There have been renewed calls in Texas for property tax reform as property taxes across the state could surge up to 50% this year, yet a recent report by the Texas Taxpayers and Research Association (TTARA) pointed out that it very well could have been even worse.
Appraised property values are expected to increase across the state of Texas by 20% to 50% this year, a recent report on TheTexan.news said. Lt. Gov. Dan Patrick is taking aim at property taxes in the Texas State Senate, where he introduced an item that will explore the elimination of the school district maintenance and operations (M&O) rate, which is responsible for the largest portion of Texas property taxes.
Property taxes are made up of the M&O rate and the Interest and Sinking Rate, The Texan said. The former funds daily and yearly expenditures while the latter is typically used for more capitally intensive projects.
"Texas property owners need to be prepared for the sticker shock that home shoppers have been experiencing the past year," the TTARA report said. One bright spot, however, was that 2019 reforms reduced property taxes by a collective $6 billion across the state.
School districts account for over half of the local property taxes collected every year, and the amount has been increasing yearly since at least 2017, Brad Johnson of The Texan tweeted. He cited data from the comptroller's office.
Various parties disagree about what should be done to reduce property taxes, The Texan said. Gov. Greg Abbott wants a compressed rate but does not want to do away with the M&O rate altogether. Rep. Dustin Burrows (R-Lubbock) prefers property tax reform to take place through education code reform. The Texas Public Policy Foundation wants portions of the state budget surplus to replace M&O funding.
Property tax in most independent school districts (ISDs) outstripped the preferred rate of growth from 2016-2020, a recent report from the Texas Public Policy Foundation said. Austin ISD's property tax grew from $1.2 billion to $1.6 billion during that time period, an increase of 33.4%. The city's aggregate population and inflation grew by 4.6% during that time, resulting in 28.9% faster growth than the ideal growth rate.
Katy ISD and Conroe ISD were the only two school districts in Texas that kept their property tax growth rate below the preferred rate of growth.