By Betsy Denson
It was a year ago when the three Democrats on the Harris County Commissioners Court proposed an across-the-board 8 percent “rainy day fund” property tax rate increase – and the court’s two Republican commissioners thwarted it by skipping the vote to prevent a quorum.
Now, the commissioners have come together to propose the court’s first tax rate cut in a decade.
Precinct 2 Commissioner Adrian Garcia, a Democrat, put forth a motion Tuesday recommended by the budget management department, which would result in a net property tax rate reduction of 1.3-2.0 cents per $100 of assessed value, with very small increases in funding to the hospital district and the Harris County Flood Control District.
Precinct 4 Commissioner Jack Cagle, a Republican who represents part of the area, seconded the motion. No other commissioners opposed it.
There was some dialogue among the commissioners to clarify that an affirmative vote on the motion was not an adoption of the rates themselves. County Judge Lina Hidalgo reaffirmed the rates in the motion would be posted for the public and those would be the same numbers that would come up for vote at a subsequent meeting.
The court will hold a public hearing Oct. 20 before a final vote Oct. 27.
Garcia said during Tuesday’s meeting that citizens needed to see the court come together during a challenging time to strengthen the economy and move forward.
“(We’re) giving them some assurance that we’re being thoughtful about their challenges,” he said. “I think that this is a good vote for everybody concerned.”
In his presentation to the commissioners court, budget director David Berry said his office concurred with the Congressional Budget Office, as well as other sources, that the country was in a recession. He also said that as opposed to a quick turnaround, the recession was likely “U” shaped, meaning it would take a longer time to get back to full capacity.
Berry said more than 70 percent of general fund revenue and an even higher percentage for flood control revenue come from property taxes.
“The key driver of property taxes is property values,” Berry said, noting those values would be a lagging indicator of the overall economy and that their effects would not be seen until next year.
He said although Harris County has “enjoyed a pretty extraordinary period of growth and appreciation over the last decade,” there was likely to be some decline in the tax base in the 2021 and 2022 tax years.
Berry laid out several different taxable property value scenarios and forecasts from 2020 to 2025, which indicated an uptick starting in 2023.
A little more than half of the tax base is made up of the industrial and commercial segments, according to Berry. He said those sectors have been the hardest hit, while residential was proving more resilient.
On her personal Facebook page, Hidalgo wrote that “as a community, we rise (and) fall together. After careful planning, and given these tough economic times, we decided to cut our property tax rate for next year. We still need to reform a tax system that favors a few at the expense of the rest (and) build a fairer, more just system for all.”