Mayor blasts governor’s property tax plan, says it will increase taxes

In an article posted today on his web site, Mayor Travis Mitchell criticized Gov. Greg Abbott’s recently announced property tax proposal, calling it "political maneuvering" that "will actually raise local taxes" and jeopardize Kyle’s "long-term economic prosperity."

Earlier this month Abbott announced one of his top priorities for the 2019 legislative session would be to force cities to limit their annual property tax revenues to 2.5 percent above what they collected the previous year unless two thirds of their voters approved a higher amount. His plan would also prohibit a municipality or a school district from issuing bonds unless two-thirds of the voters approved the debt issuance in an election that attracted at least a third of the jurisdiction’s registered voters.

For the record, never in its history has Kyle had a municipal election in which a third of its registered voters cast ballots.

"Abbott’s plan is wrong for Texas," Mitchell wrote. "I only hope that voters see through the political gamesmanship coming from our state capitol.

"Unfortunately, Abbott’s plan is more about political maneuvering than sound fiscal policy," the mayor said. "Hidden beneath multiple layers of state budgetary complexity is a disturbing truth. Abbott’s ‘solution’ will actually raise local taxes, not lower them. And it will do so in a way that dramatically reduces both transparency and quality of service."

Mitchell cited examples showing how Abbott’s plans could cripple the operations of both city government and the Hays Consolidated School District.

Later this year, according to the mayor, the city will begin work on the expansion of its wastewater treatment plant, the design and construction of which has been mandated by the Texas Commission on Environmental Quality. "If we are not able to complete the project to their specifications and within the proper schedule, TCEQ will either fine the city or, perhaps, take over our plant," Mitchell wrote. He said the expansion costs will be financed with cash on hand combined with developer contributions. But, he added, the city will still have to borrow money, through the issuance of Certificate of Obligation bonds, to bridge the gap between the actual construction and the time the city receives those developer contributions. The contributions would be used to offset the loans.

Currently, the only requirement for issuing CO bonds is for a majority of the city council to approve a measure to do so. However, according to Mitchell, if the governor has his way, the city would have to conduct an election in which one third of the registered voters cast ballots and 67 percent of them approved the bond proposal. By comparison, in modern-day politics, a "landslide" win is one in which one side in a two-sided election attracts 58 percent of the vote.

Should either benchmark — the two-thirds approval or the 33 percent voter turnout — not materialize, the proposal would fail. In that almost certain outcome, Mitchell wrote, "The city would default on its obligation to serve entitled future developments, would enter into a growth moratorium, and Kyle’s prospects at long-term economic prosperity would immediately be in jeopardy."

Mitchell also pointed out, had Abbott’s plan been in effect last year, the Hays CSD bond proposal for a third high school and two elementary schools would have failed because it received 65 percent voter approval, 2 percent below Abbott’s recommended minimum, and only 4 percent of the registered voters cast ballots, 29 percent less than what the governor’s plan would require.

You can read Mitchell’s entire article here.