Travis County Commissioners Court
Tuesday, June 8, 2010,
Item 18
>> item 18, consider and take appropriate action on the creation of a working group to review local tax policy for travis county and make specific recommendations to the commissioners court. Commissioner eckhardt?
>> this item is for exploration to see if the court is interested in -- in anticipation of the probability of a three percent increase in the travis county tax rate. And in recognition that other taxing entities in our region are probably thinking the same. And i wanted to put this request in context bypassing this out to court members. The other side. Just to put this in context, with regard to the -- the combined state and local tax burden in texas, which would include our local taxes --
>> which one are -- in the back of this it is a through e, which one are we on first?
>> i actually gotten to that. The backup was a through e. I was going to set out the big picture. With regard to state and local tax burden as a percentage of income, we actually do pretty well in texas compared to the other states. I believe we rank 43rd among the states with regard to tax burden as a percentage of income. And our overall tax burden as a percentage of income is hovering at about 8.4% as opposed to the national average of around 9.8%. So in that regard we're doing pretty good. But when you consider our heavy reliance on property taxes, my concern also relates to the flip side of that page showing the community action network's community dashboard saying that 37% of travis county residents are cost burdened and paying more than 30% of their income for housing. So in that light, some members of county staff had started to discuss in the halls what available to us statutorily to inject progressivity into our property tax schemes. We do have some tools for progressivity and we use those tools. The homestead exemption, the over 65 and the disabled exemptions, the agricultural exemptions and various other tools. And it occurred to me that perhaps we wanted to get some of our in-house expertise together and perhaps ask them if they would like some volunteers who are outside travis county governance, but have expertise and are willing to give it as a civic contribution to do a quick but thorough study of what's available to us statutorily. What we're using and how we might be able to use it better to provide this court options to look at moving forward. Because we all have expressed concerns about what the tax rate does to those in our community who are least able to shoulder that burden. So with that in mind, i put together a quick list. As the commissioner referred to it, in the backup i did throw down some possible charge to the team, which included five items. But it could be more items, it could be less items, it was just a brainstorm list. I actually thought of another item that could be included, but so far just in this draft charge it was to look at the homestead exemption, how we utilize it and how we might utilize it better, to look at the over 65 discount, how we utilize it, how we might utilize it better. It's a flat amount, it's not indexed, it's not a percentage of the actual value in the home. The disability discount, similarly it's flat, it's not indexed. The historic exemptions. And whether or not that actually is a progressivity tool or if it is a land use and historic preservation tool. And i understand the city of austin is also looking at that currently. As well as an item that i know is contentious for commissioner davis and maybe for others of the nonprofit land banks, which are available under statute now. There was also another that occurred to me -- actually two others. Mr. Nellis had brought to my attention, which i didn't know before, that people over 65 can defer their taxes as long as they're living in their house. It's not often utilized, but we might want to look at that and see if we want to more broadly educate about that option. And then there was another that i don't believe is available to us by statute currently, but perhaps we might want to look to adding it if we find that it's advantageous. Some other states have a circuit breaker tax exemption so when an individual percentage of income in property taxes goes above a certain point it's cut off and they're rebated the amount above that percentage income. So those are just ideas, and to get the conversation going.
>> i applaud you for what you're doing in this. I think those others than abcd in this backup, i can kind of lean towards looking into it as far as investigating. Homestead a is especially very critical because i think the homestead exemption is a relief factor. I believe it's a relief factor meaning that of course travis county allows 20% to homesteaders here in travis county. That's 20% taken off the top of the appraised value before it's taxed. I have no problem with that. My problem, though, is when other governmental entities don't do it. We have a great reputation of doing a lot of these things, which you brought up the 65,000 senior citizen exemption, the disability exemption of course along with homestead exemption. Those are things we're already doing. How can we add to those? Let's look at it. But when you have the city of austin on one end not allowing homestead exemptions, which would bring farther tax relief to a struggling community, i just think it's an outrage as far as the city of austin is concerned. I just think they, the city of austin -- i've said this before from this dais -- should allow homestead exemptions for the residents of travis county. It's simple. The residents of austin, not travis county, but the residents of austin. Now, the land banking, we looked at this, nonprofit land banking, number 5, number e in this situation. We looked that the a little bit ago. And it was a lot of heated discussion before us on the dais. Land banking meaning taking property from those persons that have spoken that they don't want to be any part of this. In fact, the analysis that were ran back then through pbo, leroy and harvey and that bunch, we had several meetings. You're talking about taking $40 million off the tax roll. Who has to pick that up? The folks that have to pick it up are the rest of the taxpayers in travis county. Now, as far as i'm concerned, one of the things that i think need to happen, of course, is for folks to own the land, if they're going to own the structure, they should have ownership of the land upon it, having to own the structure and then not owning the land and then that particular piece of property is taken off the tax roll and everybody else here in the county would have to pick that up. And the main thing about travis county as far as our source of revenue, we're not the rich kids on the block like the city of austin. The main thing about travis county is we have to depend solely on a few fees and exemptions, few fines and fees and stuff like that. But we depend solely, a large percentage, on property tax revenue. That's how we make things happen here in travis county is with our property tax revenue. That means property that is taxed.
>> i represent precinct 1 and traditionally what has happened in the past is because of segregated practices, racist segregated practices, the city of austin deemed that folks would live where they told them they had to live, which was in -- and if you didn't, you didn't get the utilities and other services that the city rendered. Now, that's history and that's fact. So here we have a bunch of folks that was forced to live in a certain area of the county, predominantly over in east austin. You had other pockets also around the city, but the majority lived right over in east austin. And what happened was that if you didn't live there, you couldn't receive the utility services from the city of austin or anything else. Now, here we are a faced with a situation where we have gentrification, but because the segregated practices, those gentrifications are there. And i think taking property, putting property into a land bank where the person don't own the land anymore is going backwards. In other words, you're being punished for being segregated again. And those folks didn't elect to live there, they were forced to live there. Here is just appears that it's a land grab from a practice that was employed by the city of austin, which is segregation. There ain't no doubt about it. It was segregation. And now we're going -- coming back later on and under this kind of scenario and take the land from those folks that have bore the burden of years. What the city of austin need to do to really make this really work is to do as travis county has done, and we're proud to say that yes, taxpayers in travis county, yes, those homestead property owners in travis county, yes, we allow you 20%. Exemptions on your homestead. I think the city of austin can do some of the same thing. And what a tremendous dent i think that will make in some of the property tax owners, especially our senior citizens that need an additional 20% exemption from the high bracketed taxing jurisdiction such as the city of austin. So i'm going to continue to not support this. I'm going to continue to do anything that take property off the tax rolls and once you take property off the tax roll, folks, that means somebody else have to pick it up. In other words, other taxpayers in travis county have to pick up the taxes that's not there anymore, that's -- the property is not taxed, so where is the other money coming from? It's coming from the rest of the taxpayers in travis county. Or the city of austin in this particular case and we end up dealing with it. So again, i have a problem with that and i'm going to try to protect the revenue that's coming into travis county under its property tax revenue scheme of things. I'm going to try to protect that as much as possible because that's what our bread and butter is in travis county is the property tax revenue that's generated each year. So i'm going to continue to fight to protect that. Thanks.
>> mr. Priest?
>> thank you, judge, commission ers. Morris priest speaking on my own behalf. On this creation of a working group to review local tax policies for travis county and make specific recommendations to the commissioners court, i -- when i hear this creation of a working group, it really concerns me because normally how i interpret that is people are going to be excluded just by virtue of how we've seen things done here in the process. But i did want to encourage the court to have those members that have spoken on these issues such as ryan rogers, myself, dick hallerman, roger baker, to be included in this process, but not to the exclusion of anyone else in the county. I do think that one of the biggest issues that's been brought up and i got distracted by just different things. I wasn't not listening to my commissioner, but i didn't hear anything about development impact fees. To the extent that they've been elaborated on in multiple areas of different facets of taxes that by statute i think that the county is not taking advantage of that the county can implement, development impact fees of various sorts. So i did want to mention that. That's about all i had.
>> what size working group do you have in mind, commissioner?
>> i was thinking of a group of -- a group of roughly eight. And i thought that perhaps we could start with the folks with our in-house expertise of which we have some significant in-house expertise in leroy nellis, harvey davis, nelda wells spears, dusty knight, elliott beck. And then there are --
>> you can thank mr. Knight too if we're about to draft t.
>> thank you, dusty. You're back there. I was going to talk to the camera. But that is some significant in-house talent right there. And to have them convene initially to see if there are any individuals in the community with particular expertise, although i'm very mindful of what you say, mr. Priest that, we do need a public input process. I think for the purposes of -- is a rapid deployment model to take folks who already have significant expertise in the statutory framework and say this is what's legally possible. This is what you do. This is how you could do it. These would be the pros and cons of doing it. It would be a very rapid response kind of circumstances. There have been some individuals, particularly in mine and commissioners -- i'm having stage fright here. It's odd. Commissioner huber and i did an extensive search for tcad representation, and through that process several people from the community who have extensive background in tax law, in legislation, and in implementation matters came forward that may or may not have been perfect for tcad, but had unbelievable knowledge and were willing to provide it. And we thought we could also give those names to our in-house folks for consideration for utilizing their talent. I was thinking we could probably put that in-house group together, give them two beeks to chew over names and people that they know of to draft and come back with a charge in two weeks. Mindful of what commissioner davis had said with regard to land banks, that could be taken out in order to remove the contentiousness on that issue. I -- while i recognize that, i do -- i would like to have these folks put everything on the table. And if they found that the statutory authority was there and it had a good, positive use for the 37% of travis county residents that are housing cost burden, which indicates to me we have a lot of folks who are housing cost burdened all over the county. I would like to unleash them to identify all tools that they think are available to us.
>> i guess the one concern i have is that two weeks from today would be the 22nd. We will land on the 2007 budget probably mid september, july, august, so that's 60 to 90 days. Should we expect serious work on four or five items in so short a time?
>> i think -- and this is in some conversation with our in-house expertise, but if the charge as i identified it, the first being identify all options under current law that are currently deployed or could be deployed to better align property owners' wealth with their tax burden. I think that actually can be done pretty quickly. I think that's a known universe. The second part, analyze how deployment of existing tools could better alleviate on those least able to afford it, that's the pros and cons of the tools available to us. That perhaps would take more time. But i think that the first part of that charge, that draft charge, could be accomplished by the end of july.
>> if i were to put these in priority order, i would put d first. D, cb and c. I think a lot of work has been done on d. We've been thinking about that for years and it surfaces periodically and we bury it again.
>> and the city is also looking at it currently.
>> i would agree.
>> the impact on us is much different than the city's. We take a bigger hit just because of the other exemptions we have in place. But i don't have in mind telling the city what to do. I have in mind travis county figuring out what we can do better. But to the extent that our city officials learn from our actions, so be it. If we're asking the travis county employees to work on this for us and giving them two weeks to refine the charge, then come back i guess not only with the charge, but also giving us a reality check on what they think they can get done, we really need it back, if we're seriously thinking about doing it, i would say in 60 days. Because i don't know what kind of public hearing requirements we would have in mind if we do something significant regarding changes in taxes. And if you change the historical exemptions, i see a whole lot of people wanting to be heard and i think in fairness we ought to give them that opportunity. It's not a full year, but certainly that's an opportunity to address us on it.
>> how about this? I'm going to try and synthesize this. That if we take two weeks and ask mr. Nellis, ms. Spears, mr. Knight, mr. Beck to we fine the charge, refine the timeline, including a public input process in the timeline, and also investigate any outside volunteer assistance that might be helpful to them in that charge, and to come back in two weeks with those three?
>> two of them would like to address us on that issue.
>> it sounds like it or looks like it.
>> i would just like to say i do think that a representation from the auditor's office would be very beneficial, especially since she does the revenue estimate. And whether susan herself is available or one of her employees would be helpful.
>> my apologies for that oversight. What a stupid oversight. Absolutely.
>> sometimes the obvious escapes.
>> mr. Knight wants to mention another thing that we overlooked.
>> the reason that we're here today is on item number 20, we were going to ask y'all to set some assumptions so that we would be able to tell the appraisal district for the effective tax rate calculation, that will be done on july the 25th. We're talking about possibly changing all this 60 days from now, which would delay doing the effective tax rate, setting the tax rates and the whole -- that whole process. I just wanted to throw that out that we were asking today that hopefully you would set -- at least tell us what it is so we could tell the appraisal district because changing these things are going to change the values and all this that would be part of the calculations on july the 25th, of which they're trying to get ready for. I just wanted to put that out there as a timeline that's there today.
>> then we may find -- this is exactly the kind of expertise that we need to hear about. We may find that policy changes can be explored now, but should be deployed for the coming fiscal year instead of the -- the fiscal year after the one we're considering now in order to have a seamless transition. And if that's the case, that's the case.
>> and there may be some of the elements, some of the ideas for relief that may take statutory action, legislative action, and the group could work on those in line with the new legislature.
>> commissioner huber. Firsti want to thank commissionr eckhardt for bringing this before the court. I wasn't aware she was doing it and my own office has been looking into a lot of these things. I think it very timely to deal with it. Perhaps we could have done it sooner. But i'm very supportive of this. I'm very supportive of your focus on d, the historic exemption, because there has been so much talk about it. And i want to say that i think that maybe if we can do what commissioner eckhardt is suggesting and getting this team together quickly, we may be able to identify some very quick things that can be addressed and then look at a schedule for the rest of it.
>> i can't take credit for this. I'm just plucking this idea out of the ethey are. This has been discussed in the halls by many people and it was a matter of sticking on a piece of paper and making an agenda request.
>> are you asking ms. Nellis to serve as the unofficial, unpaid chair of the committee?
>> yes.
>> so moved.
>> [ laughter ]
>> > let's have it back in two weeks. Let's ask them to refine the charge, consider all the comments made today by mr. Priest also. And in two weeks we'll revisit the charge, committee membership and any other relevant issue, okay?
>> and i would assume that i should feel free to invite someone from the auditor's office to join us.
>> absolutely.
>> let's add the auditor and let her designate an appropriate person.
>> and are you taking d off the table?
>> well, all we're doing today formally is suggest that we're leaning towards this economy and asking thm to look at the charge.
>> but i was saying what you said that she was going to do --
>> well, i didn't say i was going to do it, i was simply recognizing that you would like to do it. But i was suggesting that we leave it to the team to identify the tools and the pros and cons.
>> well, i guess when it comes to that we'll have to do what i have to do and continue to preach as i'm going to continue to preach until folks -- and say to folks that e is poison to a segregated policy that the city of austin have done to this community in precinct 1. And i'm not going to support any type of setting that really takes property from one of the their people, that property. And of course they would have the house, but you never own the land. Some nonprofit will be conducting that. And i think that message need to come across very clear, and it has. It has. We have a lot of folks that have spoke in support. My whole point in this is the traps in other areas, especially in -- my whole point is why this precinct, in precinct 1? Because that's where a lot of the things are happening. The transition over there is rampant, but at the expense of who? And who is really calling the shots here? Travis county commissioners court or the city of austin? Because we're talking about in the city limits.
>> if you're accusing me of carrying water for the city of austin --
>> [overlapping speakers]
>> you will end up in a screaming match again.
>> [ laughter ]
>> sometimes we have to do that.
>> [overlapping speakers]
>> we look forward to your next visit two weeks from today.
>> yes, sir. Thank you very much.
The Closed Caption log for this Commissioners Court agenda item is provided by Travis County Internet Services. Since this file is derived from the Closed Captions created during live cablecasts, there are occasional spelling and grammatical errors. This Closed Caption log is not an official record the Commissioners Court Meeting and cannot be relied on for official purposes. For official records please contact the County Clerk at (512) 854-4722.
Last Modified:
Tuesday, June 8, 2010 1:45 PM
