Property taxes are a point of contention in Texas, an issue that draws bipartisan support for decreasing the property tax burden on Texas citizens.
A report published by the Texas Public Policy Foundation in February shows property tax increases for Texas' most populous cities compared to the tax's preferred growth rate, which is a combination of inflation plus population growth. Property tax in all 10 cities, including Austin, outstripped this preferred rate over the period 2016-2020.
"It’s not a stretch to say that property taxes are out of control in the Lone Star State. As a result, local governments are getting rich while families are forced to make hard decisions," Policy Director at Texas Public Policy Foundation James Quintero said in a newsletter last week.
According to the Texas Public Policy Foundation's "Just the Facts: Property Taxes in Texas’ Most Populous Cities, Counties and School Districts" 2nd Edition by James Quintero and Anthony Jones published in February, property taxes are unique in several ways. First, the report notes that property taxes are “the largest tax assessed in Texas.”
In 2019, nearly 50% of all tax dollars collected in Texas came from property taxes. The report also noted that there were 4,256 separate property taxing units in Texas in the fiscal year of 2019, some of which overlap. The report also claims that "the laws and systems surrounding Texas’ property tax are notoriously complicated, oftentimes requiring a taxpayer to seek help through consultants, accountants, advocates and attorneys." Not only are the tax laws complex, but they are also growing far faster than the preferred rate of growth, which is calculated as population growth plus inflation, according to Texas Policy.
In 2021, the Tax Foundation found that Texas had the sixth-highest property tax rate measured as property taxes paid as a percentage of owner-occupied housing value in 2019.
Austin's property tax grew 69.8% from $559.5 million to $949.8 million from 2016 to 2020, according to a report published by the Texas Public Policy Foundation. The combined population and inflation for the city grew by 10.2% during that time, resulting in a difference of 59.5%, according to Texas Policy.
The Balance ranked Texas in the 10 states with the highest property tax rates in the United States with a median payment of $4,065 per year, according to The Balance.