In an official commemoration surrounded by Texas legislators, Governor Abbott ceremoniously signed and celebrated the second-largest property tax relief package in Texas history.
Taking place in New Caney, Texas, and livestreamed online, Governor Abbott on Wednesday ceremoniously signed the new property tax relief package that was passed during the second called special session in mid-July.
Despite the governor and other legislators in attendance claiming that the package consisted of $18 billion in new tax relief to make it the largest ever, the total amount of new relief equates to roughly $12.7 billion.
While most property owners will see at least some tax relief, this number unfortunately falls short of being the largest property tax cut in Texas history, with the first-place spot going to relief passed in 2008 (roughly $14.2 billion at that time, not accounting for inflation). This amount also falls short of being at least half of the projected budget surplus (~$33 billion), which would require $16.5 billion.
- Approximately $7 billion in school Maintenance & Operation (M&O) tax compression
- An increase in homestead exemptions from $40,000 to $100,000
- Roughly $600 million in increases to franchise tax exceptions
- A three-year pilot program of 20% property tax “circuit breakers” on non-homesteaded properties worth less than $5 million (essentially like an appraisal cap)
- The creation of three elected positions on appraisal review boards in counties with a population of 75,000 or more
Regrettably, without spending or revenue caps on local governments and schools, much of the relief that homeowners experienced from the $100,000 homestead exemption will slowly evaporate over the next several years as inflation, appraisals, and local government spending continue to rise.
The only realistic way Texans will see real, lasting tax relief will be through compressing property tax rates with state dollars and eventually eliminating property taxes altogether.
This is the way forward to securing private property rights in Texas.
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