All candidates should support repealing the revenue cap

Long overdue to get rid of the stupid thing.

The Gulf Coast AFL-CIO released a platform for City Hall on Saturday that calls for eliminating Houston’s property tax revenue cap and avoiding worker layoffs.

The union has endorsed state Sen. John Whitmire’s campaign for mayor, and he was on hand at its annual Labor Day breakfast Saturday. The plan initially was for Whitmire to sign off on the platform, but he did not end up doing it.

Whitmire said he shares the union’s concerns and vision, though his support for some of the priorities — such as doing away with the revenue cap — is more conditional.

Before placing a referendum on the ballot, Whitmire told the Chronicle he will have to get the city’s finances in order. That matches rhetoric from Houston’s other major contenders for City Hall’s top job, who say they will need a few years before trying to amend or eliminate the cap that voters approved in 2004. It essentially ties the amount of increased property tax revenue the city can take in to population and inflation growth.

“I think we need to do some real housekeeping before we consider a revenue cap referendum,” Whitmire said. “After we do our due diligence and take measures to cut out conflicts of interest, waste and duplication, yes. But there are several steps that would have to be taken before we do that.”

U.S. Rep. Sheila Jackson Lee, Whitmire’s main rival, has offered a similar answer, saying she wants to get through a couple budget cycles at City Hall before making a final decision. Attorney Lee Kaplan has described himself as a “confirmed skeptic” of the idea, and former Metro Chair Gilbert Garcia has opposed it outright, saying it would be unwise to seek a change given the city’s inefficient spending.

Only Councilmember Robert Gallegos has said explicitly that he would make the case to the voters, though he cautioned they ultimately would make the call.

“Right now, the city has been able to continue operating due to the fact that we have (federal) money we were using, that’s coming to an end.” Gallegos said at a forum this week. “As the next mayor, I’m just going to be the leader to try to convince the voters the importance of getting rid of the revenue cap.”

Houston voters approved the cap in 2004, tying the amount of increased revenue the city can collect from property taxes to a formula that accounts for population and inflation growth, or 4.5 percent, whichever is lower. The city first hit the cap in 2015, and it has resulted in property tax rate cuts in eight of the last nine years.

In that time, the city’s tax rate has fallen 16 percent and City Hall has foregone about $1.8 billion in revenue that it would have collected if the tax rate remained steady. The median homeowner in that span has saved roughly $1,000, or $100 per year, although that calculation does not include the savings they will see this year, since the city adopts its tax rate in September.

You know how I feel about this. The cap is based on a fallacy and a “growth” formula that’s stricter than the state’s. It serves no useful purpose and is the main reason the city’s finances are a mess. I have no idea what Whitmire or any of the other candidates think “housekeeping” or whatever means before dealing with the cap, but as a reminder, about 65% of the city’s budget is for public safety, and the city is now forbidden by state law from cutting that. (Indeed, we are likely to spend a whole lot more in the near future.) You can twiddle around the edges, or you can recognize reality. I’m heartened by the number of candidates I’ve interviewed so far who have zeroed in on this rather than mouth the usual platitudes about cutting waste or whatever. I don’t see myself supporting anyone who doesn’t understand this and isn’t willing to work towards it.

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One Response to All candidates should support repealing the revenue cap

  1. C.L. says:

    Correct me if I’m wrong, but a revenue cap is the only thing the citizens of Houston have to prevent the taxing authority from nickel and dimeing and continuously and consistently raising the property tax rates. If the CoH is hyperconcerned about the monies coming in from the proeprty tax base, maybe they should revisit the decades of tax abatements awarded to developers and declare those immediately null and void.

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