As The Texan highlighted last week, the Texas Property Tax Reform and Transparency Act of 2019, otherwise known as Senate Bill 2 (SB 2), allows a municipality or county to increase property tax rates by up to eight percent during a disaster without triggering an election.
However, that interpretation of the law is controversial. As reported last week, Texas Attorney General Ken Paxton issued a non-binding opinion that the coronavirus pandemic is not considered a disaster for the purpose of that provision in SB 2.
Elizabeth Reich, Dallas’ chief financial officer, explained to the council that the resolution would not have necessarily increased property taxes by eight percent, but would have preserved the council’s option to do so when setting the tax rate for Fiscal Year 2021.
Reich advised councilmembers that if they chose not to invoke the SB 2 loophole, then any property tax increase above 3.5 percent would have to be put to Dallas voters in a November referendum.
Reich estimated that such an election would cost about $1 million, depending on what else is placed on the ballot by other jurisdictions.
Proponents of the resolution believed the council should keep its options open as they face the city’s massive loss of revenue caused by coronavirus-related closures, which Reich projected will be up to $134 million in Dallas.
Councilmember Adam Bazaldua was concerned that important services in his district would have to take hits, reminding the council that city services for many residents are not “luxuries.”
However, other members recoiled at the idea of increasing property taxes by more than 3.5 percent in an economy that is already struggling.
“I want to take this option off the table,” said Councilmember Cara Mendelsohn, whose district encompasses the northern tip Dallas.
Mendelsohn said an eight percent tax increase after the coronavirus pandemic would be the “next disaster” in Dallas.
“I cannot imagine a scenario where I say to my residents, ‘We’re going to have to raise your taxes after COVID.’” added Councilmember Chad West.
Some councilmembers seemed exasperated by what they viewed as a disconnect between their constituents and the city council itself.
“We’ve got to do a better job educating our constituents,” said Councilmember Carolyn King Arnold, highlighting her belief that voters sometimes do not link lower taxes with fewer or lower quality services.
Arnold’s point was echoed by City Manager T.C. Broadnax, who predicted that the same people who opposed higher taxes would be the ones complaining about having to make cuts to accommodate the loss in revenue.
Councilmember Omar Narvaez emphasized the backlash many members were facing via texts and emails about the resolution.
“The media reported it incorrectly,” Narvaez said, believing that some outlets had failed to give a complete picture of the specific resolution the council was considering.
At one point during debate, Councilmember Jaime Resendez moved to postpone consideration of the resolution until the council’s meeting on June 24.
The tone of the meeting soured after Mendelsohn moved to amend Resendez’s motion by striking June 24 and inserting December 31, which was a parliamentary maneuver by Mendelsohn to postpone the resolution so far into the future that it would have effectively killed the resolution.
Mendelsohn’s position was that the council shouldn’t delay the question until a later meeting. She challenged members to “buck up and vote your conscience.”
Dallas Mayor Eric Johnson stated for the record that he was disappointed the item of business was even placed on the agenda, characterizing the debate as a “premature conversation.”
The mayor noted that the city should have first considered ideas such as cutting executive compensation and “organizational efficiencies” before pondering a higher tax increase.
As Councilmember Lee Kleinman underscored, property taxes will still likely go up, the only question was whether the increase would be capped at 3.5 percent or eight percent.
Ultimately, some members like Narvaez seemed reluctant to limit their options, but decided against antagonizing an anxious city by entertaining the notion of an eight percent property tax increase.
“I have not heard one person say this is a good idea,” Narvaez said.
Mayor Johnson, Mayor Pro Tem Adam Medrano, and Deputy Mayor Pro Tem Adam McGough voted “no,” along with councilmembers Mendelsohn, West, Arnold, Narvaez, Kleinman, Jennifer Gates, David Blewett, and Paula Blackmon. Councilmembers Tennell Atkins, Resendez, and Bazaldua voted “yes.” Councilmember Casey Thomas II was not present.
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Hayden Sparks is a senior reporter for The Texan and a lifelong resident of the Lone Star State. He has coached competitive speech and debate and has been involved in politics since a young age. One of Hayden's favorite quotes is by Sam Houston: "Texas has yet to learn submission to any oppression, come from what source it may."