When most Americans think of Texas, high taxes are not the first thing to come to mind. Over the past few decades, the "Texas Model" has been one of less state control of day-to-day activities, including lower taxes and light-touch regulation.
But to a growing number of state leaders and lawmakers, Texas is hardly a bastion of limited government. Year-after-year, Republican Gov. Greg Abbott and legislative allies have repeatedly castigated local officials for raising property taxes. But given state constitutional constraints on interfering with local taxes, the Texas Legislature cannot simply set local rates.
The proposed solution, currently in legislative limbo, is to force a local referendum whenever municipalities raise property taxes beyond a certain percentage. While rapidly growing tax burdens are indeed a problem in the Lone Star State, solving the issue with mandatory referenda is a wrong-headed response. Ultimately, taxpayers fare best under a system of local control and experimentation.
As the recent conclusion of the Texas Legislature's Special Session has demonstrated, lawmakers can't seem to agree on how to address the escalating property tax problem gripping localities. While the Texas Senate wanted a mandatory referendum to be triggered should localities raise property tax rates above four percent, the House refused to go below six percent. After the House adjourned without caving, the Senate shelved the matter for the time being. But it will almost surely reemerge in the future, as Texas's property tax problem shows no signs of abating.
Forcing a referendum in the event of a property tax increase may seem like a necessary corrective action to local government run amok. And large-scale referenda have thwarted large tax increases before, so it's reasonable to assume that voting is a powerful tool against tax hikes. But in seeking to hold local officials accountable for heavy tax burdens, Governor Abbott and his legislative allies are abandoning the principle of local control.
Bear in mind the slippery slope. If the state can force local referenda for rate increases, why stop there? If the state government is to brazenly interfere with the workings of local elections, why not just set a maximum property tax rate?
Ceding control to localities is not an end in itself. Just as giving states sufficient flexibility to set their own tax and regulatory apparatuses enables experimentation, so too does local control. Politicians and policy analysts can gauge best practices, comparing divergent state and local policies to see what works and what doesn't.
Property taxes vary widely across the country, but direct comparisons between municipalities are difficult because most variation is between states rather than within states. And comparing "outcomes" between a low-tax jurisdiction in Nebraska and a high-tax jurisdiction in Texas carries little weight, due to differences in overall economic conditions between states. Giving municipalities within a state free rein to vary their property taxes enables natural experiments, where similar, neighboring jurisdictions can reasonably compare outcomes after pursuing different property tax policies.
This is not to say that local control is a sacrosanct principle. Sometimes localities simply cannot be trusted to curb their own excesses, and require states or even the federal government to stop officials from preying on citizens. But the mandatory referendum schemes proposed would do little to curb underlying problems. Even if voters repeatedly rejected property tax increases in mandatory referendums, average annual homeowner savings would only amount to $20-$30 a year. Moreover, many localities would remain untouched by the mandate.
There's no denying that Texas has a significant property tax problem. Property taxes in the Lone Star State are the third-highest in the nation, and may eclipse those of blue states like New Jersey and Illinois if nothing is done. Yet growing burdens should not serve as a pretext for the state government to interfere with the affairs of localities. Rather, state lawmakers should respond to the crisis by pulling back underfunded mandates that squeeze local budgets to begin with. Taxpayers are best served with a state system that lets one thousand flowers bloom, while ensuring that localities aren't burdened with the dictates of Austin.
Ross Marchand is a policy analyst for the Taxpayers Protection Alliance.
If you would like to write an op-ed for the Washington Examiner, please read our guidelines on submissions.