Travis County Commssioners Court
June 22, 2004
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Item 6
Item no. 6. Which we said was our discussion item only. Consider and take appropriate action on the request to adopt an ad valorem tax exemption for taxpayers at the Travis County hospital district pursuant to Texas tax code section 11.13 n 2004 and the Texas health and safety code section, this is the appropriate section, which is why we'll have this on for next week, 281.096, a 12004.
>> jim, could you kind of walk us through what's going on here.
>> first, let me say, my error. Chapter 281, I typed it so many times in the last six weeks, I can't believe that I typed chapter 231 which I did the agenda request. But it is chapter 281. Under 281.096 which is a section in the chapter under which our hospital district was created, the Commissioners court is given the authority to adopt tax exemptions for the hospital district. The hospital district cannot adopt its own tax exemptions. That has to be did you think by the Commissioners court. And the Texas tax code, section 11.13 n, has -- has a provision for a homestead ad valorem tax exemption, which must be adopted before -- before July first. In order for it to be effective. Effective. There are other -- other homestead exemptions and other types of exemptions which can be adopted under the tax code, under that same section 11.13, but n is the only one that has to be adopted by a certain date. It has to be adopted before July 1st. But you have -- you have today, you are not taking action today, and next week if you don't adopt it next week, then the taxpayers who are paying hospital district taxes will not get this exemption for the taxes that are due on January 31st. This is an exemption which Travis County adopted many, many years ago, for county taxes. The city of Austin has -- as I understand it, never adopted this exemption. So people paying city taxes and -- and I知 careful not to say county taxpayers and city taxpayers, but people paying county taxes have an exemption on their homestead when they pay their taxes under this provision, people paying city taxes do not have an exemption on their homestead when they are paying city taxes.
>> I do not know if -- if -- when folks were -- were calculating up the effect of the hospital district on city and county taxpayers, whether they were considering the fact that there was -- there was no exemption on city taxes, there was an exemption on county taxes, what they assumed about whether there would be an exemption on hospital district taxes. But whatever they thought or assumed or said, you guys are the one that's have the decision that you have to make about whether or not you are going to grant this exemption. The effect would be if you adopt this exemption, then businesses will have to pay a larger percentage of the total tax than homesteads will in order to reach the same dollar amount of taxes. If you don't adopt this exemption, then businesses and homesteads will be -- will be paying the same percentage of the total tax to reach the same dollar level of taxation. The effect on county -- the effect on -- on people who previously were paying county taxes will be that when they pay for those medical services now under the hospital district, depending on your decision, they either will or won't have the homestead exemption for that portion of their taxes that they had before. The effect for people paying city taxes is that when they now pay the medical portion of those taxes to the hospital district, depending on your -- on your decision, they may have an exemption they didn't have before or be on exactly the same footing. Those are the issues as I see them regarding this exemption. You can adopt an exemption up to 20% of the assessed valve the homestead. If you adopt the exemption at any percentage level, the minimum exemption is 5,000. So if somebody -- if 20% of the value -- if you adopted it at 20% or 5% or 1%, if that didn't work out to be $5,000 on a particular home instead, they would get at least $5,000 on their homestead. And most of it 20% of the assessed value.
>> let me fill in just a little bit related to all of the discussions before this election occurred and that is that there was a lot of discussion about whether the homestead exemption should be included as a -- as a presumption or not. The answer was yes. There was a presumption that the homestead exemption would be given at the hospital. I think largely the folks that were advocating that were people at the county because we have been getting a homestead exemption and recognized that and -- and some of us are a little verklempt that the city of Austin gives no homestead exemption when most every other city does. There is some -- it is a true decision of this court about whether to do it or not. I think there were and there are expectation that's a homestead exemption will be [indiscernible]
>> I looked at this, I had to get some specific explanation, I did call yesterday because I wanted to make sure that -- that I did not know that -- [indiscernible] July 1, of course, I think we need to look at it for what it is. Of course when folks get their tax bills, the county -- the homestead exemption, as Commissioner Sonleitner alluded to. However when you get the tax bill, you also see the other taxing jurisdictions on the tax bill. So I知 all for exemptions, homestead exemptions. I think -- I think some even have a range. I think $15,000, for aisd, I think -- I知 not sure if that's correct, $15,000 for aisd, of course you get the city of Austin, they have none. So -- so no tax homeowners tax exemption. So, of course, I would like to stick with tradition as far as -- I don't know if that equates to dollars, all of this kind of stuff, I think over the [indiscernible] hospital district, as far as setting that, leaving it in the -- in the jurisdiction of the county to do that, I知 really leaning towards continuing to -- to allow homestead exemption to apply to the -- to the hospital district. I think that the county continued to have to ensure that we tried our best to -- to minimize the tax bite, as much as possible, to the residents of Travis County. And of course I think this is the direction that I would like to go in. Of course, there -- it's not final yet, you know. [indiscernible] next week, but the bottom line is that I would like to keep the tradition of Travis County going and -- the direction that we have been doing in the past.
>> I feel like I need more information so that I can see what the budgets is going to look like. And if -- because my concern is that we need to meet the purpose for which that hospital district was intended. That's to take care of intgent health -- indigent health care. If it comes up short, I don't want it to come up short. So we need to -- to kind of look at all of the information and make the right decision.
>> Commissioner Daugherty?
>> well, it was confusing, I mean, during the election, I mean, there's no question, I mean, the -- it's sorts of a double-edged sword with a 10.2% turnout which is distressing in itself, I mean, to think that, you know, there were only 10% of the people in this community that elected to go and vote on a county-wide ad valorem, the creation of an ad valorem tax. But that's america, just takes 10%. If 10% go, that's all it takes. But I think that people that -- that probably took the time to go and vote probably recognized, I agree with Commissioner Sonleitner, I think that most of the county people went thinking that you were going to get to -- to continue your exemption.
>> yeah.
>> with the district. I have been asked just this last week -- one of the esd's, one of the gentlemen out south asked me, said, why don't the esd's give us the same exemption that -- that the county gives? Well, I mean that's -- that's being a taxing jurisdiction, they are the one that's get to dictate, right? As to whether or not they would want to give an exemption. The county doesn't have anything -- the Commissioners court doesn't have anything to do with an esd, forcing an esd to give an exemption. But that is -- it is confusing because, you know, when you live in Austin, Texas you also live in Travis County. And so when you look at your tax bill, really being able to look and to determine, I mean, why is this tax this, why is this tax this? As a matter of fact I think that was one of the selling points in getting the inner city to vote for the hospital district, given that they felt like that they were being -- they were shouldering more of the weight of the indigent health care, you know, in -- in Austin/Travis County. So I -- I mean, I get it. And I do think that people that took the time to go and vote and thank goodness at least 10% did, I probably am going to be there with the exemption. And then we are going to have to find a way to run this hospital district given those figures. So I知 -- I知 understanding.
>> legal, I have a question.
>> yes, sir.
>> a -- the question is the -- the percentage that would be allowed, like an example, we allow 20% I think. As far as Travis County is concerned. Is that -- is that the number -- what's acceptable as far as the -- as far as the -- you said a minimum of $5,000 of course, but what is the -- what is the rule of -- is there a model or something that other counties are -- have used a lot, have used during [indiscernible] especially, if we are -- like what Travis County is saying, hey, 20% of that -- plus $65,000 for other things such as persons that -- that are 65 years and older, stuff like that. All of these things are going to come into play in a mix as far as the [indiscernible] is concerned. My question can we come up under the same 20% as we do currently on allowing the homestead tax exemption, can we continue to do this under the hospital district or is there another set of guidelines that you must follow?
>> well, I think there are a couple of issues there. I will try to address each one of them.
>> all right. First of all, I do not know what the other hospital districts in the state do. I do not know if they have been granted this exemption and if they have, in what percentage. Find that out -- the only thing that I do know is that for the portion of Travis County taxes that have been paid for medical services, prior to the hospital district, taxpayers in Travis County have been getting this exemption for the portion of the city taxes being paid for medical services, people who pay city taxes have not been getting the exemption, that's all that I know about the model.
>> the other issue -- there are several other potential ad valorem tax exemptions which this court will also have to decide to grant. If you don't grant them, the district will not have them. They did not have a deadline. That's the reason this one is on the agenda now is because it has this July 1st deadline. The other exemptions can be granted essentially any time up to the time that you calculate your effective tax rate. So you will have time to look at those later when you know more Commissioner Davis about the budget, about the potential tax rate of the district. This one you can't wait. If you wait on this one, then you have lost a whole year of this exemption, which you are free to choose to do. But I wanted to get it on the agenda before the deadline expired so that you didn't lose that choice. Those are a couple of things. I don't know what the pattern is, except what the pattern has been in Travis County. You will have an over 65 exemption, you will have a disabled exemption on homestead and then -- maybe one other exemption.
>> the freeport exemption something that this Commissioner Daugherty --
>> any ad valorem taxes that the district that has to be granted by the Commissioner Daugherty. So there were other -- there were other exceptions that are available that you can grant. They don't have the same deadline as this one.
>> we will be able to review those.
>> making sure that those are -- that those are on your agenda as part of the process setting the tax rate for the district. If -- it's unfortunate that this one has its deadline, Commissioner Gomez. You rightly want to have more information about the district budget. Unfortunately, we won't have any more information --
>> that's the whole point.
>> before July 1.
>> if they come up short, they will have to deal with the tax rate.
>> this decision will have to be made before you know what the budget is going to look like.
>> we do have a second bite of the apple on this one. We have to roll this to next week. We complaint vote today even -- we can't vote today even if we want to. I am happy to work with you -- [multiple voices] -- I think that's something we can very easily -- [multiple voices]
>> that's a good point.
>> as far as I知 concerned, I think Commissioner Gomez did bring up a good point. Shooting at something in the dark. That is to -- I think jim brought it up, the other taxing opportunities that we have dealing with ad valorem taxes where we don't have a deadline. Then we have to reach -- because I know the over 65 folks out there on the disabled, all of these other folks out there that are getting the significant tax relief from Travis County, I think as far as everything else, Travis County is doing that, I think those folks should also have an opportunity to know what we have the ability and authority to do. I -- I guess that would be part of what I would like to see, also, even though we may not need to act on it. I would still like to see it atmosphere an ongoing process.
>> that might be part of our time line in terms of what we pull together -- marble.
>> I would be happy -- [multiple voices]
>> I would be happy to -- on the same deadline, you can have that next week.
>> sounds great. We will roll this one for one more week. Further fruitful discussions next week.
Last Modified: Wednesday, June 23, 2004 8:44 AM