The Snyder Tax Revolt

SNYDER, TX — Scurry County is undergoing a tax revolt. The west Texas county with Snyder as its county seat will be placed $4.5 million in the hole if citizens in the county vote to rollback the tax rate, County Judge Dan Hicks said. Many expected county services could be cut or suspended. The tax rollback election is January 28. Early voting begins January 13.

Scurry County’s sales tax rate in 2019 was 0.5 cents of the 6.75 percent State sales tax rate. But the contention with rollback proponents is the current county property tax rate of 0.4498, of which 0.3682 is for Maintenance and Operations (M&O) and 0.0816 is for loan servicing, called Interest and Sinking (I&O) (see tax stats here). Most citizens of Scurry County are impacted by five taxing entities, including the hospital district, Western Texas College, the City of Snyder and the school district in addition to the county.

After servicing all of the taxing entities, a citizen living within the City of Snyder pays $2.6425 per $100 in property valuation. The rollback election only impacts the county property tax rate that is 0.4498, a small portion of the overall 2.6425 property tax rate.

The State of Texas requires every property taxing entity to provide a “rollback rate” when adopting the next year’s tax rate. The rollback rate allows the taxing entity to maintain its current revenue plus and 8 percent increase for the next year. If the revenue expected from the adopted tax rate exceeds this, citizens can petition the taxing entity to demand an election to reduce the tax rate to the rollback rate. In Scurry County, the tax rollback, if approved by the voters on Jan. 28, will decrease the county tax rate from 0.4498 to 0.34970, or 10 cents. The rollback will decrease the projected county revenue for FY 2020 by about $3.1 million.

Scurry County Commissioner Pct.1 Terry Williams told citizens at a Dec. 30 special meeting on the rollback election that the projected $3.1 million in revenue to the county is needed to maintain the current level of services because of deficit spending in the previous four years.

“We spent reserves of $4.5 million out of deficit budgets and that left us without any cushion to pay for unforeseen expenses,” Williams said. Williams pointed at unfunded mandates that came down from the State for items like digitizing county records and Texas Commission on Environmental Quality (TCEQ) demands to fix water supply problems in rural areas. In all, Williams claimed there were $7.8 million in unfunded mandates over the four-year timeframe the surplus was spent. The surplus is gone now because the previous commissioners’ courts didn’t address budget shortfalls with tax increases, Williams argued.

The county only wants to maintain the FY 2019 tax rate into FY 2020, not increase it, and certainly not decrease it 10 cents as rollback petitioners demand. Maintaining the tax rate allows the county to manage a shortfall from the county’s FY 2020 $21.2 million budget, county officials argue.

An estimated $4.5 million shortfall if the rollback election is successful is a point of contention. Citizens wonder how, with the same tax rate and increased property tax valuations, the county is $4.5 million short? County Judge Hicks wrote that the county should realize a $3.3 million increase in sales tax and property tax revenue in FY 2020 primarily because of the increased valuation on minerals, up 54.24 percent year-over-year, and increased sales tax revenue from more commerce in good economic times. Yet, “The County will not receive 34 percent of that revenue,” the judge said. This is because Kinder Morgan, a large oil and gas property owner in the county, and Scurry County are in a dispute over Kinder Morgan’s appraisal. Subtract $1.4 million from FY 2020’s revenue because of that, the judge said. Add that $1.4 million the county will not collect this year to the $3.1 million shortfall a successful rollback election causes, that equals $4.5 million. The county will be forced to cut services, the judge argued.

Large corporations like Kinder Morgan suing county appraisal districts in Texas over property valuation increases are common. Law firms specialize in the practice. In 2018, Democrat candidate for Lt. Governor Mike Collier based his entire campaign on the issue.

Collier said that in 2006, a study indicated that from the largest appraisal districts in Texas, the State was losing $4 billion per year in tax revenue because of the loophole in a 1998 state statute called Equal and Uniform. Adjusted for inflation, he estimated that by 2018, that figure is closer to $5 billion annually, enough to fund any shortfall in public school funding during the last legislative session. Collier lost the election to incumbent Lt. Gov. Dan Patrick 51.3 percent to 46.5 percent in Nov. 2018.

In Kinder Morgan’s case, they are disputing the way the appraisal district came to a 54.24 percent increase in valuation of their oil and gas mineral rights there in just one year. Additionally, the company has appealed a lawsuit to the Texas Supreme Court disputing $14 billion in property valuations of Kinder Morgan mineral rights over several years in the 2010s. While the disputes are making their way through the courts, Kinder Morgan has withheld payment of a portion of its 2020 taxes to all Scurry County taxing entities, and a portion of that amount includes the judge’s estimated $1.4 million to Scurry County.

Kinder Morgan’s disputes are about how the county appraiser came to their valuation, not an Equal and Uniform argument.

What will happen if Scurry County voters approve the rollback? The impact will be ominous, county officials warn.

“Auctions of assets, dismissal of employees and boarding up buildings all over the county. Who will bring those services back? Will a private citizen or organization step up and dig millions out of that pocket? Are you and your friends going to pickup the trash in the park after the 4th? Who? It has taken 50 years and countless man hours, some volunteer and some paid by the county, to get these services to the point at which they are now folks... don’t blow it all away now,” warned Scurry County Commissioner Pct. 3 Shawn McCowen.

Judge Hicks listed $4.5 million in cuts that could be enacted if the rollback election is successful. Among them: EMS Payroll, payroll and fuel truck at the airport, no new voting machines, parks, eliminating the county trapper position, eliminating the golf course, cutting $475,787 from the public library, and eliminating the county youth center.

Proponents of the rollback argue that the judge is engaged in scare tactics. Increased property valuations impact everyone, not just Kinder Morgan, said citizen Ryan Byrd, one of the rollback petition's prolific proponents on Facebook.

“[I see] 3-5 houses for sale on every block in the city, but property is still appraised at oil boom prices. I’m still trying to wrap my head around $20K junk houses being appraised at $50K, $70K, $80K, and up. That can’t be legal,” he posted on Facebook.

Snyder is located at the intersection of US 180 and US 84 on the way to Lubbock from San Angelo.

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The author misplaced a decimal, The rollback rate is 0.1001 below the current tax rate, or 10 cents, not 1 cent as originally written. This is corrected.