Houston's Revenue Cap Discussion Heats Up

Posted by [email protected] on Jul. 6, 2017  /   0

Houston property owners, residential and commercial alike, are growing more interested, and possibly concerned, about the suggested lifting of the city’s revenue cap. In 2004 Houston voters approved a revenue cap, limiting annual property tax revenue growth to either 4.5% or the combined rates of inflation and population growth. Now, voters can expect to vote on this revenue cap once again in November 2017.

What to know:

Mayor Turner is suggesting voter’s lift the revenue cap to subsidize the increasing fiscal shortfalls the city is experiencing. "The revenue cap works against creating one Houston with opportunity for all and the ability to address pressing needs like flooding; transportation and mobility; parks and added green space; affordable, workforce housing; and homelessness," Turner said, as quoted in the Houston Business Journal.

While the Mayor has called for budget reductions within city departments to alleviate the anticipated $160 million budget shortfall, he suggests these alone cannot bring Houston to where it needs to be fiscally. Officials estimate the revenue cap prevented the collection of approximately $220 million in the most recent fiscal year alone.

On the other side of this debate, there are those who feel removing the cap could mean costly consequences for property owners in Houston. The revenue cap, or as it translates in practice the property tax cap, is seen as the only measure preventing property taxes from being raised arbitrarily each year based on the city’s desired spending.

As Bill King reported in the Houston Chronicle, “For the last three years, the average increase was almost 7 percent. And, according to the city's most recent monthly report, property tax revenues so far this year are up an eye-popping 15 percent.” And while this percentage may drop due to refunds based on owners’ appeals, the estimated increase still lingers at 5 percent. Consider these significant increases are happening while the cap is in place, it’s not hard to imagine what they could grow to without any restriction.

Bottom Line:

There’s certainly more to the story here and we encourage you to research the topic and form your own opinion as a voter. For our part, The Institute of Real Estate Management, Houston Chapter stands firmly in opposition of removing the revenue cap.


About the Author: Lindsay Konlande currently serves as the Association Assistant for IREM Houston. Lindsay earned her Bachelor Degree in Communication from Texas A&M and has several years of experience in marketing, public relations and copywriting.

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