America's Property Tax Advisor

Texas Governor Proposes Property Tax Plan


The Texas Legislature tried and failed to produce meaningful property tax reform last year and lawmakers won't be back in session until 2019. Nevertheless, Governor Greg Abbott wasted no time in unveiling a tax reform plan last month that he hopes will ultimately become law.


Revenue Cap


At news conferences held in Houston and Arlington, Abbott said businesses and homeowners are being crushed by property taxes. Over the past twenty years, property tax collections in Texas have increased by 195 percent.


Abbott called for a 2.5 percent annual cap on property tax revenue growth, a cap far lower than the controversial thresholds that lawmakers suggested during the 85th Legislature. Any increase above 2.5 percent would require the approval of a supermajority of voters (two-thirds percent).


The cap would not be applied to tax rates or appraised values; it would only pertain to the total amount of money that a local government can collect on existing land and buildings.


"This will keep property taxes in check, while still allowing for local governments and schools to increase revenue each year," Abbott said.


Unfunded Mandates


Abbott's plan also offers local leaders something last year's property tax overhauls didn't. The state would no longer be able to require local governments to provide new services without providing state funding to cover the cost.


Abbott explained, "If we are asking local governments to be more efficient and effective with their revenue, then the state can no longer place additional burdens on cities and counties through unfunded mandates."


Not a Tax Cut


While the Governor's plan would slow increases in how much money local governments can collect, it wouldn't necessarily lower individual property tax bills. That amount is set to appraised values and tax rates. So even if a tax jurisdiction lowers its tax rate, the tax bill could be higher if the property's appraised value increases.


It's unclear how much support the Governor's plan will receive. However, it promises to be a hot topic through the 2018 primaries and beyond. Abbott is seeking re-election in November.