Mayors Issue Dire Warnings About Local Property Tax Cap

North Texas Mayors issued dire warnings Thursday about the local property tax revenue cap being debated in Austin.

Bills in the Texas Legislature would reduce the annual rate of property tax revenue increase that cities could receive to just 2.5% instead of the current 8% before triggering a roll back election.

"Drastic measures would have to be made," said Dallas Mayor Mike Rawlings.

According to figures provided by Rawlings, the 7.5% property tax revenue increase that was included the current City of Dallas budget would be reduced by $32 million if the limit was 2.5% instead. That's the equivalent of 358 police recruits or 477 civilian employees.

The Dallas City Council did reduce the tax rate, but soaring property values still produced substantially more revenue.

Rawlings voted against the current Dallas budget because he wanted a lower tax rate, but he said the much lower revenue increase limit suggested in Austin would cripple the city's ability to provide services residents have demanded.

"It's a significant change from what the citizens of Dallas have wanted which is more, more, more, more. Now they're going to get less, less, less, less," Rawlings said.

The pending proposal would allow residents to vote for an increase higher than 2.5%, but in November, after annual city budget decisions are required in September.

State leaders also propose a 1 cent sales tax increase to offset the loss of revenue from reducing property taxes. But the extra sales tax money would go to the state and not cities.

Rawlings said Dallas taxpayers would end up losing $32 million in city services but pay $312 million more in extra sales taxes.

"The citizens of Dallas are going to be spending more money, sending it to Austin, and they're going to get less services," Rawlings said.

Fort Worth Mayor Betsy Price did not have as many figures available Thursday but she agreed her city would face a similar challenge from the proposals by state lawmakers.

"My issue here, it's all about local control. We're all elected to make decisions on behalf of our citizens just as they are," she said.

The Fort Worth leader also said the majority of property taxes go to schools and schools have been exempted from the tax caps proposed so far.

"Right now the average citizen believes they're going to get significant tax relief and this is not going to provide that relief," Mayor Price said.

In Dallas, resident Lindsey Deloache was walking her dog on the new trail in Royal Park. It's near a recently resurfaced section of Royal Lane that was in terrible shape before.

Deloache said she likes the changes.

"Yes, for sure. We see a lot of progress and it's nice."

But she's also seen a staggering increase in property value and property taxes.

"It's way too much," Deloache said. "So I understand an increase because I do want to see things like this and benefiting Dallas, but at the same time, too much can be too much."

A Texas House vote on the property tax cap was set for Thursday but it was put off for negotiation with Texas Senators through the weekend.

"We all want the same thing," Rawlings said. "Lets just be reasonable and talk about this and do this together instead of trying to figure out who the bad guy is.

The Mayors said a 5 or 6% cap would leave room for cities to provide services and still allow lawmakers to say they limited property taxes.