AUSTIN – Today, the Texas Public Policy Foundation released the paper “Abolishing the ‘Robin Hood’ School Property Tax,” which details a plan for eliminating the maintenance and operations (M&O) portion of Texas’ “Robin Hood” school property tax.
“The Texas property tax system is terribly broken and harming our economy, employers and families,” said Kara Belew, TPPF’s senior education policy advisor. “Our plan holds down state and local spending, and eventually, will eliminate a significant portion of the property tax.”
The plan eliminates the M&O property tax by limiting the growth of state spending to 4 percent per biennium and using state general revenue-related surplus funds to buy down the tax. Using the historic revenue growth rate of roughly 10 percent, TPPF projects the M&O property tax could be eliminated in as little as 11 years.
“The property tax replacement scenario is unprecedented,” said Bill Peacock, TPPF’s vice president for research. “By simply restraining spending growth and pledging the resulting surpluses to the elimination of the property tax, our plan provides both tax relief and a reduction in the size and scope of government. If the Texas Legislature sticks with this plan, within the foreseeable future Texans will no longer be paying the Robin Hood property tax.”
School district maintenance and operations (M&O) property taxes, estimated to be $24.77 billion in 2018, make up about one-half of the total tax levy. Previous efforts by the Texas Legislature to reduce the property tax burden through increasing state spending on public education or increasing the homestead exemption have not provided significant, long-term relief for Texas taxpayers. Reducing spending growth provides a long sought-after solution to Texans' high property tax burden.
“School property taxes for maintenance and operations make up the largest part of most Texan's property tax bill,” said Emily Sass, a policy analyst with TPPF’s Center for Innovation in Education. “Eliminating that tax using fiscal restraint would provide significant relief to Texas families and businesses.”
To read the full report, visit:
For more information or to request an interview, please contact Alicia Pierce at [email protected] or 512-472-2700.
Kara Belew is senior education policy advisor at the Texas Public Policy Foundation. Prior to TPPF, Kara worked as deputy commissioner of finance at the Texas Education Agency, managing the state’s $60 billion per year school finance system.
Bill Peacock is the vice president of research at the Texas Public Policy Foundation.
Emily Sass is a policy analyst with the Texas Public Policy Foundation’s Center for Education Innovation.
The Texas Public Policy Foundation is a non-profit free-market research institute based in Austin that aims to foster human flourishing by protecting and promoting liberty, opportunity, and personal responsibility.