Texas Gov. Greg Abbott recently expressed his strong indication for the complete elimination of property taxes in the state, as the Texas Public Policy Foundation's (TPPF) plan strives to do. Following the governor’s public statements, a policy director for TPPF applauded the actions being taken on relief, but also called for reform.
“It’s exciting to see policymakers make strides toward achieving massive tax relief, but they must not overlook the need for structural tax reform too. Because without strict fiscal rules and strong taxpayer protections in place, the tax relief provided this session will be quickly eroded in the future by left-leaning local governments. The two concepts are of equal importance,” James Quintero, policy director for the Government for the People Initiative at TPPF, told the Austin Journal.
On June 2, Abbott joined TPPF at a fireside chat to recap the major achievements in the 88th regular session and to discuss priorities for all that’s to come in special session No. 1, according to a press release from the Office of the Governor. At the event, the governor applauded TPPF’s plan for property tax relief and vowed to completely eliminate property taxes in the state of Texas.
“Texans want to own their property, not rent it from the government," Abbott said on Twitter. "My property tax plan puts Texans on the pathway to ELIMINATING property taxes. That starts with passing my plan to provide the largest property tax cut in Texas history.
Last week, the governor publicly indicated his plan to use TPPF's plan. In response to Quintero’s claim that “the ideal property tax rate is $0.00 per $100 of value,” Abbott said, “That's my plan. Use the TPPF roadmap to end property taxes,” in a Twitter post May 31.
TPPF’s proposed plan aims to eliminate the school maintenance and operations (M&O) property tax gradually, which currently constitutes a significant portion of the local property tax burden. Compression is their main priority and the plan suggests utilizing surplus funds from general revenue-related sources at the state level to gradually reduce the school M&O property tax. This approach ensures that top priorities like public education continue to receive adequate funding. Most importantly, the TPPF said its proposal does not involve lowering one tax only to increase another. Instead, the state would increase its contribution to public education funding, while taxpayers would be protected from excessive spending.
During the regular session, the House’s plan for property tax relief prioritized compression and appraisal caps, while the Senate’s plan prioritized compression and homestead exemptions, as Rep. Dustin Burrows, who represents Texas House District 83, pointed out on Twitter. After the two Chambers failed to come to an agreement and the Senate rejected the House’s second proposal of an all-of-the-above approach (which included compression, exemptions and appraisal caps), the governor offered an alternative plan. His plan included neither appraisal caps nor a homestead exemption, but was instead for compression only, a mechanism both chambers relied heavily upon in their original plans. However, the Senate has rejected it and is demanding the House pass their original plan, as filed.
The governor’s plan has been passed in the House, but has yet to be referred in the Senate, Burrows said.