Nichols Cautions Local Governments Against Raising Property Taxes
Last updated 7/28/2020 at 11:24am
As a former mayor and city councilman, I understand firsthand the challenges that are presented
when balancing a budget - in good times and bad. Currently, as a Senator and a member of the
Senate Finance Committee, I have the honor of working to ensure the state is responsibly
allocating the taxpayers money, and being a good steward of its resources.
During the 86th Legislative Session, I co-authored and helped pass Senate Bill 2, which lowered
the amount by which city and county revenues can increase to 3.5 percent per year. Prior to this
law being enacted, city and county budgets could increase by as much as eight percent each year,
without seeking voter-approval.
One provision in the law created an exception for local governments if a disaster declaration had
been issued by the Governor of Texas. Some counties and cities have interpreted this provision
to apply to both physical disasters, such as Hurricane Harvey, and financial disasters, such as an
Attorney General Ken Paxton has issued a formal opinion, in which he states, “A court would
likely conclude that the Legislature intended to limit the temporary tax exemption to property
physically harmed as a result of a declared disaster. Thus, purely economic, non-physical
damage to property caused by the COVID-19 disaster is not eligible for the temporary exemption
provided by Section 11.35 of the Tax Code.”
As a co-author of this bill, I whole-heartedly agree with Attorney General Paxton's findings.
Nobody could have ever foreseen a global pandemic which has resulted in a statewide disaster
proclamation, when Senate Bill 2 was passed. Texans have lost their jobs and are hurting
financially because of the global pandemic. This is not the time to raise their property taxes,
when the current economic crisis has hurt so many families already.
This is the time to tighten our belts, and limit unnecessary expenditures. That’s what the State of
Texas, local businesses and families across Texas are doing. I believe local governments must do
the same, or risk facing the consequences of fighting this battle. A legal fight to raise property
taxes, could cost taxpayers and communities even more of their hard-earned money.
In these uncertain times, Texans must work together and for each other to ensure our economy
and our beautiful state comes out on top, as we work through the economic struggles brought on
by this unforeseen global pandemic.