After two strikes, Buckley’s problem is where to go next. As he acknowledged last week, the expansion of the reimbursement fund will require a revenue stream. And to date, none is available.

Meanwhile, local cities continue to bear the economic brunt of the tax exemption.

Harker Heights Assistant City Manager Jerry Bark said that since the start of the exemption, the city has lost in excess of $11 million in revenue, making it one of the most impacted cities in the state. He testified before the House in April that the city is losing about 30% of its property tax revenue annually because of the exemption.

In Nolanville, Mayor Pro Tem David Williams said the amount of revenue lost could have funded five police officer positions over the past year.

Short of discontinuing the veterans’ exemption — which virtually no city officials favor doing — something must be done to compensate for the funding loss.

Ironically, by not reimbursing heavily impacted cities such as Harker Heights and Nolanville, the state is actually hurting the very veterans it is trying to help with the tax exemption. That’s because the loss of tax revenue may force these cities to cut back on programs and services — negatively impacting our veterans, as well as all other residents.

And that impact is significant.

Bark said in his assessment earlier this spring, “The city struggled to fully fund our road and fleet maintenance programs prior to the losses that began in 2010. With the reduction in revenues, these programs have declined further. Also, while we could construct the needed Fire Station Number 3, we could not afford to staff it with current revenues.”

Certainly, Harker Heights could raise its property tax rate to compensate. It has not been increased in more than a decade, and the city has a healthy fund balance. However, digging into reserves or depending on sales tax revenue wouldn’t be necessary if the exemption program were equitable.

For many state lawmakers whose districts don’t include cities impacted by the veterans’ exemption, the issue is a nonstarter. For others, such as Sen. Nelson, it’s about sticking to a commitment to not expand the original program.

However, it’s hard to see how state senators can view a bill that is unanimously approved by the 150-member House of Representatives as being unworthy of their serious consideration and support.

For his part, Buckley hasn’t given up. He plans to establish a working group to study how to attack the issue in the next legislative session.

But the next session is still two years away. In the meantime, two big obstacles loom on the horizon. One obvious roadblock is the 2022 election. The other is redistricting, which is scheduled to take place this summer or fall.

Though Buckley won election to his District 54 seat in 2018 and again last fall, he lost Bell County both times. In 2018, little-known Democrat Kathy Richerson, a retired rancher, outpolled Buckley by 903 votes in Bell County. Last fall, first-time candidate KiKi Williams topped Buckley by about 1,100 votes in Bell County.

In both instances, Buckley won by lopsided margins in Lampasas County, offsetting the Bell County shortfalls and securing his victories.

But with redistricting on the horizon, it’s unlikely that District 54 will keep its current configuration. As of the 2010 census, each House district was drawn to include about 167,600 residents. With the 2020 census numbers coming into play for the redistricting process, it’s hard to say how the local area will be carved up to provide House districts of relatively equivalent population size.

For example, Killeen has grown by about 22,000 residents since 2010, and the county as a whole has increased in population by an estimated 55,000 to 80,000 people.

Bell County is split between District 55, largely Temple, Belton and the eastern half of the county, and District 54, composed of the Killeen and Salado areas plus Lampasas County. So it’s easy to see how rapid population growth over the past decade could result in significant changes to the district lines.

Moreover, with the filing period for state races opening in mid-September, legislators will have to work quickly to get redistricting done in time. This may not allow for as much input as some incumbent lawmakers would like.

With Killeen leaning increasingly Democratic, and the possibility that Buckley’s town of residence, Salado, could be drawn into District 55, it’s uncertain what the future holds for District 54 and its current representative.

For his part, District 55 state Rep. Hugh Shine, R-Temple, has been a strong supporter of Buckley’s proposed change to the disabled veterans exemption, and he will no doubt support the bill in the next legislative session, should he win reelection. The same holds true for the area’s state senator, Republican Dawn Buckingham of Lakeway, who has supported the change in wording for the veterans exemption law on the Senate side.

But again, with the population growing so quickly in the Austin area, where Buckingham lives, it’s possible that the Killeen area may be drawn into another Senate district as well.

Additionally, Buckingham is reportedly considering a run for the state land commissioner’s post, which would mean a new state senator for the Killeen area, regardless.

For now, all residents of Harker Heights and Nolanville can do is watch and wait.

Officials in both cities will have to do the best they can with the anticipated loss of revenue — and all the problems that entails.

It’s not a fun game, but we’ll have to play the cards we’ve been dealt.

dmiller@kdhnews.com | 254-501-7543

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