Report: Legislature can stop property tax hikes by halting local 'unrestricted spending'

With city and county government spending surpassing both population and inflation, TPPF argues no end is in sight unless the state intervenes. 

Under the Texas Constitution, state government has constitutional and statutory spending limits. Local governments don’t have such restrictions but could if the legislature acts, TPPF argues. It recommends that the legislature enact local government spending limits similar to the level to which the state is subject.

Increased and unrestrained spending leads to “larger tax bills, bigger government, and mission creep” as well as wasting taxpayer money, TPPF argues.

The report evaluated the budgets and spending patterns of 10 city governments. In eight, spending outpaced population growth and inflation (P&I). Dallas had the biggest divide spending growth of 70% and P&I of 55%. 

San Antonio had the next highest difference with its budget increasing by 75% and its P&I by 44%, according to the data.

Under Houston Mayor John Whitmire, who has led through fiscal restraint, the state’s largest city’s budget growth and P&I was the same of 41%. Houston is the only city listed with a zero percent difference between the two metrics. 

The report also highlights examples of wasteful spending, including Austin officials spending more than $1 million to redesign the city logo. At the same time, the city council threatened to cut emergency services after a massive tax increase they proposed failed. Voters soundly rejected Proposition Q, which would have increased the city’s property tax rate by more than 20%. This is on top of the city council increasing spending and taxes every year.

In Dallas, the former Democratic mayor Eric Johnson recently pleaded with the city council to reduce spending and stop increasing taxes. Instead, the city council voted 11-3 to pass a record $5.2 billion budget, including tax increases. Johnson, one of three to vote against it, said the “bloated budget fails to provide much-needed tax relief for Dallas residents," CBS News reported. 

In Harris County, commissioners just approved increasing constables’ salaries to a record $300,000. Constables, who don’t have the same authorities as police, will now make more than the vice president of the United States and more than double the salary of the governor. 

“Unfortunately, there are no mechanisms outside of elections to prevent excesses in local government spending,” Bonura said.

The state is subject to four constitutionally mandated spending limits and one through state statute. Article III, Section 49a of the Texas Constitution imposes a balanced budget limit. Article VIII, Sec. 22a requires a restraint on the rate of growth of appropriations to the estimated rate of growth of the state’s economy. Article III, Section 49-j requires a debt limit tied to 5% of a three-year average of unrestricted general revenue. Article III, Section 51-a limits welfare grants. Texas Government Code Sec. 316.001 restricts general revenue-related growth limited to P&I. 

Gov. Greg Abbott and the leaders of the Senate and House have identified limiting government spending as a legislative priority for the next legislative session. They argue imposing such limits will also help reduce property taxes.