Travis County Commissioners Court
Tuesday, July 5, 2011 (Agenda)
Item 16
16.
consider and take appropriate action on Travis County property tax exemptions for 65 and older and disabled residents.
>> leroy nellis, budget director.
let me say on this agenda item, Commissioner Huber's office had requested some information last week that I just received and forwarded to your offices, she had asked about the median salary for those homes, those homesteads that have the 65 and older exemption on 'em and we just got that this this morning and it was $213,174.
so the median on those homes is slightly below the average.
I don't have the median for all of Travis County.
the average homestead in Travis County is $280,022.
I would -- you know the committee did identify this inequity based on the exemption has not been increased since.
fy '94.
however, the committee was attempting to make it a revenue neutral calculation in comparison -- in conjunction with the historic exemption.
it does cost about 500,000, if not a little more, to -- to enact a 5,000 increase in the exemption.
and probably what I would recommend to the court today is since you have delayed the decision on the historical, that you leave this in place one more year until you see exactly where it comes down on the historical exemption.
so that if in fact there are savings in the historical in the future, they could be offset by the 65 and older.
so -- so that -- that's -- I think the only explanation on this exemption.
it's currently at 65,000.
>> I remember what you said about -- about harris county.
but is the $65,000 plus 20% competitive with what the other urban counties do in Texas?
harris county does it a little bit better, right?
>> harris county does I believe 160,000 on the 65 and older.
they essentially forward -- for their 65 and older, essentially have a zero tax liability at the county level.
I don't have dallas and some of the other urban counties.
but I do think because of the way the effective tax rate operates, that -- that if in fact you lower one exemption and you raise one exemption, that the net effect is zero.
where if you do one in one year and one in the other, then you get an offset and it actually costs you revenue dollars.
so I would think under the current circumstances that you would probably maintain the 65 for at least one year and take a look at it for fy '13.
>> Commissioner Eckhardt?
>> leroy, there was an article in the paper after our last session last week with regard to pending settlements on the historic exemption litigation.
we had heard previously I think from mr. Knight from the tax office that we had until I think the 14th of July to affect this tax year.
if that -- if that -- of course that would be lightning speed for a lawsuit settlement.
but if that settlement were to come in before the 14th with a cap, would we be able to apply -- would we be able to apply that cap for this year and use the offset for -- for the over 65 and disabled?
or is that just impossible at this point?
>> it is my understanding that what patrick brown the chief appraiser told me was that he could not guarantee that if the court or the counsel took action after July the 5th, he couldn't guarantee that it would get into the certified roll.
that's what he said.
he said he would make every attempt.
now the effect of not getting into the certified roll means that essentially I believe the latest possible date that you could make a change to your exemptions would be the data dusty loads the tax bills, whether or not it get into the certified roll.
so we were attempting, the July 5th date, was an attempt to get it inside the certified roll that's expected out on July the 25th.
so ...
yeah, I read the same article where it looked like the -- that both parties in the litigation were getting close and perhaps there would be a settlement.
and resolution.
so the answer is I think that the court could take action once that litigation is settled and you could reconsider your exemption up until, according to dusty, even after the tax bills go out.
I'm not -- I don't think anybody here would recommend that.
I would anticipate the real drop dead would be enough time before the tax bills go out.
that does -- that doesn't mean it would get into the certified roll.
though.
there are some -- some difficulty and challenges if you don't get these exemptions inside the certified roll.
>> I would ask of staff if we could identify that drop dead date and then we can -- we can live and die by which -- by when that settlement happen.
>> I would be glad to recontact tcad and in conjunction with dusty and the tax office.
>> but the council doesn't meet in July, right?
>> right.
>> I think -- the Austin city council is not meeting in July.
>> that's correct.
that's my understanding is their next meeting is in August.
so the cities will not be inside their certified tax roll --
>> we said that -- we said that we would put our heads together and figure out what we would like to see.
and -- in an historic properties exemption program.
I think we ought to do that.
>> sure.
>> and that will take some negotiating.
I didn't just give up on every recommendation that our -- that our group brought back.
I didn't think that we should approve the whole ball of wax at that point.
I thought we should work with the city of Austin.
my point is that will take some time.
there's no reason to dillydally, those, we can move as expeditiously as possible, but I'm having a hard time seeing us accomplish that within a matter of a few weeks.
>> I do think up until this weekend when the article and, nobody thought the litigation would be kind of as -- maybe negotiated and settled as quick as what they've said.
they were saying the -- the city was saying they didn't anticipate up until that time of making a decision until the fall.
and so -- so, you know, I think that -- I think once the city is able to start talking with us after the settlement, then -- then we can come up with something and I -- I agree.
I don't think we ought to wait until next spring to address this.
we ought to address it, get comfortable with it, and set it for, you know, next spring whenever we -- whenever we come up with it again.
>> judge?
>> yes.
>> I -- I'm -- I agree with you.
I think that one of the things that is really important is that we look at the whole package together.
I have a problem with piecemeal a piece at a time because it doesn't have a continuity and the total effect.
but so I think that we should proceed the way we have talked about last week and with the -- with energy.
>> sure.
>> and just to clarify, I raise it not because I disagree with the idea of collaboration with the city on a holistic response, but that if a settlement came down prior to the certification of the tax roll, and insisted and we have no idea whether it will, but if it did insist that a cap be applied for this tax year, we would have an imbalance, wouldn't it affect our effective tax rate unless we recalibrated some other exemption like the over 65 and disabled?
>> yes.
if in fact the Commissioners -- now, where you are right now is that you are -- you voted to essentially continue the same historic exemption as we have in this current year for fy 12.
so regardless of what the city does, your effective tax rate is what we're sitting on right now.
if in fact you elected to cap in a subsequent action of the court, then that would drive down your effective tax rate for your adopt budget, if in fact you had savings from the cap and you would.
so I think that's what your -- what you're referring to.
>> that's all that I'm referring to.
if it were court ordered on the city, within a time frame to which we could do what the city also was required to do, of course this is a hypothetical at this point, the likelihood of this settlement happening in time is pretty remote.
so -- so -- so -- it was just a question.
>> I think the next -- the next action would be that the -- that the city settles the litigation with the litigants and at that point we can re-evaluate or at least get in conversations with the city.
>> but I thought we ought to know the absolute drop dead date just in case there is required action on the city's part in this settlement.
because of course it will affect their effective tax rate if they are --
>> no action required on that, judge --
>> on item 16 I move that we set the -- the exemption for 65 and older and disabled residents at $65,000, the current amount.
>> that's right.
>> discussion on the motion in.
all in favor?
that passes by unanimous vote.
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