Estimated Time to Read: 5 minutes
The small city of Smithville, Texas, recently became the epicenter of a heated debate over a proposed property tax increase of nearly 13%. Leading the charge against this proposal was Texas State Representative Stan Gerdes (R-Smithville), who urged the Smithville City Council to reject what he called a massive and reckless tax hike that would harm local families and businesses. Gerdes’s efforts underscore a broader issue affecting cities across Texas—runaway spending, debt, and tax increases by local government jurisdictions.
As a former Smithville City Council member, Gerdes is well-acquainted with local governance challenges. When he learned of the proposed tax hike, which represented the highest increase allowed without a public vote, he immediately took action. He issued a press release condemning the proposal and called on Smithville residents to stand against what he saw as harmful fiscal policy.
“Texas businesses and families are tightening their belts under the inflation caused by the disastrous Kamala/Biden administration, and local governments must do the same. It is irresponsible for the City of Smithville to squeeze every last dollar from our taxpayers in a time of economic hardship,” Gerdes stated. He criticized the proposed tax increase as a tool to fund what he described as “liberal grants and pork-barrel projects that do little to benefit hardworking Smithville residents.” Gerdes further pointed out that the proposed tax hike would have been the largest in nearly a decade, undermining recent efforts by state lawmakers to provide tax relief to Texas families.
The City Council Meeting: Fighting the Tax Hike
On September 9, 2024, the Smithville City Council convened to vote on the proposed tax increase. Rep. Gerdes appeared before the Council, advocating for taxpayers and demanding a rollback of the city’s planned tax hike. His goal was clear: to prevent what would be the highest tax rate in the area, even exceeding that of Austin.
Gerdes’s remarks resonated with the many concerned citizens who attended the meeting, and their collective voices made a difference. The Council ultimately decided to cut $37,000 from the proposed budget, reducing the tax increase from the initial 9.9% (which would mean approximately a $54.18 increase on a $100,000 home) to 7.2%.
Gerdes highlighted several areas of wasteful spending in the proposed budget and drew comparisons to his experience as a state lawmaker. He stated:
When we encounter budget shortfalls in the Texas Legislature, we don’t throw up our hands and immediately reach into the pockets of taxpayers. We look at the budget, we cut unnecessary spending, and we find a way to make it work. This city should not be passing any tax increase. Find a way to deliver the relief our families need right now. I’m speaking here, in my own backyard, but make no mistake — voters are watching every local taxing entity. They will hold you accountable, and I will do everything I can to help them.”
It is notable that, since his election in 2023, Rep. Gerdes has had limited opportunities to vote on appropriations bills. During his brief tenure, he voted on just one appropriations bill in the 88th Legislative Session (2023), a session marked by a historic budget surplus and the passage of the largest spending increase in recent Texas history. Gerdes supported this legislation, which faced opposition from only 22 House members—18 Democrats and 4 Republicans.
A Partial Victory
While the reduction in the tax increase was a step in the right direction, Gerdes made it clear that it was far from a complete victory for Smithville taxpayers. He highlighted some immediate successes of the meeting, such as eliminating $21,000 in what he considered wasteful grants, cutting the Smithville mayor’s $6,000 vehicle allowance, and blocking a $10,000 performance bonus for the City Manager, who Gerdes dubbed Robert “Tax Hike” Tamble.
However, Gerdes argued that the Council’s action did not go far enough. He reiterated that the tax increase should have been rolled back entirely to the “no new revenue” rate, ensuring no additional burden on families already struggling in a challenging economic environment.
The “no new revenue” rate is calculated by dividing the previous year’s tax levy by the current year’s total taxable property value and then multiplying by $100. This rate adjusts for changes in property values, ensuring that local governments do not benefit from rising property values without voter consent.
Potential Legislative Solutions
As the 89th Legislative Session approaches in January 2025, state lawmakers could address these issues by:
- Closing loopholes that allow cities to exceed the 3.5% voter approval rate for tax increases.
- Limiting local government spending by expanding Texas’s constitutional Tax and Expenditure Limit (TEL) to include city and county expenditures, based on population and inflation growth rather than personal income growth.
- Restricting local governments’ ability to take on debt.
- Freezing school district maintenance and operations (M&O) property tax rates.
- Requiring local governments to undergo third-party efficiency audits to review potential waste, fraud, and abuse in spending.
Conclusion
The events in Smithville highlight the importance of community involvement in local government decisions. For too long, local governments have engaged in unchecked spending, increased debt, and operated beyond their means—all at the taxpayer’s expense.
Rep. Stan Gerdes’s willingness to confront one of the local governments in his district is a commendable example of how state lawmakers can leverage their platforms to drive change. As many local governments set their budgets for the next fiscal year, these events underscore a growing issue: while state lawmakers provide tax relief, they must also address the root cause of the problem—government spending.
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