Texas homeowners who cast ballots in the November 3 election will have an opportunity to reduce their school property tax bills. Texas Public Radio’s Shelley Kofler says Proposition 1 may have broad appeal, but it comes with a trade-off.
Audio transcript
Shelley Kofler: In this year’s legislative session, Lt. Gov. Dan Patrick and many Republicans promised and adopted tax cuts.
Lt. Gov. Dan Patrick: The people want us to pass a conservative budget that includes significant funding for property tax and business tax cuts and we will accomplish that.
Kofler: One result was Proposition 1. It’s a constitutional amendment that would raise the homestead exemption for school property taxes from $15,000 to $25,000. Lawmakers say that will reduce the average amount of taxes paid to school districts by $125.
It sounds like a deal almost no one would object to. But there is a flip side.
If Proposition 1 passes, school districts would lose $1.2 billion in property tax revenue over the next two years. To keep schools funded at the same level, the legislature would replace the loss with money that might otherwise be used for other state services. Eva DeLuna Castro works with the Center for Public Policy Priorities. Her group has argued that full funding of schools should have come first.
Eva DeLuna Castro: What we were arguing is that $1.2 billion that it’s going to cost the state to replace local property taxes could have been given to schools in addition to what they were already going to spend not instead of.
Kofler: In addition to the money gap Proposition 1 would create, the state budget will lose billions more because of a cut in the business franchise tax. And another $5 billion if voters approve another proposition that commits state money for transportation.
Castro: So this next legislature that returns to write the 2018-2019 budget is going to have at least $10 billion less to write the budget than would have been the case otherwise. And that doesn’t really spell good news for a state that’s growing as fast as Texas.
Kofler: In the meantime, many homeowners looking for relief with Proposition 1 would still end up paying higher school taxes. In (San Antonio's) NorthsideISD, for example, the average school tax bill would still be $104 higher because the value of residential properties has skyrocketed.
