Abbott proposes ending school property taxes

AUSTIN – Governor Greg Abbott officially launched his bid for a fourth term on Friday, December 3, 2021, unveiling a cornerstone policy proposal: a constitutional amendment to completely eliminate school property taxes across Texas. The sweeping proposal aims to fundamentally reshape how public education is funded, shifting the burden from local property owners to a state sales tax model.

Abbott emphasized the move is designed to deliver substantial financial relief, particularly for seniors on fixed incomes and other property owners who have grappled with soaring property valuations and corresponding tax bills. If approved, the amendment would eliminate a tax source that currently accounts for roughly half of a typical Texas homeowner’s total property tax burden, estimated at around $4,000 annually for the average residence.

For the plan to advance, it would require a supermajority – a two-thirds vote – from both the Texas House and Senate. Should it clear the legislative hurdle, Texas voters would then have the final say on the constitutional amendment during the November 2023 statewide election.

While specific details regarding the proposed sales tax model, including potential rate adjustments or expansions to the sales tax base, were not immediately released, the governor framed the initiative not as an imposition of “new taxes” but rather a strategic redistribution of existing tax burdens. Proponents argue this shift could stabilize funding for schools and provide more equitable relief across the state.

Texas has a history of addressing property tax relief. In 2019, the Legislature passed House Bill 3, a measure that cut school district property tax rates by 8 cents per $100 valuation and implemented caps on revenue growth for cities and counties. That legislative effort came with a significant price tag for the state, costing approximately $5.1 billion to offset the lost local revenue.

However, the complete elimination of school property taxes represents a far more ambitious undertaking, with substantial financial and logistical implications. Critics of shifting to a higher sales tax model often point to its regressive nature, arguing it could disproportionately affect lower-income Texans who spend a larger percentage of their income on taxable goods and services, while potentially benefiting wealthier individuals who save or invest more. Education advocacy groups are expected to closely scrutinize how such a shift would guarantee stable, adequate, and equitable funding for all 1,200+ school districts across the diverse state.

The announcement sets a clear tone for Abbott’s re-election campaign as he prepares for a primary challenge from former State Senator Don Huffines. Looking ahead to the general election, Governor Abbott is widely anticipated to face off against Democrat Beto O’Rourke. Beyond the property tax overhaul, Abbott’s re-election platform is also expected to highlight other key education issues, including expanding school choice options and enacting a “parental bill of rights.”

*Further details on the proposed sales tax structure and its economic analysis are expected to emerge as the legislative session approaches.*