The three Democrats on Commissioners Court have proposed an increase in Harris County’s property tax rate for the first time since the 1990s, an effort to ensure the county can continue to fund services, including billions in flood control projects, after a revenue cap passed by the Texas Legislature takes effect in January.

On a 3-2 party line vote on Tuesday, County Judge Lina Hidalgo and commissioners Rodney Ellis and Adrian Garcia pitched a plan to hike the overall property tax rate by 2.26 cents per $100 of assessed value. The result would be an ad valorem rate of 65.260 cents. The county budget office said the increase will boost the average homeowner’s tax bill by $37.65 in the first year, based on a home valued around $230,000.

Hidalgo said the additional revenue would help create a contingency fund to ensure the county can continue to fund services, such as health care, transportation and flood control, after the state revenue cap takes effect. Hidalgo was critical of the cap, which the Republican-led Legislature and state leaders hailed as long-overdue property tax reform. The ceiling limits annual revenue growth for cities and counties to 3.5 percent, above which voter approval is needed. The previous limit was 8 percent.

“Essentially, more people are coming to demand our services, to demand health care, to demand roads, flood control, but they’re telling us we can’t collect commensurate revenue to be able to afford those things,” Hidalgo said.

Notably, county leaders pitched voters on the $2.5 billion flood control bond issue last year while acknowledging it would require a tax rate increase of two to three cents.

In light of the state cap, cities and counties across Texas are grappling with how to prepare for a fiscal future with less flexibility for raising money. Travis County Commissioners Court last week signaled it would hike taxes to increase revenues the maximum 8 percent over the past year. The mayors of San Antonio and Austin are considering a similar strategy.

City Council on Wednesday cut Houston’s property tax rate, as it already is bound by a cap imposed by voters that limits property tax revenue growth to 4.5 percent.

The contrast between the city and county was not lost on some council members who criticized Commissioners Court for looking to raise taxes while Houston was being forced to trim its property tax rate to stay in compliance with the 2005 revenue cap.

Councilman Dave Martin urged residents to view the full breakdown of their tax bills, which include levies from several taxing jurisdictions.

“We always hear it on our end, while we continually decrease the tax rate, whether it’s a function of rev cap or whatever,” he said. “The fact is, we’ve decreased our tax rate since 2014 by 8 percent.”

Like Hidalgo, former county judge Ed Emmett, a Republican, also was critical of the Legislature’s approach to property tax reform. He warned the cap would hamper the ability of local governments to provide services in booming regions like the Houston area.

“In the name of property tax reform, the state has shackled local governments to a capped revenue source that is fundamentally unfair,” he wrote in a July op-ed in the Chronicle.

Hidalgo said a rainy day fund would serve as a hedge against the next natural disaster or economic downturn. Budget Officer Bill Jackson said the county had to trim its workforce by 2,000 employees during the Great Recession through layoffs and attrition, in part because Commissioners Court had cut the tax rate before the crash.

“At the time, we didn’t have a public contingency fund; that could have been a stabilizing factor,” Jackson said.

Ellis conceded that tax increases are among the most unpopular proposals politicians can float. He said the extra revenue is needed for the county hospital district, which is burdened with serving more than 1 million uninsured residents, and flood control district, which currently is working on more than 200 mitigation projects.

The Republican commissioners, Jack Cagle and Steve Radack, unsuccessfully lobbied their colleagues to lower the overall property tax rate by cutting the county and hospital district portions while leaving the flood control portion the same. Cagle said he resisted supporting a tax cut in 2018 in the wake of Hurricane Harvey because the county was unsure how much damage the storm had wrought upon the local economy.

Cagle said that while businesses have rebounded, homeowners who still are recovering deserve a one-year tax break.

“What has occurred is by the grace of God, we have done very, very well,” Cagle said. “But we still have some people who have property that is being taxed who have not caught up.”

Commissioners Court plans to hold three public hearings — on Sept. 20, Sept. 24 and Oct. 8 — before holding a final vote on the tax hike proposal.

State Sen. Paul Bettencourt, an architect of the Legislature’s property tax reform bill, decried the county’s plan Tuesday.

“This is a ‘maximum smash’ on taxpayers!” he wrote on Twitter.

Harris County Republican Party Chairman Paul Simpson dismissed the the tax hike as unnecessary.

"Democrat Commissioner Adrian Garcia often talks about how poor his constituents are, and with the help of Judge Lina Hidalgo and Commissioner Rodney Ellis, he voted to make them poorer," Simpson said in a statement.

Reporter Jasper Scherer contributed to this story.

zach.despart@chron.com