After the Texas Legislature finally agreed on a plan to provide property tax relief to Texans last week, former State Senator and businessman Don Huffines joined Bill Peacock on the July 12 episode of The Liberty Cafe podcast to examine the deal. According to Huffines, the disastrous plan shows a missed opportunity and hurts efforts to entirely eliminate school property taxes.
"What they just came up with almost guarantees us and ensures us that we can never completely phase out the local property taxes and that should be our goal," Huffines said on The Liberty Cafe podcast.
"It’s very possible and achievable to phase out the local school tax from being paid by the local property owners," Huffines said. "The local tax we can do away with it, we can actually eliminate it. And that really should be the goal, there’s no question it should be the goal. It just baffles me why our legislators and our statewide leaders... just want to solve the symptoms of the problem and not the problem. It’s craziness, it’s illogical, why wouldn’t they want to just go ahead and solve the problem?"
On July 10, a significant development occurred in property tax legislation as Texas Lt. Governor Dan Patrick and House Speaker Dade Phelan reached a breakthrough agreement. While the recent efforts by the Texas Legislature to alleviate property tax burdens for Texans are worthy of praise, the Austin Journal Editorial Board highlights that it falls short of Gov. Abbott's ongoing goal of enacting the "largest property tax cut in Texas history." Instead, it stands as the second-largest tax cut in the state's history.
"What they came up with this week is a disaster. It’s the worst possible scenario that they could have come up with. If they had picked the House plan or just the Senate plan, it would have been better than this convoluted plan of picking so many different winners and losers," Huffines said.
Huffines claimed to be "shocked and extremely disappointed" in the Legislature's tax plan, adding that it was "an incredible missed opportunity." He further noted, "they have a plan right in front of them of how they can do it without raising taxes, keep schools fully funded, without creating any new taxes, and they obviously just don’t want to do it."
The tax relief package agreed upon by the House and Senate is worth $12.7 billion. A substantial portion of this amount ($6.7 billion) will be allocated towards buying down the property tax rate, as reported by The Huffines Liberty Foundation (HLF), and the remaining funds will primarily be directed towards raising the homestead exemption.
The Huffines Liberty Foundation has devised a comprehensive plan to maintain full funding for schools without resorting to any new tax increases. In their latest publication authored by Huffines and Peacock, they argue that the Texas Legislature's current approach will not effectively eliminate the school M&O (Maintenance & Operations) property tax. Instead, they propose the following steps: "1. Freeze school M&O property taxes for school districts and require voter approval for any revenue increases concerning cities, counties, and special districts. 2. Implement a limit on the growth of state spending to 4% per biennium, and utilize 90% of the resulting budget surplus to reduce property taxes. 3. Institutionalize these changes into the Texas Constitution, safeguarding Texans from unpredictable policymakers." By adopting these measures, HLF believes that schools can remain adequately funded while ensuring property taxes are managed more effectively.