Dale Craymer, President of the Texas Taxpayers And Research Association, joins KVUE’s Ashley Goudeau in explaining the constitutional changes on the ballot.
Austin, Texas – In this week’s Texas This Week, Dale Craymer, President of the Texas Taxpayers And Research Association, discusses the May 7 changes to the Texas Constitution and how they could save homeowners money.
Three things to know in TX politics
1. Experts: Governor Abbott’s border inspections are costing the economy nearly $9 billion
Gov. Greg Abbott’s order that DPS soldiers should stop and inspect commercial trucks entering the United States at the Texas-Mexico border has expired, but the economic impact was felt for some time. Truckers had to wait for hours at the border, some running out of gas as their products, including produce, just lay there. The Perryman Group, a Texas-based economic research and analysis firm, estimates that the slowdown has cost the country $8.9 billion in GDP. For every day that trucks stood at the border, the daily loss to gross domestic product was $470.3 million. The stops, intended to stop drug smuggling and human trafficking, instead only uncovered vehicle violations such as under-inflated tires and oil leaks. The Texas Tribune reports that no drugs, weapons or contraband were found.
2. Former Texas Senator Wendy Davis is suing Texas over abortion rights
Former Texas Senator Wendy Davis has filed a federal lawsuit challenging Texas’ near-total abortion ban. Senate Bill 8 bans doctors from performing abortions as soon as fetal cardiac activity is detected — which is typically around 6 weeks gestation, before many women know they are pregnant. The law makes no exceptions for victims of rape or incest, only when a woman’s life is in danger. Breaking the law isn’t a crime, instead almost anyone can sue someone who “assists” a woman to have an abortion and is awarded $10,000. Davis’ lawsuit alleges that abortion funds, groups that help women financially to access abortions, are unconstitutionally harassed. Other plaintiffs in the lawsuit say they stopped donating to those funds after a Texas lawmaker sent cease-and-desist letters to the funds, citing Senate Bill 8 and an earlier Texas law. The purpose of the lawsuit is to declare both laws unconstitutional.
RELATED: Former state senator Wendy Davis files federal lawsuit against SB 8
3. Texas is suing the Biden administration to keep Title 42
Texas tries to stop Biden administration from finishing Title 42 The policy allowed federal immigration officials to turn migrants away at the border because of the COVID-19 pandemic. The order was issued in March 2020 at the start of the pandemic and is scheduled to expire on May 23. Texas Attorney General Ken Paxton filed a lawsuit Friday to uphold the policy.
Dale Craymer on nationwide constitutional changes
May is a busy month for Texas voters. The primary runoff will be held on May 24, and on May 7 voters will vote on local elections such as city council seats, school board bonds and city proposals, and two amendments to the state constitution, both aimed at offering property tax breaks. Early voting in this election begins Monday, April 25th. Dale Craymer, president of the Texas Taxpayers And Research Association, joined Ashley Goudeau to explain how the statewide changes could affect your tax bill.
Ashley Goudeau: For the sake of people who don’t know, tell us what exactly the Texas Taxpayers and Research Association is?
Dale Craymer: “We are a non-profit membership organization. Most of our members are companies that have a strong presence in Texas.”
Goudeau: And you all talk about taxes, especially when it comes to what’s in the best interests of taxpayers, right?
Craymer: Absolutely. We, we focus on taxes, so I don’t get invited to many parties. We generally like to talk about what we like to focus on.”
Goudeau: All right. Well, taxes are the main talking point for statewide voters in the May 7 election. I want to talk about the suggestions and explain what they are, so I’ll read each one. Let’s start with prop one:
The constitutional amendment, which authorizes legislatures to provide a reduction in the amount of a cap on the total amount of ad valorem taxes that may be levied on the homestead of an elderly or disabled person for general elementary and secondary public school purposes, will reflect any statutory reduction from the previous tax year in the compressed Maximum rate of maintenance and operation taxes levied on the homestead for these purposes.
What a mouthful. Also, people have a lot to digest, so make it easy for us, Dale, what is a prop about?
Craymer: “Unfortunately, it’s a very technical language. But bottom line, Ashley, what about in Texas when you turn 65 capped your school taxes or what you’ve paid that year. So people who are over 65 or who are disabled, their school taxes are limited. But what happened in 2019, lawmakers passed an initiative that is beginning to lower school tax rates. But a lot of these people are limited to the higher tax rates that were in place over the years. But what this does, basically what this change does, is it extends the tax breaks to those who are capped by lowering their tax bills, when school tax rates fall.
Goudeau: Let’s talk about prop two. This one is a little easier to understand and digest.
It is the constitutional amendment that increases the amount of exemption for homesteads from ad valorem taxation for public school purposes from $25,000 to $40,000.
Talk to us about what that would do.
Craymer: “And this one has a broader impact. This will apply to all homeowners, while Prop One only applies to people who are 65 or older or disabled. But Prop 2 increases the current homestead exemption. If your home is currently valued at $400,000, the homestead tax exemption exempts $25,000 from that, leaving you taxable on only $375,000 in value. Legislators want to raise that amount to $40,000, so they’re raising the allowance to save homeowners money. The average homeowner, if that happens, will find that his tax bill this coming October will be about $180 lower than if that didn’t happen. So basically the second proposal is a property tax break for all homeowners.”
Goudeau: If we look at it, some would say, but is it at the expense of the schools? We know that in Texas we fund our public schools largely through our property taxes. How does this affect school districts?
Craymer: “That’s an excellent question. If this goes through, it will not harm the schools in any way. Schools are generally promised a certain dollar amount per student in our school funding formulas. And should these proposals go through, the state will make that money through the formulas. There will be no loss of revenue for our schools.
Goudeau: Well, that sounds good to begin with, doesn’t it, Dale, if we’re talking about the state going to raise this money, where is the state going to get this money from?
Craymer: “Well, right now the state has a surplus of $12 billion, which is about 10 percent, so a sizeable surplus. But in the context of the big budget, these proposals do not really cost much money. So it is not a problem to finance them into eternity.”
Goudeau: Dale, this is all happening while the legislature is trying to find ways to offer Texans property tax breaks. Let’s talk about it a little bit. What is the property tax burden for homeowners in Texas?
Craymer: Well, Texas property tax rates are among the highest in the United States. For a homeowner, we’re probably the 12th highest state tax rate. With industrial real estate it’s a little different, a little more. We are ranked 7th highest. But our high property taxes are one of the prices we pay for not having a personal income tax in the state. As painful as those property tax bills are since you don’t have to file a personal income tax check, the numbers still work better for you in Texas.”
Goudeau: Talk to us about the process because it gets a lot of headwind when it comes to real estate valuations. However, those ratings have increased significantly across the state, right?
Craymer: They really did. And in all honesty, that just reflects the current real estate market. In Texas, we value properties at their market value – what the appraiser believes the home will sell for. But I know people are very worried about their estimates. All I can tell you is that your increase in assessment will not result in a corresponding increase in your tax bill for a number of reasons. One is due to legislation passed in 2019 — how values increase, as for example, as taxable value increases, the city of Austin must lower its tax rate so that it doesn’t take in more than 3.5 percent more money. So if you’re considering a tax base increase of about 30%, that means your tax rates probably need to go down by about 25%, 27%. This will save both homeowners and businesses a lot. Also, homeowners have added protection by being exempt from increases in value of more than 10%. Your taxable valuation can therefore increase by a maximum of 10%. The third thing that will help you is if these two voting proposals are passed in increasing the homestead tax exemption, it will also save taxpayers money. So I know everyone is freaking out about their estimates right now, but I can assure you we won’t see these kinds of tax increases… The truth is, the estimate doesn’t really determine your tax bill. Right now, everyone’s tax bill is zero. Those tax bills will not be finalized until cities and counties and the school district adopt their tax rates later this summer. Just because you think you have your estimate under control, people have to pay attention to the tax rates that jurisdictions adopt because that’s what really drives their tax bills. If local districts didn’t want to spend more money, our tax bills would go up, no matter what our estimates are.”
Important election dates on May 7th:
For more information on how to vote, see the KVUE Voter Guide:
May 7th Constitutional Amendments and Local Elections: What you need to know before you vote