LOCKHART, Texas — Some Texans in big cities like Austin and San Antonio say they're moving to nearby towns like Seguin and Lockhart in order to afford to buy a home.
- People are moving to smaller towns
- Towns are concerned about a drain on resources
While those smaller cities are welcoming their new neighbors, they're concerned about a drain on resources following state lawmakers passage of a property tax reform bill.
"We have grown from a sleepy town of about 7,000 people, we've almost doubled in size since I've been here," Lockhart Mayor Lew White said.
The average property tax bill in Lockhart is less than half what it is in Austin, and while Mayor Lew White welcomes new growth, he worries about a drain on resources.
"All those residents take more services," White said.
After the passage of Senate Bill 2, starting next year, cities, counties and other taxing units need voter approval before imposing 3.5 percent property tax revenue than the previous year. The cap is currently 8 percent.
White worries that new growth cap will hamper his city's ability to provide vital services.
"We're talking about police and fire, public works, we're talking about repairs, we're talking about street maintenance," White said.
To make up for a projected loss in revenue growth in property taxes, White's considering alternatives.
"One that was looked at was increases in the sales tax," White said.
Dale Craymer with Texas Taxpayers and Research Association said he doesn't think it will have to come to that.
"Our taxes aren't going to go down, but we've taken a significant bite out of how much they're going to grow in the future," Craymer said.
Craymer said what's misunderstood in the tax plan, is that the 3.5 percent growth cap doesn't apply to new homes or businesses.
"That new value is not subject to these restrictions. The restrictions apply to existing property so you calculate your tax rate based on that," Craymer said.
Despite that fine print detail, White is already considering taking it to the voters.
"I could see us on an annual basis, probably having to bump that cap," White said.
To ensure Lockhart's small town charm can accommodate big city growth.
The property tax reform plan takes effect January 1. While the measure was not designed to cut taxes, a separate school finance reform bill that passed is estimated to save the owner of a $250,000 home about $200 next year and $325 in 2021.