Texas House Passes Property Tax Reform, Shifts Focus to Schools


The Texas House passes a massive property tax overhaul that slows property tax growth for homeowners and businesses, while limiting how much money local governments can levy in taxes.

Lawmakers were quick to point out that SB 2 will not making anyone's tax bill smaller, but it does give taxpayers more control.

The Center for Public Policy Priorities responded with a statement saying, “If Senate Bill 2 ultimately becomes law, then state leaders will have unnecessarily tied the hands of local elected officials. This kind of law would make it harder for communities to respond to the unique needs of each town, city and county.”

The House and the Senate capped the city and counties at 3.5% annual growth. School district property taxes will be addressed in a separate bill.

Dr. Vance Ginn, director of the Center for Economic Prosperity and senior economist at the Texas Public Policy Foundation, says you can't have property tax reform without changes to school finance.

“Half the property tax burden in Texas is from school districts, so if you don't reform the school finance system, half the property tax burden isn't being influenced and reduced over time,” he says.

HB 3 would spend $6 billion in classrooms and $3 billion on property tax relief. That kicked off talk of raising the state sales tax by one percent to pay for it all.

“There's some discussion about whether or not some of those additional dollars can be used on spending for things like public education,” says Ginn. “All that money must go to property tax relief. Meaning, that if you're going to raise taxes in one area, you better lower them in another area.”

Texas Republican Party Chairman James Dickey issued a statement saying, “While there is still work that must be done to deliver the cuts Texans need, this is a tremendous step in the right direction. Yet again, our Republican Legislators have shown leadership on issues that will create brighter futures for all Texans.”


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