Texas has some of the highest property taxes in the nation.

In 2014, the Tax Foundation reported that Texas had the sixth highest effective property tax rate. In 2016, more than 5,100 local tax jurisdictions levied $56.1 billion in property taxes, or $2,000 on average for every Texan—man, woman, and child. And property taxes continue to increase. The overall property tax levy increased by 233% between 1996 and 2006, while personal income only increased by 199%. Texans risk losing their house—and sometimes do—because of an out-of-control growth of local governments. An excessive growth of government also discourages investment, job creation, and economic growth in general.

The Facts

• Texas has one of the highest property tax burdens in the na- tion. The Tax Foundation ranked the state’s effective property tax rate sixth highest in 2014.

• Texas school districts’ M&O property tax accounts for almost half of the overall property tax burden, representing nearly $25 billion in 2018.

• Only local governments in Texas can levy a property tax. The Texas Constitution prohibits the state from levying the tax.

• Past attempts by the Legislature to provide relief to property taxpayers by increasing the homestead exemption or by increasing other taxes have failed.

• The overall property tax levy increased by 233% between 1996 and 2006. Personal income increased by only 199%.

Recommendations

• Restrain state spending growth by imposing a limit of 4% on GRR appropriations growth.

• Restrain local government spending growth by imposing a limit of 2.5% of property tax revenue growth.

• Use the surplus generated by the new state spending restraint to progressively replace and eliminate the M&O property tax, while school districts progressively decrease their M&O property tax rate by the replacement rate.