A Texas House committee is examining the state’s property tax system as lawmakers prepare for another round of tax relief during the 2027 legislative session.
The House Ways and Means Committee met Tuesday to review previous property tax relief efforts and consider options for further reducing the burden on Texas property owners.
The hearing comes as Gov. Greg Abbott, Lt. Gov. Dan Patrick, and House Speaker Dustin Burrows have each weighed in on the property tax debate ahead of the upcoming session.
Abbott is pushing lawmakers to eliminate school maintenance and operations property taxes for homeowners, a proposal he has said would cut the average Texas homeowner’s property tax bill roughly in half. Abbott’s plan calls for the state to replacing local school property tax revenue for homeowners with state funding.
The governor has paired that proposal with broader structural changes intended to prevent other local taxing entities from consuming the savings. Those include limiting local government spending growth to population growth plus inflation or 3.5 percent (whichever is lower) and requiring two-thirds voter approval for local property tax increases.
Abbott has also proposed moving properties to five-year appraisal cycles and lowering the homestead appraisal cap.
Patrick has championed a narrower property tax package centered on expanding exemptions rather than fundamentally restructuring the property tax system.
His proposal would increase the homestead exemption by an additional $40,000, extend senior-style property tax freezes to homeowners beginning at age 55, and cap city and county budget growth at 3.5 percent.
Burrows has not explicitly endorsed Abbott’s proposal, though he recently appeared alongside the governor at an affordability campaign event where Abbott promoted the plan.
His office previously told Texas Scorecard that House lawmakers would work with Abbott and Patrick toward a comprehensive property tax package.
“Property tax reform will be prioritized next session. The Speaker is committed to working with Governor Abbott, Lieutenant Governor Patrick, and members of the Texas House on their proposals and is confident that the final legislative package will be the most significant in modern history,” said spokesperson Kim Carmichael.
During Tuesday’s hearing, Texas Education Commissioner Mike Morath detailed how previous rounds of property tax relief have reduced the amount Texans pay toward public schools.
Since 2019, lawmakers have used a combination of tax rate compression and increases to the homestead exemption to shift a larger share of school funding from local property taxpayers to the state.
Morath’s presentation showed that annual maintenance and operations property tax relief enacted since 2019 has grown to approximately $23.5 billion. The state is also providing approximately $1.3 billion annually in relief on school district debt-service taxes.
Lawmakers also examined what it would take to go further.
State Rep. Cody Vasut (R–Angleton) pointed to data presented by Morath showing Texas school districts are expected to collect approximately $29.2 billion in M&O property taxes during the current school year.
Vasut asked whether eliminating the school M&O tax and replacing it with surplus sales tax revenue or other state funding would require approximately $29 billion to $30 billion annually.
“Per year, yes,” responded Morath.
The figure represents revenue already being collected from property taxpayers rather than a new expense. Eliminating the tax while maintaining current school funding would instead require the state to replace those local collections with other revenue.
For comparison, Texas’ current two-year state budget authorizes approximately $338 billion in spending from all funding sources.
Morath explained that reducing school property taxes does not inherently mean reducing funding for public schools.
Texas’ school finance system combines locally collected property taxes with state funding. As lawmakers have compressed local school tax rates and expanded exemptions, the state has assumed a greater portion of the cost.
Total annual state and local Foundation School Program funding has increased from $47.44 billion during the 2015-16 school year to a preliminary $72.55 billion this school year, according to Morath’s presentation.
Morath told lawmakers that the amount spent on schools and the source of that money are ultimately separate policy questions.
“If you have a target of how much you want to spend, you just need to make sure you have enough variable revenue sources to reach that,” said Morath.
