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Both Political Parties Agree: Texans Need Property Tax Relief

This article was authored and contributed to Breitbart Texas by James Quintero.

Texas Republicans and Democrats found some common ground recently on a difficult issue plaguing every homeowner and business in the state: sky-high property taxes.

Speaking at the Texas Public Policy Foundation’s 13th annual Policy Orientation last month, Democratic Senator Kirk Watson and Republican Senator Paul Bettencourt showcased a handful of bills that would, each in their own way, provide Texans with some much-needed property tax relief. Music to the ears of most in the audience.

Two proposals that soaked up much of the spotlight in the course of the day’s event were Senate Bill 182 and Senate Bill 278. The former would require a tax rate election if a city, county, or school district’s property tax revenues grew in excess of 4 percent over the year before while the latter would increase the mandatory school homestead exemption from $15,000 to $25,000.

Though the policy solutions differ somewhat in their approach, it’s encouraging to see that there’s bipartisan recognition of the problem and a move towards a substantive solution. Of course, this may be because the problem has become so pronounced.

According to the Tax Foundation’s latest national rankings, Texas’ property tax system ranks as the 15th worst in the nation for taxpayers, collecting more than $1,550 per man, woman, and child. That per capita figure is up from $1,393 just a few years prior when the Tax Foundation ranked Texas’ tax system as the 17th worst.

Another report, Homeowners and the Texas Property Tax, moves beyond the per capita measure and examines the average yearly burden on homeowners. The study finds that from 2010 to 2012, the three-year average annual property tax burden on a Texas homeowner was $2,477. By comparison, the same three-year annual average for a homeowner in the U.S. Southern Region was a much smaller $1,411 while a typical U.S. homeowner paid just $2,091.
It’s not just that property taxes are bigger in Texas though, it’s also that these types of taxes are outstripping standard economic measures, like population and inflation, by a wide margin.

Consider that from fiscal years 2000 to 2011, property taxes levied across the state increased by almost 80 percent. Over the same period, population and inflation combined for an increase of just 53.2 percent, a significantly slower rate of growth. The difference in these two measures signals that property taxes, as a whole, are humming along at a much quicker pace than Texans can afford them without going broke.

Of course, the financial burden created by Texas’ property tax system is only part of the overall problem. Property taxes also disincentive property investment and impede job creation by penalizing land development and causing out-of-state businesses to think twice about relocating to Texas. Worse yet, property taxes prevent homeowners and businesses from ever truly owning their own property, whether it’s been paid off in full or not.

And so it’s against this backdrop of a broken system that state lawmakers from both sides of the political spectrum have come together in agreement of the problem and proposed much-needed reforms. Though the exact nature of the reforms won’t be known for quite some time, current and prospective homeowners and businesses can at least take heart that the conversation, irrespective of party labels, is headed in the right direction.

James Quintero is the Director of the Center for Local Governance at the Texas Public Policy Foundation, a non-profit, free-market research institute based in Austin. He may be reached at jquintero@texaspolicy.com.

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