Good morning, 

Can state lawmakers really eliminate property taxes?

Here is today's Texas Minute.

– Brandon Waltens 

Monday, January 31, 2022
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• It's no secret that property taxes in the Lone Star State have been soaring for years, causing many Texas homeowners to feel like they can never truly own their homes—only rent them from the government. 
   
• Three-quarters of Texans say property taxes are a major burden for their families. Some are being taxed out of their homes.
   
• Texas' big burden has been recognized nationally as well. In February of last year, WalletHub reported that the state of Texas had the seventh-highest property tax burden in the United States, coming in lower than Wisconsin, Vermont, Connecticut, New Hampshire, Illinois, and New Jersey, where the annual taxes paid on a home priced at the state median value was $3,099.
   
• Just one year later, another report from the Tax Foundation has Texas ranked as the state with the sixth-highest property tax rate, preceded only by Connecticut, Vermont, New Hampshire, Illinois, and New Jersey.

• Republicans have controlled the state Legislature and held every statewide office for nearly two decades. Yet despite campaign promises to the contrary, property tax burdens have increased by 181 percent in that time, quickly outpacing several other states.
   

• The Lower Taxes, Better Texas plan from the Texas Public Policy Foundation would phase out most property taxes by 2033 by reducing government spending, and then dedicating surplus state revenues to be used in their place. 
   

• The TPPF-plan would not create any new taxes to achieve the goal of eliminating property taxes.
   

• The plan has three parts: Lower state spending to create budget surpluses, use state surpluses to lower local school taxes, and redesign Texas’ tax code so local governments are funded primarily by sales taxes.
   

• In 2021, the Texas Legislature passed a new state spending limit based on population growth plus inflation—the first step in the TPPF strategy to phase out property taxes.
   

• Under TPPF’s plan, surplus state revenue above the new spending cap would then be used to reduce local school maintenance and operations (M&O) taxes, which are essentially statewide property taxes.
   

• Over time, school operations would be funded by state-generated revenue instead of local districts.

• Republican primary voters will have a chance to weigh in with a non-binding proposition on their March 1 ballot. The ballot will offer a specific statement and ask if voters agree (“yes”) or disagree (“no”) with this statement:  Texas should eliminate all property taxes within ten (10) years without implementing a state income tax.
   
• Early voting in the primary election begins February 14. Election Day is March 1.

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