State lawmakers have set aside $15 billion of the proposed $130 billion budget for possible property tax relief. The state’s largest and oldest fiscal watchdog organization calls that “a great start” but says it “falls short of providing the largest property tax cut in Texas history.”
Both chambers of the Texas Legislature have unveiled their draft budgets for the 2024-2025 fiscal years.
With a $32 billion budget surplus, Gov. Greg Abbott has said that money should be “returned to taxpayers” and used to deliver “the largest property tax cut in Texas history.”
Tim Hardin of Texans for Fiscal Responsibility said his organization’s review of the draft budgets represent “a good start” but that more needs to be done.
“The current record stands at $14.2 billion in compression from the 2008-2009 biennium,” wrote Hardin. “To beat that, adjusting for inflation, the Legislature would need to provide around $20 billion in compression.
Because property taxes are levied locally, state efforts to reduce the property tax burden require a “compression” of local property tax rates.
Hardin continued:
We encourage the Legislature to continue down the path they have started and put Texas on a path toward the elimination of property taxes, and to come through on Abbott’s plan of the largest property tax cut in history by cutting more spending and providing at least $20 billion in M&O compression; preferably, however, the entire $32.6 surplus will be used.
Texans for Fiscal Responsibility has been promoting what they call the “Texas Prosperity Plan.” It would see lawmakers adopt “no-growth budget” operating—because “government is already too big.” They would use excess tax revenues to then eliminate school property taxes altogether over a period of several years.
