After the Texas Legislature claimed they had passed the largest property tax cut in Texas history, a new report shows that taxpayers are paying more in taxes. 

The latest report from the Huffines Liberty Foundation revealed that new numbers released by Texas Comptroller Glenn Hegar show total property tax revenue increased in 2023 by $165.2 million. 

Additionally, the report by former State Sen. Don Huffines and policy analyst Bill Peacock claims that there was never an $18 billion tax cut, but instead, only $12.7 billion was dedicated to new property tax relief in Senate Bill 2. 

Politicians fabricated the $18 billion so they could claim 1) it was the largest property tax in history—larger than the 2007 property tax cut, and 2) the tax cut used at least half of last year’s record $32 billion budget surplus. 

As reported by Texas Scorecard, SB 2 increased the homestead exemption to $100,000 and used around $7 billion to buy down—or “compress”—local school property taxes. Additionally, the compromise plan included what lawmakers called a “20 percent circuit breaker” appraisal cap on non-homesteaded properties under $5 million in value for a three-year pilot program. With previous property tax relief included, the package totaled around $18 billion.

The report from HLF also states that while the legislature reduced property taxes, they did not consider that schools, cities, counties, and special districts raised property tax revenue more than the legislature lowered it. 

“At the same time [the Legislature sends money to each school district and instructs them to lower their property tax rates], school districts and other local governments raise their property taxes to get more revenue, with each new dollar of local revenue offsetting a dollar of the Legislature’s tax relief,” reads the report.

It explains that despite the legislature’s missed opportunity to give Texans property tax relief, there are still ways to eliminate the school property tax. 

Huffines and Peacock recommend limiting the state spending growth to no more than 5.9 percent per biennium, freezing school M&O property taxes, using 90 percent of current and future state budget surpluses for property tax buydown, requiring voter approval for local governments to exceed the No-New-Revenue tax rate, and adding an amendment on permanent property tax relief to the Texas Constitution. 

“Texas taxpayers were robbed of a historic opportunity to eliminate the school property tax,” Huffines told Texas Scorecard. “Politicians must stop the endless quest of trying to solve the symptoms of a problem rather than solve the problem itself. In this case, the tax is the problem. So end it.”

The full report can be found here.

Emily Medeiros

Emily graduated from the University of Oklahoma majoring in Journalism. She is excited to use her research and writing skills to report on important issues around Texas.