On April 14, the Senate Finance Committee held a hearing to discuss, among other issues, the following interim charges: “Methods to increase public participation in the tax rate-setting process” and the “[r]equirement that property appraisal values may not increase by more than inflation and/or population growth or another amount to be determined by local taxing authorities, with a maximum cap of 10 percent.”

As to the first of these charges, some members of the committee and various witnesses claimed that the effective and rollback property tax rate calculations have become so cluttered with “carve-outs” and other exceptions that local governments can secretly raise taxes without the public knowing about it. It was also claimed that cities and counties were responsible for these “carve-outs” and that TML and other organizations are to blame for fighting against truth-in-taxation legislation generally. (CLICK HERE to hear TML blamed for fighting truth-in-taxation and to hear cities blamed for their “boundless avarice” when it comes to property taxes.) In reality, most of the exceptions to the effective and rollback rate formulas were either: (1) responses to unfunded state mandates placed on cities and counties, or (2) necessary adjustments to hold cities harmless when the legislature took property off the tax rolls through state-enacted property tax exemptions. Many “carve-outs” were done administratively by the state comptroller in response to new state laws. In other words, if the effective and rollback rate calculations are confusing, it’s because of legislative mandates and tax exemptions, not city actions.

The committee also considered lowering appraisal caps from the ten percent in current law to some lower figure, but there wasn’t as much interest in this topic. The massive fiscal hit that the state budget would receive by removing taxable value from school district tax rolls makes appraisal caps a tough sell.

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