Texas homeowners know that their property tax bill has climbed higher and higher. It’s outpaced many families’ incomes.
Property taxes in Texas are the seventh-highest in the U.S. Residents in Texas pay an effective tax rate of about 1.7 percent, one of the highest in the country, according to Rocket Mortgage. A median list price for a home is close to $285,000, with average annual property taxes of nearly $4,800.
This impacts renters as well. About 20% of every rent dollar paid by Texas tenants goes toward property taxes, according to the Texas Apartment Association. That share can be higher in the state’s urban areas.
The soaring property tax bill has gotten to the point where Governor Greg Abbott is calling for the complete elimination of property taxes.
“What we want to achieve in the state of Texas is to eliminate your property taxes. Make them go away,” Abbott told a cheering crowd of supporters.
On the March 2024 Republican primary ballot there was the question: Should Texas eliminate property taxes? And 77 percent of primary voters said yes.
It was a clear message and one that Texas Lt Governor Dan Patrick picked up on. But remember in 2022 Patrick had this to say: “If you eliminate all property taxes then you have no money left to do anything. This is a joke."
But Patrick who leads the Senate, has directed state senators to study how much it would cost to eliminate property taxes entirely.
Patrick ordered the Senators to establish and report on the cost of eliminating school maintenance and operation property taxes, all school property taxes, and all property taxes.
His directive told the Senators to “determine the fiscal consequences of each action, including whether revenue reallocations would be required for public education funding and local government funding, and impacts on the state's ability to respond to disasters and other urgent priorities.”
And Patrick wants to see how much state revenue would need to be generated to replace foregone property tax revenue, and from what source.
So either he had a change of heart, or he wants the Senators to make it crystal clear how disastrous no more property taxes would be for the state.
On September 4th the Senate Committee on Finance held a hearing to find out what it would take to eliminate property taxes.
And the reality is getting rid of all property taxes collected just by school districts would have cost the state $39.5 billion in tax year 2023—that’s according to the Legislative Budget Board .
Additionally, the state would have had to shell out another $42 billion to cover the property taxes collected by cities, counties and special taxing districts.
All together the state government would have had to come up with $81.5 billion to completely eliminate all local property taxes.
For more on the question of whether or not Texas should eliminate local property taxes, I spoke with Sheyrl Pace, a senior analyst at Texas Taxpayers and Research association.
But what about the politics of eliminating property taxes? It’s an idea that’s very popular if you don’t think too hard. There are other ways to lower property taxes, but the Republican leadership of Texas doesn’t seem willing to consider them. They include imposing a state income tax, not providing so many massive property tax abatements to corporations and establishing a property tax system that shifts the burden off the middle-class homeowner and on to commercial real estate and homes that are worth in the millions of dollars.
Jon Taylor is a professor of political science at the University of Texas at San Antonio
