Property Tax Post: Will Noise over Property Tax Reform Lead to Action in Texas?

Texas has recently been awash in proposed changes to its property tax system from newly-elected legislators, the newly-elected Lieutenant Governor, local officials, and public policy organizations. The proposals range from modest reforms such as hiring experts at the county levels, to the complete abolition of property taxes.

The Texas Public Policy Foundation, through Vance Ginn and James Quintero and a study authored by Arthur Laffer, advocate reforms that would completely eliminate property taxes and replace the revenue with a reformed, and increased sales tax.

At a roundtable of Austin mayoral candidates, several candidates voiced support and offered a variety of proposals on property tax reform. Candidate David Orshalick supported cutting property taxes 20 percent in all taxing districts across the board while Steve Adler, who came in first in voting and will face another candidate in a run-off, believes that Austin should take advantage of the option 20 percent homestead exemption that other Texas cities have instituted.

Several state-level officials also made property tax cuts a central part of their campaign platform. State Senator-Elect Paul Bettencourt (R-Houston) focused on property tax relief in his campaign, and announced on November 13 that he has already introduced S.B. 182 in the Texas Senate. The bill would automatically trigger a roll back tax rate any time a taxing district’s property tax revenues grow by more than 4 percent. Senator-Elect Bettencourt also announced that he plans to file more property tax bills in the near future.

Former radio host and Lieutenant Governor-Elect Dan Patrick has a history of opposing property taxes and has expressed  a desire to eliminate property taxes. He has also advocated modifying Texas’ tax formula and shifting to more reliance on sales tax. Governor-Elect Greg Abbott has expressed that tax relief generally is a priority, but he has not articulated a position on property tax reform.

It’s unclear when and whether it will happen, but it looks likely that property tax reform will be coming to Texas soon. 

Continue the conversation on Bloomberg BNA’s State Tax Group’s LinkedIn page: If Texas cuts property taxes, how should it make up the difference in funding for local services, if at all?

By: George Lynch

Sign up for a free trial of the Bloomberg BNA Premier State Tax Library and see a detailed discussion on state property taxes.

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