Texas Town Growing As It Refuses To Collect Property Taxes
By Hank Berrien
One small town in Texas is growing because it refuses to do one thing: collect property taxes.
In 2014, Von Ormy, Texas mayor, Art Martinez de Vara, issued his proposed 2015 city budget, which proposed eliminating property taxes. He told the Von Ormy Star, “In 2009 we established a goal of shifting the tax burden for operating the city from property taxes towards sales taxes. We did this because over 95% of sales taxes are paid by non-residents and we understood that we could increase sales tax revenue much faster than property tax revenue. Since that time we have increased sales tax revenue by over 400%. In order to have achieved the same revenue, we would have had to increase them by 300% from where we were in 2009.” He added, “I believe that government should not spend every penny it collects, rather we should spend what is necessary to deliver high quality core services to our residents. Excess taxation is unjust taxation.”
Von Ormy was not the first town in Texas to eliminate property taxes; others included Stafford, which eliminated property taxes as far back as 1995. The Von Orly Star reported in 2017, “The Von Ormy City Commission unanimously adopted its fiscal year 2018 budget on September 29 and maintained the city’s property tax rate at zero percent.”
Writing in the Houston Courant, Grace Watson, a legislative fellow at the Texas Public Policy Foundation, noted that Von Ormy voted in 2015 to reduce property taxes by 10% a year, adding, “The city now gets its revenues from sales taxes, franchise fees collected from utility companies, and miscellaneous permits.” Watson also pointed out that the city retains enough funds “to fully cover maintenance and operations costs for a full year in the event of a sudden emergency” and that Niche ranked Von Ormy as the suburb with the lowest cost of living in the San Antonio area.
As the BBC reported, Jess Fields, a policy analyst for the Texas Public Policy Foundation who has fought for the “liberty city” movement in Texas, stated in 2015, “The liberty city idea kind of goes back to the basic concept that people have a fundamental right to determine what kind of government they want to live under,” arguing that the regulations in large Texas cities restrict personal liberties. He stated, “I don’t deny that some of these regulations are well intended to promote public health and safety, but there’s a point at which these good intentions are eclipsed by their clear, negative, unintended consequences. We don’t want the government to tell you how to do every little thing with your property and what to do with your life.”
In 2015, Texas state senator Konni Burton introduced SB710, which would have required any change in property taxes to be approved by at least 60% of constituents in a public vote. De Vara, who was Burton’s chief of staff at the time as well as serving as Von Ormy’s mayor, stated, “It’s a really good experiment in democracy.” He pointed out that Von Ormy had no gun restrictions, no smoking bans and no fireworks ban. He concluded, “We’re not anarchists. We just believe in limited government.”
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