May Property Tax Propositions: A Slap In Texans’ Faces

April 6, 2022
TFR Staff
Budget Surplus, Property Tax, Property Tax Exemption

Taxpayers all over the state of Texas report being crushed under the weight of sky-high property taxes, rising appraisals, and nearly double-digit inflation. You would not know this however if you only listened to lawmakers in Austin who drone on about the ‘historic property tax relief’ they passed that does not really provide significant relief to anyone.

The latest victory being trumpeted from Austin are the two property tax propositions they passed as a result of first watering down actual property tax relief in 3rd called special session last Fall. These propositions will be on the May 7th ballot. The language of the two propositions is as follows:

Proposition 1

The constitutional amendment authorizing the legislature to provide for the reduction of the amount of a limitation on the total amount of ad valorem taxes that may be imposed for general elementary and secondary public school purposes on the residence homestead of a person who is elderly or disabled to reflect any statutory reduction from the preceding tax year in the maximum compressed rate of the maintenance and operations taxes imposed for those purposes of the homestead.

Proposition 2

The constitutional amendment increasing the amount of the residence homestead exemption from ad valorem taxation for public school purposes from $25,000 to $40,0000.


So, in summary, we have yet another carve-out that will inevitably raise taxes on the rest of Texans who do not qualify for it, and a whopping 15k increase in the homestead exemption.

State Sen. Paul Bettencourt (R-Houston), the author of the legislation, had this to say on Twitter:

This “historic property tax relief” results in roughly $100 in savings this year for only those aged over 65 or disabled veterans, and a similar amount ($100-$200) for the average Texan’s home with the increase in homestead exemptions. Ultimately, its a paltry gift when you consider rising real estate prices causing higher property taxes altogether and near-historic inflation causing the rise in costs to things like homeowners insurance. It does not even begin to make a dent in the overall tax burden most Texans are experiencing this year.

What is worse is that Texans could have had much more significant property tax relief and have been put on a path to the complete elimination of school property taxes had the legislature passed State Rep. Tom Oliverson’s (R-Cypress) landmark property tax legislation from the 2nd or 3rd special legislative session. Oliverson’s bill would have used the $8 billion surplus to ‘pay down’ on school Maintenance & Operation (M&O) compression rates resulting in much more significant savings for homeowners. TFR was very vocal about our support of this legislation, which stipulated buydowns must continue until compression rates were at 0.  This would have tied the hands of lawmakers in Austin and forced Texas on a path toward property tax elimination.

This was possible mainly due to the passage of other legislation authored by State Sen. Kelly Hancock (R- N. Richland Hills), which capped the growth of our state budget to that of the growth of population and inflation (a metric that many fiscal organizations have used to determine whether the budget was ‘conservative’). The budget outlook has improved even more since then, as reports have indicated that the surplus will be closer to $12.5 billion when reviewed in the Fall by the Texas Comptroller.

When this surplus is added to the “Rainy Day Fund” (A savings fund mainly used as a slush fund) this will likely result in close to a $25 billion dollar surplus. The Chairman of the Republican Party of Texas, Matt Rinaldi, made this a point on Twitter:

Within one year after passing the spending cap legislation, Texas is already in a position to completely eliminate property taxes within years, not decades, assuming the legislature decides to give this money back to its rightful owners, you the taxpayer. This can easily be done in the form of property tax relief by paying down compression rates, passing legislation similar to Oliverson’s from the 3rd special session. This could prove to be difficult, however, as the Austin lobby and establishment have already begun salivating over how they will waste this surplus elsewhere.

It is possible the money will be appropriated on wasteful programs unless taxpayers demand that their lawmakers pass legislation similar to House Bill 90. Surpluses will likely continue into perpetuity and if lawmakers will commit to actually cutting wasteful programs like the Texas Enterprise Fund (and other forms of corporate welfare), taxpayers could actually realize real property tax relief for the first time in Texas history.

It is expected that both of these propositions will pass handily on May 7th, but do not be duped by the self-promoting lawmakers that have chosen to toss us trinkets as opposed to real property tax relief.