Texas’ “Big Three” statewide leaders have begun to coalesce around a proposed solution to delivering property tax relief this session: raising the sales tax.
In a joint statement released on Wednesday, Gov. Abbott, Lt. Gov. Dan Patrick, and House Speaker Dennis Bonnen announced their new policy goal:
Texans are fed up with skyrocketing property taxes. At the beginning of the legislative session, the governor, lieutenant governor, and speaker laid out an agenda for property tax relief through the passage of Senate Bill 2 and House Bill 2 to limit property tax growth. In addition to that effort, today we are introducing a sales tax proposal to buy down property tax rates for all Texas homeowners and businesses, once Senate Bill 2 or House Bill 2 is agreed to and passed by both chambers. If the 1-cent increase in the sales tax passes, it will result in billions of dollars in revenue to help drive down property taxes in the short and long term.
Though they have not specified exactly which legislative vehicle they would use to accomplish this goal, all available signs point towards House Joint Resolution 3 by State Rep. Dan Huberty (R–Kingwood), which would place a 1 percent increase in sales tax revenue towards reducing local property taxes to a statewide election before voters this November.
As filed, that legislation would provide a dollar-for-dollar swap. Reports out of the Capitol, however, have indicated that Huberty has prepared a committee substitute that would divert 25 percent of the increase to be dedicated towards increased teacher pay in an effort to gain Democrat votes.
That proposal brought criticism from Grover Norquist and Americans for Tax Reform, who called it a “misguided tax hike.” And though the legislation was scheduled to be heard in the House Ways and Means Committee on Tuesday, Chairman Dustin Burrows (R–Lubbock) withdrew the bill from the schedule early in the meeting.
Abbott, Patrick, and Bonnen have not responded to Texas Scorecard’s requests for comment on whether their proposal would be a true dollar-for-dollar tax swap.
And while specifics on the proposal have yet to be released, the Texas House Democrat Caucus has already voiced its opposition, calling it an “unfair, punishing sales tax hike on poor and working families.”
That opposition could ultimately prove problematic for the bill, as the resolution must receive the support of 100 members. Currently, there are only 83 Republican members in the Texas House.
House Bill 2, the House’s version of the 86th session’s marquee property tax reform bill, would offer voters more control over increases in their property tax burden. The bill is scheduled to be heard by the chamber on Thursday, while the Senate has not yet taken up its version, Senate Bill 2. In their current state, the House is set to pass the bill after carving out school districts and special taxing entities while the Senate does not yet appear to have the votes for its all-inclusive version. One hundred eighty prefiled amendments have been received by the House clerk for possible debate and adoption on the floor tomorrow.
