Reversing Kerr County’s tax freeze? The law makes it look impossible

Monday’s discussion involving the Kerr County Commissioners Court about revisiting the 2006 vote on freezing homestead property taxes for persons 65 and older and disabled people touched off a slew of conversations about the viability of such an action. 

During a problematic budget discussion, Pct. 2 Commissioner Rich Paces posited that those 65 and older weren’t paying their fair share while linking back to deciding to raise taxes by voting for a bond. 

Other commissioners chimed in with concerns about the potential long-term consequences of an aging population impacting the county’s ability to pay for its services. 

In 2006, Kerrville voters narrowly passed the property tax freeze — by 58 votes. At the time, it was a record turnout, at least according to the Kerrville Daily Times, with more than 6,000 ballots cast. For nearly three years, the issue of granting a property tax freeze to seniors and disabled people proved contentious in Kerr County. 

The Kerr County Commissioners Court adopted the plan in 2004 after voters approved it in 2003. What Rich Paces brought up on Monday was on the minds of those who warned of potential budget deficits in the years to come. 

But unraveling tax relief is almost impossible. And it appears to be codified in the original amendment. If you implement this rule, there’s no going back. Here’s one part of the law: “The governing body of a county, a city or town, or a junior college district may not repeal or rescind a tax limitation established under this subsection.”

“The governing body of a county, a city or town, or a junior college district may not repeal or rescind a tax limitation established under this subsection.”

Texas Constitution

And the real challenge facing Kerr County governments is that the older population continues to grow. Consider these Census Bureau statistics: 

• In 2000, people 65 and older comprised 24.5% of Kerr County’s population, growing a modest 12.3% between 2000 and 2010. However, between 2010 and 2020, that population grew by 18.8% — now representing 27.4% of the county’s population. 
• In 2021, 65-74 year olds surpassed 8,000 people for the first time. The coronavirus pandemic may have slowed things a bit because there’s a decline in those 75-84, a demographic that COVID-19 hit hard. However, those 85 and older reached nearly 2000 people for the first time. 

Of course, the underlying fight with property tax is the Texas aversion to taxes in general. Gov. Greg Abbott wants to eliminate property taxes, and if voters say yes in November to a cut, it could mean more coming in the future. 

The November ballot amendment calls for granting $100,000 in homestead tax credit — up from $40,000. Those 65 and older will claim that and an additional $10,000 credit. 

What does this mean for Kerr County’s future budgets? That’s tricky to forecast, but the state is already working to shore up the impact on school districts by giving them more than $12 billion to compensate for the shortfalls. However, it’s a one-time fix. The city of Kerrville relies heavily on property taxes but has other revenue that the county doesn’t collect, including a large chunk of sales and hotel occupancy taxes. 

By 2030, if Kerr County’s population continues to age, it could be a challenging budgeting process for all because no one seems to have an answer for how to fund the government.