I’m a small-town Texas entrepreneur with big concerns about out-of-control property tax bills.
The Texas Public Policy Foundation recently allowed me to share my story at its annual Policy Orientation. The opportunity gave me a chance to relay my struggle and get to know others who are in a similar situation.
Upon getting married, I purchased a little cabin in Canyon Lake, Texas which was all I could afford at the time. Soon after purchasing the lot, we found out that it was misrepresented by the real estate agent, as it didn’t have a garage or space for one. I would eventually have to buy the lot next door to add one.
Over the next 30 years, our family grew to include four children in that house, even though it had only three small bedrooms. We added on as we could, including a garage and a room above it. Thirty years later—which is the point of my story—the monthly mortgage payments at the time I paid off the house were less than the monthly taxes owed.
The plan was for my kids to inherit that house. But they’re not going to be able to pay the taxes on it, let alone keep the house up in the situation we’re in now.
The 86th Texas Legislature in 2019 enacted reforms in Senate Bill 2 that put into place a 3.5% limit on the growth of property taxes levied by cities, counties, and certain special districts. Unfortunately, the bill didn’t go far enough to stem the tide of fast-growing tax bills. Our taxes have gone up substantially since the legislation took effect.
For example, just the little lots we bought to put our garage on were appraised at twice their value this year as they were last year, and they’re still considered an empty lot by the county because we never franchised the property. The resulting property taxes continue to skyrocket. This means no relief.
Unfortunately, my business, Eyetopia Inc., has been in a similar situation.
When our office rent started going up we decided to buy a small building to help us better afford our cost for office space. Our building sits on a lot that is less than half an acre but the appraisal for business property also doubled from last year, making our business property taxes double since we bought the building five years ago. As you know, the Texas Legislature enacted a franchise tax that is based on the gross revenue we make, not our profit. The franchise tax is now close the cost of one employee’s salary, which has prevented us from replacing a recently departed staff member. The money for that salary is now used for the annual franchise taxes.
We’re being over-taxed three ways: home property taxes, business property taxes and business franchise taxes. Our revenue hasn’t gone up since COVID-19 hit, but our taxes continue to skyrocket.
I’m 68 this year, and my plans for retirement are nil. I’ve told my kids jokingly that when I’m too old to drive, they’ll have to drive me to work every morning because I’m still going to be working, and it’s mostly because I’ve got to pay these taxes or lose our home.
If I could wave a magic wand and get the Legislature to do anything, it would be to eliminate property taxes. I’d replace it with a flat sales tax rate with a broader base to maintain a balanced budget.
The elimination of property taxes is integral to protecting the natural right to property. The right to property was supposed to be endowed by our Creator, just as the right to life is. In the old days when they started this country, you could be a murderer, but they still wouldn’t take your property from your family; they would just take your life.
I think we’ve lost that understanding that property is a right of ownership. So, stop taxing property completely, start taxing sales. If I don’t want to buy the big fancy boat, I don’t have to.
A sales tax gives me some control over how much I pay in taxes by how I spend my money. And that’s how I think Texas should be doing it. That’s the Texan way!