Patrick, Phelan pledge to address Texas' high property taxes


The leaders of the state legislature have vowed to address high property taxes this legislative session, in line with Gov. Greg Abbott’s pledge to provide the largest property tax cut in state history.

Abbott said the state’s record $33.7 billion budget surplus and record estimated biennial budget of $188.2 billion “does not belong to the government. It belongs to the taxpayers. We will use that budget surplus to provide the largest property tax cut in Texas history.”

Lt. Gov. Dan Patrick, who leads the state Senate, also addressed property taxes Tuesday after including the issue in a list of legislative priorities he previously proposed. This time, he provided a ballpark number to raise the homestead exemption to $70,00 up from $40,000. He also called for increasing the business personal property tax exemption from $2,500 to $100,000.

The business personal property tax exemption reduces the taxable value of a business’ inventory and other tangible property. In 2021, state Sen. Paul Bettencourt, R-Houston, filed SB 1449, which the legislature passed and the governor signed into law. It increased the exemption from $500 to $2,500 but did little to help businesses as costs and taxes rose disproportionately due to inflation.

Last week, after being sworn in, Speaker of the House Dade Phelan said one of his goals was to address the appraisal process. Previous attempts by the legislature to reduce property taxes have proved inconsequential as home prices soared due to appraisal prices, school property taxes and other factors driving up home values, and taxes, by large percentages.

Phelan said his constituents’ top concern was “the economy, inflation, difficulty in making ends meet, ever increasing property taxes that have led many to feel – year-in and year-out – they are renting their property from the government.”

He said, “Like them, I believe tax relief should be a priority. But time and time again, we have seen the legislature provide some form of property tax relief, but to make it lasting we must do something about runaway appraisals because taxpayers deserve better.”

Several lawmakers already have filed bills that would limit how much an appraised value of a residential homestead ad valorem tax could be increased.

While these proposals may provide some relief, real relief won’t be seen unless the M&O school property tax is reformed, and the legislature cuts spending, fiscal conservatives argues.

Several groups, including The Texas Public Policy Foundation, have proposed eliminating property taxes over time by using excess state revenue to pay down local school taxes.

Public school district taxes constitute the largest portion of property tax bills. A new tax structure, if implemented, would move toward funding local governments primarily through sales tax revenue while also fully funding public education.

In 2021, Sen. Paul Bettencourt and Rep. Tom Oliverson, R-Houston, filed bills to implement this approach but the Republican-majority House, led by Phelan, squashed it.

TPPF has also urged lawmakers to cut spending and commit to passing a budget with zero growth.

“From a limited government perspective,” it wrote, “the most ideal option would be to allow for no new growth in the next state budget.” Limiting spending “would demonstrate incredible fiscal discipline, control for new government growth, and make available a maximum amount of resources for tax relief purposes.”

Fiscal conservatives are also urging the legislature to enact meaningful property tax reform but point out this may be difficult to accomplish because Phelan appoints Democrats as committee chairs who block conservative bills and the majority of House Republicans have received F grades for fiscal responsibility.

According to the Tax Foundation, Texas ranks sixth highest for property taxes paid as a percentage of owner-occupied housing value based on fiscal 2018 data.

According to Tax-rates.org, counties in Texas collect an average of 1.81% of a property’s assessed fair market value as property tax per year. Texans pay the largest median property taxes in King County of $5,066, followed by $4,351 in Collin County, $4,260 in Fort Bend County, $3,972 in Travis County, and $3,817 in Williamson County.

Texas property taxes account for 3.65% of homeowner’s income, according to the site. With Texans earning a median income of $62,353 a year, Texas ranks 12th out of 50 states for property taxes as a percentage of median income, according to the site, which reports property tax statistics based on taxes owed on millions of properties across Texas.

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