Texas homeowners worried about their tax bills as their property values skyrocket could get some relief if voters approve two state constitutional amendments on May 7.
For some homeowners, including many in Austin, however, modest savings will likely be negated or dwarfed by tax bills expected to climb due to soaring property values. Still, the measures would provide at least some relief without hurting state public education budgets, which is why we recommend voters approve Propositions 1 and 2. Early voting started Monday and ends on May 3.
Property taxes in Texas — the sixth-highest in the nation, according to the Tax Foundation — pay for schools, roads, police, fire protection and many other services. Texas has no state property tax or income tax.
While we support the propositions, neither would fix our state’s problematic approach to paying for public education, which relies heavily on taxes levied on residential home values, creating an unfair burden on homeowners. To truly alleviate the tax burden on homeowners, state lawmakers should study other potential sources of revenue, including closing corporate tax loopholes, raising taxes on alcoholic beverages and applying the sales tax to some services that are currently exempt, such as legal services, marketing research and architectural services.
A confusing jumble of 77 words on the ballot, Proposition 1 would reduce the amount of taxes elderly and disabled homeowners pay to support public education. It aims to fix an inequity created in 2019 when the legislature approved a property tax reduction that did not apply to homeowners who are disabled or over 65 because their rates were frozen. Proposition 1 would freeze their school taxes at the rate approved in 2019. Their property taxes would drop $110 next year on a home valued at $300,000, state Sen. Paul Bettencourt, R-Houston, told our board.
State lawmakers have said they will cover the lost revenue — an estimated $744 million from 2024 to 2026 — that Proposition 1 would cost school districts. With a nearly $25 billion budget surplus on the horizon, the state can afford it.
Proposition 2 would boost the homestead exemption for school district property taxes from $25,000 to $40,000 for all homeowners. If approved, it would cost the state about $600 million a year to cover lost school district revenue. State lawmakers say it would reduce the typical Texan’s tax burden by $176 a year. Texas voters last increased the homestead exemption – from $15,000 to $25,000 — in 2015.
The allure of property tax relief is especially potent this year in Travis, Williamson, Hays and other Central Texas counties, where some homeowners have seen their valuations —the amount for which the county thinks a home would sell—increase by staggering amounts. The median Austin home value rose to $632,208, a nearly 54 percent leap from from last year’s value of $411,658. The median value has risen 78% since 2020.
Texans who rent their homes or apartments would not directly benefit from Propositions 1 and 2.
We recommend that Texas voters approve Propositions 1 and 2. Though savings for homeowners will be modest, some relief from dramatically rising property taxes is better than none.
Austin American-Statesman
