Lavine: Homestead adjustments 'were a small step in bringing our property tax system up-to-date'

Local Government
Dick lavine
Dick Lavine, a senior fiscal analyst at Every Texan. | Provided

Texas voters overwhelmingly approved a pair of measures designed to reduce property taxes May 7, but that doesn’t mean the battle for lower taxes has ended.

Proposition 1 passed with 86.91% of the vote and will take effect Jan. 1, 2023. It will reduce the property tax rate on homesteads for disabled people as well as anyone older than 65. It specifically reduces school maintenance and operation levies.

Proposition 2, which received the support of 84.82% of voters, increases homestead exemptions from $25,000 to $40,000. The average homeowner will see a reduction of around $175 a year. The amendment has a retroactive start date of Jan. 1, 2022, and immediately took effect.

Dick Lavine, senior fiscal analyst for Every Texan, an independent policy research and advocacy organization, told Austin Journal the vote was a positive sign, but much work remains. 

“The homestead adjustments approved by the voters May 7 were a small step in bringing our property tax system up-to-date,” Lavine said. “The increase in the statewide homestead exemption will take $175 off the tax bill of every homeowner, regardless of the value of their home. The other amendment simply gives those whose school tax bill froze when they turned 65 or became disabled the same tax break all other property owners received because of the 2019 school finance bill.”

Gov. Greg Abbott celebrated the news by tweeting, “Propositions 1 & 2 pass overwhelmingly statewide. Victory for ALL property owners in Texas.”

It might have been a victory, but the battle for fairer,  and lower, taxes continues to be fought. The Balance ranked Texas in the top 10 states with the highest property tax rates in the United States with a median payment of $4,065 per year.

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.

Texas Taxpayers and Research Association (TTARA) said local governments are making decisions that cost taxpayers money, adding that they appear addicted to new spending.

“The simple truth is no matter what your appraisal, property tax bills would not be going up unless local jurisdictions wanted to spend more money,” TTARA said in 2022 study. “Regardless of your 2022 appraisal, right now your 2022 tax bill is zero. Your tax bill won’t be set until the jurisdictions in which you reside decide how much money they want to raise and set their tax rates.”

report by the Texas Public Policy Foundation found that all of Texas’ 10 largest cities had property tax levies that grew faster than the preferred rate of growth, even when losing population, over the period 2016-2020.

Lavine said state lawmakers have the power to change the system and make it more equitable and less painful for taxpayers.

"The best way for the Texas Legislature to reduce pressure on school tax rates is to increase the state investment in the ‘basic allotment,’ which is the building block from which school-finance formulas are calculated,” Lavine told Austin Journal. “The state has the money available to pick up its fair share of the responsibility for educating our children, rather than leaving the lion’s share to local property taxpayers.”

In 2019, Lavine wrote a report titled “Bad Deal: Higher Local Sales Taxes Are Not the Way to Lower Local Property Taxes” that criticizes the idea that a higher sales tax was the key to lowering property taxes. He argued that a sales tax levied to replace property tax revenue would have a disproportionate negative impact on the poor, and hurt the Texas economy.

Lavine wrote “lawmakers should guarantee that everyone is paying their fair share of supporting our public services by ensuring that all property — especially commercial and industrial property — is on the tax rolls for its full market value. We must also eliminate wasteful or outdated tax exemptions and special giveaways.”

Lavine previously spoke with the Texas Business Daily regarding the benefits of ending 313 tax abatements intended to incentivize corporations moving to Texas.

Lavine focuses on building state and local revenue systems that meet Texans’ needs. Before coming to Every Texan in 1994, he was a senior researcher at the House Research Organization of the Texas House of Representatives for 10 years.

He is a chartered financial analyst and served for many years as a member and chairman of the Board of Directors of the Travis Central Appraisal District. He is also a member of the executive board of AFSCME Texas Retirees, the statewide union local of retired public employees. The Equity Center named him the 2011 Champion for Equity for his work to reform our tax system to ensure it can adequately support public education and other public services.

Lavine earned a bachelor of arts in economics, magna cum laude, from Harvard College in 1969, and a doctor of jurisprudence, cum laude, from the University of Pennsylvania in 1975.