AUSTIN— Today, the Texas Committee on Ways & Means passed House Joint Resolution 3, which would cut school districts’ maintenance and operations (M&O) property taxes with every dollar generated from raising the state sales tax rate from 6.25 percent to 7.25 percent. This legislation would need to be passed by both chambers and then approved by local voters this November for it to take effect in January 2020. By raising the state sales tax rate by a penny, there could be a 15-cent cut in school districts’ M&O property taxes.
“The Foundation has long supported shifting from property taxes to sales taxes because of their simplicity, efficiency, and fairness,” said Texas Public Policy Foundation’s Executive Director Kevin Roberts. “We applaud Speaker Bonnen and the House for moving toward that goal. It is important to remember, as our research for many years has shown, that this is an initial step: this sales tax swap will only benefit Texans if paired with additional property tax reductions that are financed with spending restraint — which, keep in mind, still allows for 8 percent growth for the biennium according to Conservative Texas Budget guidelines. If spending is restrained, this effort can help protect Texans from higher taxes and going deeper in debt.”
“The freedom to own property instead of being subjugated to renting it forever could soon be at hand with this first step in a tax swap,” said Dr. Vance Ginn, director of the Center for Economic Prosperity. “For Texas to not follow the failed tax relief efforts of Kansas and Louisiana, this penny tax swap must be combined with spending less than both chambers’ proposed budgets, additional property tax relief, and passing local revenue limitations. This will allow Texas to take the next step to greater prosperity.”