Tax Relief the Texas Way
Texans need property tax relief now to deal with the skyrocketing cost of living.
When it comes to property tax relief, both the House and Senate have ideas that are worthy of support.
It is important to appreciate that some reforms, like appraisal caps, come with serious long-term consequences.
Why Appraisal Caps Don’t Work.
Appraisal caps modeled after California’s failed tax policies have led to many painful unintended consequences.
The Texas Association of Property Tax Professionals is dedicated to promote and support a property tax system in the State of Texas that will preserve, protect, and defend the rights of taxpayers.
A compromise would combine the homestead exemption with property tax rate compression to provide significant and immediate relief to all Texans without the unintended and negative consequences of appraisal caps.
For Homeowners
Increase the homestead exemption to $100,000, saving the average homeowner $1,316 per year.
For Seniors
Increase the homestead exemption for seniors and the disabled to $110,000, saving them $1,487 a year.
For Taxpayers
Provide relief to taxpayers by compressing property tax rates for all homeowners and businesses by 13%.
Oppose California-Style Appraisal Caps
APPRAISAL CAPS DO NOT GUARANTEE LOWER PROPERTY TAX BILLS because they still allow cities, counties, and school districts to increase property tax rates. Higher rates on capped appraised values can still lead to higher overall property taxes and significant growth in local government spending.
APPRAISAL CAPS SHIFT THE TAX BURDEN from high value properties to middle class homes, from commercial property to homeowners, and from expensive urban real estate to rural farms, homes, and businesses.
APPRAISAL CAPS ARE NOT FAIR, giving a much bigger tax break to wealthy homeowners and shifting the burden of funding schools and government services to working families.
APPRAISAL CAPS will leave Texas taxpayers disappointed in the Legislature for over-promising and under-delivering on property tax reform.
See What Texas and National Tax Experts are Saying
“Even though I may benefit somewhat from the appraisal cap, I may end up a net loser because I’m going to be paying on a much higher tax rate than what I would have seen otherwise”
Dale Craymer, head of Texas Taxpayers and Research Association and former budget official for former Govs. Ann Richards and George W. Bush
“These California-style property tax caps have proven to be a failed experiment. There’s no reason for Texas to emulate them.”
Carl Davis, research director of the Institute on Taxation and Economic Policy
“The tighter appraisal cap would also mostly benefit wealthier and gentrifying neighborhoods.”
Texas Comptroller’s Office
“I think you’ll see more people upset about appraisals when they have a similar property to their neighbors but are being taxed in a wildly different way”
Carl Davis, research director of the Institute on Taxation and Economic Policy
“Lower-income neighborhoods … would not get any help to lessen their tax burden.”
Texas Comptroller’s Office
“What’s more, experts say any savings from the appraisal cap would be easy to undo by cities, counties and school districts. Local governments set their tax rates based on the value of properties in their jurisdictions and how much revenue they need — and they could simply raise rates to offset revenue lost to the cap.”
Texas Tribune
“It makes sense for people to fret when they see their property appraisals rise and anticipate a high property tax bill. But that doesn’t mean capping them is the best way to bring about tax relief. People in leadership positions are trying to show that they care and that they’re doing something about [rising appraisals], even if the thing that they’re doing is proven to not quite work like they think it will work.”
Janelle Fritts, policy analyst, Tax Foundation Center for State Tax Policy
“A tighter appraisal cap could also upend the state’s housing market, experts say, by encouraging people to stay in their homes for a longer time in order to hold onto their tax benefit. That could lead to less turnover in the housing market and, as a result, higher home prices stemming from a tighter supply of homes. In that scenario, it’s younger generations and those with lower incomes who would lose out”
Carl Davis, research director of the Institute of Taxation and Economic Policy
Keep California’s
Failed Tax Policy
Out of Texas
Appraisal caps modeled after California’s failed tax policies have led to many painful unintended consequences, including:
Highest Taxes
In the Nation
California has among the highest state income, sales, gas, and property taxes in the country.
Largest Divide
Between Rich and Poor
California has the largest divide between rich and poor in the nation with older, higher income property owners getting the biggest tax breaks while lower income and younger people pay significantly more in taxes than they would without appraisal caps.
Massive
Housing Shortage
California has a massive housing shortage, higher housing costs, increased homelessness, and the nation’s highest cost of living.
Inequities
Between Neighbors
California has massive inequities between neighbors who own similarly valued homes paying dramatically different property taxes to maintain the same schools, police, fire, streets, sewers,
and parks.
Locked
Into Their Homes
Californians are locked into their homes and discouraged from reinvesting because of the tax consequences of improving their property or moving to a new home.
Drop
in School Performance
California dropped in school performance from among the best in the nation to near bottom today as local school budgets were cut and state control expanded.