1	Tax Freeze “Ceiling” House Bill 136 and House Joint Resolution 16 Voters approved September 2003 (Section 11.261 of the Texas Tax Code)
2	The tax freeze can be adopted by the governing body of any Texas city, town, county or junior college district. Or Voters can petition for an election to adopt the freeze with the signatures of five percent of the jurisdiction’s registered electorate.
3	What is homestead tax ceiling? It is a limit on the amount of taxes you must pay on your residence. If you qualify your home for a 65 and older or disabled person homestead exemption, the taxes on that home can’t increase as long as you own and live in that home. (Taxes may be reduced but cannot go up; unless improvements were made to the homestead)
4	"Once adopted," Once adopted, the freeze becomes permanent and cannot be repealed or rescinded by any subsequent action of the governing body.
5	Estimated revenue loss due to reappraisals and future tax rate increases.
6	Transfer of Tax Ceiling to New Home The ceiling on the new home would be calculated to give the same percentage of tax paid as the ceiling on the original home. For example, if you currently have a tax ceiling of $100, but would pay $400 without the ceiling, the percentage of tax paid is 25%. If you move to another home and the taxes on the new homestead would normally be $1,000 in the first year, the new tax ceiling would be $250, or 25% of $1,000.
7	"A tax freeze will result..." A tax freeze will result in the shifting of taxes from seniors and disabled homeowners to younger taxpayers or business owners. (When taxes are raised to cover the loss of revenue only; younger taxpayers and businesses will pay the higher taxes)
8	"In 2005," In 2005, the State Comptroller’s Office conducted a telephone survey of 1,044 Texas cities, only 122 (or 11%) cities indicated that they adopted or were considering the adoption of a tax freeze. Some of the 122 cities included Brownsville, Carrizo Springs, Corpus Christi, Del Rio, Lubbock, McAllen, Pharr, Port Aransas, Seguin, Selma, and South Padre Island.
9	"In conclusion," In conclusion, implementing the irreversible tax freeze will limit the city’s flexibility and make it hard to predict future revenues. Adequate reserves are necessary to protect against such emergencies or strains on the city’s finances such as economic downturns. Reserve balances are also an important factor used by rating agencies to determine a city’s credit quality, which in turn translates to lower borrowing costs. Future legislative proposals which may reduce the cap in property value increases would take years to rebuild and regain the prior revenue stream necessary to provide services to its citizens, comply with mandates, repay debt, and rebuild services.
10	"It would be our recommendation..." It would be our recommendation that other alternatives be considered; such as, increasing the Over 65 exemption, and/or adding a disability exemption.