The Case for the Bohac Bill
During the 78th Legislative Session (2003), State Representative Dwayne Bohac (R-Houston) authored HB 3223, an appraisal relief bill that would have placed an unprecedented 5 percent cap on annual increase in property tax appraisals. After a long, hard-fought journey through the Texas House of Representatives that cumulated in a rare, unanimous record vote of 134-0, the bill was sent to the Texas Senate where it was never called up for a vote.
Although HB 3223 came to halt in the Senate and the 78th Legislative Session has come and gone, Dwayne Bohac has vowed to continue the fight for property tax appraisal reform.
With a new legislative session now underway, Bohac has filed the new and improved “Bohac Bill”, HB 784. Like HB 3223, it will cap appraisals at 5 percent and give homeowners greater protection from appraisal creep that every year threatens to tax them out of their homes.
Virtually all taxpayers agree that property taxes are out of control. Texas property owners are in need of appraisal relief, and the “Bohac Bill” is a common sense solution that will help restore truth in taxation.
The problem
Between 1996 and 2003, local governments increased their property tax levies in excess of 71.5%. During that same period, Texas’ population and an estimated average Consumer Price Index (CPI) each grew nearly 16%. Statewide property tax revenues are growing many times faster than either index and twice as fast as both indexes combined. This means that local government property tax revenues grew, in just seven years, at the astonishing rate of nearly 4.5 times faster than population growth or the rate of change in the Consumer Price Index.
Between 1997 and 2003, average home tax bill increases average anywhere from 49% to 102% in major Texas cities. When you look at the increase between 2003 and 2004, you find one-year tax bill hikes of 9.2% in Houston, and nearly 8.3% in Dallas for an average home. This is a trend that is echoed across the state of Texas.
This was not accomplished by local officials raising tax rates, but through appraisal increases that leave many taxpayers scrambling to foot the bill. Regardless of whether you own or rent your home, live in an apartment, or run a business, you are severely impacted by such sharp increases in property taxes. This “appraisal creep” is an inevitable burden on Texas property owners and a back door way of collecting additional money without raising taxes. It is amazing to think about the average Houston homeowner now paying over 100% more in property taxes than just 7 years ago. Taxpayer salaries have not doubled over the past 7 years; their property taxes should not either.
The Bohac solution
Currently, under Section 23.23 of the Texas Tax Code, a 10 percent cap exists to limit the annual increase in appraised value of a residence homestead. Simply put, the “Bohac Bill” would cut this in half and expand the cap to apply to all real property.
It places an unprecedented five percent appraisal cap on all property taxes including school districts, cities, counties, special districts and any other taxing entities you may find on a tax bill.
By limiting the rate at which property appraisals can grow, the “Bohac Bill” allows property to reach market value over a longer length of time rather than through severe increases, giving taxpayers time to adjust to rising property values. This bill also seeks to prevent taxing entities from being able to increase revenue through automatic tax appraisal hikes instead of raising the tax rate and being held accountable. If taxing authorities cannot live within 5% of growth per year, than they should raise the tax rate and make their case to the public instead of hiding behind appraisal creep.
This is pro-economic growth, pro-business, and pro-taxpayer. This bill helps homeowners, renters, and businesses - both big and small. It helps first time home buyers who are struggling to keep up with skyrocketing property tax increases. It helps senior citizens and disabled individuals who live on a fixed income.
It is a common sense solution that helps people across the state in both high-income and low-income areas who every year see their appraisals grow out of control. In a nation that prides itself on private property rights and the dream of owning your own home, we cannot allow the house you can afford today to become the home you are taxed out of tomorrow.
Take action!
The “Bohac Bill” is back! Find out how you can help Dwayne make appraisal reform a reality and bring much-needed relief to Texas taxpayers.
Visit our “Frequently Asked Questions” for more information.
Statistical information provided by:
Office of Paul Bettencourt
Harris County Tax Assessor-Collector