How We Cut Property Taxes in Texas

I strongly support Governor Abbott’s five-point plan for property tax reform because it will bring a structural transformation that restores true ownership to Texas homeowners and permanently cuts taxes.

The five pillars include common-sense local spending limits, a supermajority vote for a tax increase, additional voter roll-back power, lower appraisal caps, and eliminating School M&O Taxes.

The first pillar imposes common-sense spending limits on local governments, curbing the unchecked growth that eroded previous state-funded tax relief efforts. Despite historic investments in tax relief, such as the $51 billion allocated in recent budgets and the voter-approved expansions of homestead exemptions, local entities generated more revenue and spending with appraisal increases, while still claiming tax cuts during campaign season. 

The second and third pillars elevate voter sovereignty to unprecedented heights, requiring a two-thirds supermajority for any tax increase and granting citizens mechanisms to proactively roll back taxes. This puts voters back in control and echoes the Founding Fathers’ emphasis on checks against majority tyranny while protecting minority rights, in this case, the rights of taxpayers.

Appraisal predictability forms the fourth pillar, capping growth in property valuations. Appraisal increases punish long-term residents and result in a tax on unrealized capital gains. Every homeowner has faced ever-increasing amounts of appraisal creep. In Tarrant County, taxpayers who appeal their appraisal have a 60% chance of winning. This rate of success is a structural failure in the system. By locking in appraisals for longer, we require local governments to be honest and transparent about their tax increases.

In Tarrant County, a typical taxpayer pays six individual property taxes, a County Tax, a Community College Tax, a Hospital District Tax, a City Property Tax, the Interest & Sinking Fund (I&S) School Tax, and the Maintenance & Operations (M&O) School Tax.  All of these taxes, except the M&O tax, are used to secure bond debt. In House District 98, the cities and school districts have a debt balance of $2.88 billion. The cumulative local debt across Texas must be staggering.

The fifth point is the complete elimination of school district maintenance and operations (M&O) property taxes on homesteads. School districts account for the lion’s share of these levies, and their elimination would shift education to a state-funding model without regressive burdens on property ownership.  This change provides the opportunity to eliminate the Robin Hood Calculation, which encourages the wrong sort of behaviors:

• Credits for bond interest payments — encouraging more debt than necessary.
• Attendance penalties for behavior-based attendance issues — creating a poor environment for teachers and distractions in the learning environment.
• Tax rate penalties for low tax rates, a penalty paid by any district with high appraisal values.
  

It might sound crazy to eliminate the M&O tax, but it is not. That state has enough money to make the switchover because Texas is run by conservative Republicans who do not spend money on every vanity project in sight.  We are the state that passed a constitutional amendment banning the income tax. We will ban the M&O Property Tax.

These changes are a “citizen-led effort,” urging Texans to engage through the legislative process and potential ballot measures.  Governor Abbott’s plan is bold conservatism in action: reducing government intrusion, empowering individuals, and securing the affordability of homeownership.  As Texans, we deserve leaders who view property taxes not as an inevitable entitlement for government but as a temporary trust from citizens. Governor Abbott’s plan delivers precisely that vision.

Fred Tate for HD 98