Texas Governor Greg Abbott has introduced a new property tax reform plan that would limit the authority of local governments to raise taxes and spending. The six-point proposal, announced during Abbott’s reelection campaign kickoff in Houston, aims to address concerns over rising property values and the lack of an income tax in Texas.
Abbott said that while the Legislature allocated $51 billion for tax relief this year, the impact was lessened because local governments increased their own levies. To address this, his plan would restrict local government spending growth to either 3.5 percent or the combined rate of population growth plus inflation, whichever is lower. Additionally, debt and deficit limits currently applied at the state level would also extend to counties, cities, and school districts.
The proposal includes a requirement that any new local property tax increases must be approved by a two-thirds majority of voters. Residents would also have the ability to petition for a rollback of existing taxes if 15 percent of local voters sign on. According to Abbott, these measures are designed to “help check ‘runaway’ local government spending.”
To deal with issues related to property appraisals, Abbott’s plan proposes capping homestead valuation growth at 3 percent—down from the current 10 percent—and extending this cap to rental and commercial properties as well. Appraisals would take place only once every five years instead of annually.
One significant element in the plan is giving voters the option to eliminate school district property taxes entirely. School district levies make up a large portion of Texans’ property tax bills. However, Abbott did not provide details on how schools would be funded if those revenues were removed—a question likely to prompt debate among lawmakers.
Much of Abbott’s proposal would require changes to the state constitution and legislative approval before it could go into effect.
“Residents could also petition to roll back existing taxes if 15 percent of local voters sign on — a mechanism Abbott says would help check ‘runaway’ local government spending.”
