Before the next legislative session, the Huffines Liberty Foundation highlighted how lawmakers can provide permanent property tax relief to citizens.
HLF is a 501(c)(3) non-profit, non-partisan research institute whose stated purpose is to advance the cause of liberty, prosperity, and virtue in the State of Texas by educating citizens so they may hold their elected officials accountable. It is led by Don Huffines, former state senator.
HLF has released its latest Q&A fact sheet, Eliminating School M&O Property Taxes Is Only Path to Guarantee Permanent Property Tax Cuts.
HLF began by highlighting that Texas politicians have promised property tax relief three times in the last five years and failed each time. Even after the “largest property tax cut in history,” many citizens found their property taxes increased, and even those who did receive some relief will see their property taxes increase this year.
According to the fact sheet, “The reason for this is twofold. First, the state does not rely enough on compression to lower the taxes. Second, the state does not do anything to stop schools and local governments from continuing to raise property taxes.”
Compression is when the state sends additional education funding to schools using state tax dollars while requiring schools to lower their property tax rates.
HLF argues that compression is better than increasing the Homestead Exemption because it increases the property tax burden for non-homestead properties. Additionally, appraisal increases eventually erase any savings.
Thus, HLF maintains the only way to achieve long-term property tax cuts is by eliminating school M&O property taxes by gradually reducing the school M&O property tax rate to $0 over several years using state surplus revenue.
The “Largest Property Tax Cut In Texas History” from the last legislative session used a combination of compression and an increase in the homestead exemption to provide relief, however, overall property taxes, local government, and school district spending increased.
According to the Huffines Liberty Foundation, the state needs to do the following to accomplish long-lasting property relief:
- Limit State Spending Growth: By placing a limit of 3% on state spending growth, 90% of the resulting budget surplus can be used to eliminate school M&O property taxes.
- Freeze School M&O Property Taxes: This will keep school districts from undermining property tax cuts.
- Require Local Governments to Get Voter Approval to Increase Property Tax Revenue: If local governments believe they need more money, all they have to do is ask the voters.
- Keep Schools Fully Funded: The State of Texas already funds about 40% of government school budgets. We want to make that number 100% and take the school M&O property tax burden off local property owners, homeowners, renters, and businesses. No changes to school funding formulas.
- No New Taxes: We do not need to raise or create any new tax.
The 89th Legislative Session begins January 14, 2025.
