Local officials are split between those who favor Senate Bill 2 for giving more power to voters, and those who fear it will starve cities and counties of funds to pay for services.

Texas property values are skyrocketing. As a result, the state's property tax burden is now roughly tied with Illinois's as the second-highest in the country, behind New Jersey’s. Governor Greg Abbott named property tax relief as one of his emergency items for the 2019 legislature. Since then, a reform measure has been sailing through the Senate.

Houston Republican Sen. Paul Bettencourt chairs the chamber's property tax committee and is the author of Senate Bill 2. "We're not just fighting for the Texans that are – we're fighting for the Texans that will be," Bettencourt said. "We're fighting for the Texas Dream, which is the number one job creation engine for the country. And right now, property taxes is one of the largest threats to that."

Bettencourt tried, but failed to cut property taxes in the 2017 session. This time could be different. "We have two identical bills filed on a tax issue in the House and the Senate," the senator said. "Now that speaks to [not only] the cooperation and the leadership, but more importantly the determination to get this problem resolved."

The bills would cap the maximum rate property taxes can increase per year, the so-called rollback rate, at 2.5 percent. Anything higher would have to be approved by the voters. Fearing homeowners wouldn’t vote to pay more taxes, cities with growing populations testified against the bills.

"Dallas has acknowledged that we need to hire more uniformed officers and increase pay for all first responders. Think of what a 2.5 percent rollback rate would do,” said Elizabeth Reich, chief financial officer for the City of Dallas. “Not only could we not keep pace with current response levels, we would not be able to increase staffing or salaries to the levels we need.”

Houston Mayor Sylvester Turner and Harris County Judge Lina Hidalgo have issued similar statements. But not all local leaders share their fears. Chris Hill is County Judge of Collin County, overlapping Dallas. His county's population has soared over the past six years, putting pressure on public services from courts to road maintenance.

"Many will lament that Senate Bill 2 will cap our property tax revenues and violate the sacred principle of local control," Judge Hill said. "But quite frankly, we know here that the purest form of local control is allowing our citizens to vote on these property tax increases."

Homeowners and business leaders largely weighed in for the bill. Dan Allford, owner of ARC Specialties, has manufactured robots and industrial machinery in Houston for 35 years.

"We build big machines that require big buildings. We operate out of three buildings totaling 100,000 square feet. Last year property taxes were our third-highest expense, costing over $5,000 per employee," Allford said.

Allford said that limits his ability to expand and hurts his customers' ability to buy his products. He said he's constantly bombarded by opportunities to move his production offshore, but he hasn't – yet. "I'm an unapologetic free market capitalist," he said. "I don't fear competition. I crave it. I can beat the competition, but I can't beat tariffs and taxes."

Texas has been drawing more and more heavily on property taxes to pay for education. Efforts to reform school finance, and have the state pay more, are intertwined with property tax reform. There's a lot riding on getting it right. Dick Lavine, a fiscal analyst with the progressive Center for Public Policy Priorities, pointed to what happened in California, when residents voted for a measure known as Proposition 13, capping tax growth much as Texas is considering now.

"When I was in high school and college, which was in the 1960s, California was well known for the best schools in the country," Lavine said. "That's no longer true, and I think it's directly because of Prop 13 and undue restrictions on the ability to raise property taxes."

In the end, the committee easily approved the bill. Next stop, the full Texas Senate.

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