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Property Tax

2018 Legislative Priority:

Property Tax

Understand the Issue

Abolish the Maintenance and Operation School property tax and replace it with a consumption tax or other mechanism other than income tax while broadening the tax base, eliminating the appraisal board and taxing the property at the purchased value or the free market value upon change of hands for local government funding and special district funding. School Maintenance and Operation funds shall be allocated from the state’s general fund to Texas’ Independent School Districts via an inflation-adjusted, per-student-allocation. ”

— Republican Party of Texas legislative priority

The Problem

  • Texans pay the 4th highest property tax rates in the nation, with school Maintenance and Operations (M&O taxes) being around 50 percent of the average Texan’s total property tax bill.
  • Most school districts levy M&O tax rates ranging from $1.04 to $1.17 per $100 of valuation. The rates are rarely lowered as property values skyrocket, leading to higher school taxes.
  • Inequities in funding have led to school finance lawsuits and the implementation of the Robin Hood tax in which “property wealthy” school districts have portions of their M&O revenues “recaptured” and redistributed to “property poor” districts.
  • Robin Hood encourages wealth redistribution, unfairly punishes taxpayers, and perversely incentivizes “donor districts” to take on additional debt.
  • As property values rise, and tax rates stay the same or increase, the K-12 education-funding burden shifts away from the state and onto local property taxpayers, with increasing state revenue going to less important spending priorities.
  • The property tax is widely recognized as being very inefficient and costly to administer, and is more prone to distortion if not outright favoritism.
  • Appraisal review boards are fraught with problems.
  • High and increasing property tax burdens DECREASE the value of the property itself compared to states with low or no property taxes. Elimination of the M&O or all property taxes would create an unprecendented economic boom in Texas as property values would increase and there would no longer be the high property tax that discourages businesses from moving to Texas!

The Solution

  • Phasing out the school M&O property tax will eliminate the Robin Hood scheme and cut the average Texan’s property tax bill in half.
  • M&O school taxes can be replaced with existing surplus state revenue generated by capping state-spending growth. The phase out of the M&O can be sped up using revenue generated by an adjustment to the statewide consumption tax.
  • A recent study from the Texas Public Policy Foundation concluded the M&O property tax could be eliminated in 11 years using expected surplus state revenue alone to replace the school district funding.
  • Abolishing the school property tax will lead to a permanent 50% reduction in property taxes paid by Texas families and businesses, while simplifying school finance.

What People Are Saying

“High property taxes are not only forcing homeowners out of their homes; tenants in rental homes are feeling the crunch as well. Those are the Texans nobody is talking about. When will we have tax relief for all Texans? It’s time our legislators heard the roar of the people and quit paying lip service to tax reform. Let’s see some real action.”

–Julie McCarty, President, North East Tarrant Tea Party

“Texas’ property tax system is one of the worst in the nation. No issue unifies Texans like our frustration with the burdensome, confiscatory property tax system that taxes people out of their homes, pushes home ownership out of the reach of millennials, and strangles small business start-ups and expansion. Every election cycle we hear plenty of promises about property tax relief. It’s time to turn the subject used for political fundraising into a permanent reality for Texans. Get it passed.”

–JoAnn Fleming, Executive Director, Grassroots America: We The People

“Property tax relief continues to be an important issue, yet the Texas Legislature has addressed it with only minor changes to the tax law. While we have all enjoyed the pocket change we’ve received from these changes, it’s time for Texas to overhaul the current system, which currently burdens Texans with one of the highest property tax rates in the nation. Abolishment of the school property tax should be the goal that we achieve, rather than the rearranging of deck chairs. We need a common sense replacement that enables every Texan to contribute to the success of our state in a way that doesn’t tax them out of their homes or redistribute their wealth.”

–Teresa Beckmeyer, Executive Director, Lone Star Voice

 

Talk to Your Community

Are you all in? Share these sample social media posts to start the conversation with your friends. Use the talking points to drive your message home when talking with friends or reporters. Send the sample Letter to the Editor to your local newspaper to spread the word.

Sample Tweets:

  • It’s time for real property tax reform and lasting relief. #AbolishRobinHood and the school tax.
  • Texans pay the 4th highest property tax rates in the nation. #AbolishRobinHood and replace the school tax with existing surplus revenue or a consumption tax.
  • Property taxes are pushing Texans out of their homes. Lawmakers must act to phase out the school tax and #AbolishRobinHood.
  • Let’s cut property taxes in half over the next ten years. #AbolishRobinHood and the school tax.

Messaging:

  • The school property tax led to the Robin Hood tax, which is an unfair and convoluted system that punishes success and encourages fiscal malfeasance.
  • Abolishing the school property tax – along with Robin Hood – will cut property tax bills in half.
  • Texans should demand the state arrange for consistent and adequate public school funding across the state, while providing permanent property tax relief.

Letter to the Editor:

Here’s a sample letter to the editor that you can customize, personalize, and submit to your local newspaper. An ideal time is when this subject comes up in the news. Be sure to check and follow your paper’s guidelines for length and submission.

Texans Deserve Permanent Property Tax Relief

Texas homeowners pay the 4th highest property tax rates in the nation. Across the state, an ever-increasing number of Texans are being taxed out of their homes. It’s time for state lawmakers to provide permanent property tax relief.

As property values rise over time, local taxing entities rarely reduce their tax rates enough to compensate. This forces Texas families and businesses to pay higher tax bill each year, which has a compounding effect over time. Texas’ school districts, for example, levy tax rates for annual budget operations ranging from $1.04 to $1.17 per $100 of property valuation.  As property values rise, and tax rates remain flat (or increase), Texans are forced to pay dramatically higher school tax bills.

One of the ways to alleviate this burden is for the Texas Legislature to phase out the current school maintenance and operations (M&O) property tax, which would also repeal the unpopular “Robin Hood” Tax. Once fully abolished, the typical Texan would see a 40 percent reduction in their total property tax bill.  

School districts should be made whole by the state – not by creating a statewide income tax on businesses or individuals – but rather through increased state budget appropriations paid out of of existing state revenue streams.

In 2018, this critical reform was designated a top legislative priority of the Republican Party of Texas, and for good reason. The Robin Hood Tax is a deceptive, convoluted, and immoral system that wrongly forces certain Texans to pay higher school taxes than what is necessary to fund their local schools.

Robin Hood also creates a perverse incentive for public schools to issue excessive bond debt to increase their spending and taxes, and has failed to deter the never-ending school finance lawsuits levied by school districts.

In order to provide lasting tax relief to all Texas families and businesses, the school maintenance and operations (M&O) property tax must be permanently phased out and abolished.

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Talk to Your Legislators

Make a Phone Call

It’s easy — find your state representative and senator and their contact info using the resource list on this page. Call their district office and/or their Capitol office. You’ll speak to an office staffer. Tell them you’re a constituent. Tell them what issue interests you and why. Ask what your legislator plans to do to promote the issue.

Visit the Capitol — or your local district office!

When you call, ask for an appointment with your legislator (or alternatively, their chief of staff or legislative director). Or just drop by their district or Capitol office during regular business hours — leave your card or a note with the staffer.

Testify in a Hearing

The year and a half in between legislative sessions is called the “interim” period. During this period, the House and Senate committees hold hearings to study specific issues, or “charges” that are assigned by the Speaker and Lt. Governor.

This year’s interim charges include important items such as health care reform, reducing the tax burden, school choice, Second Amendment rights, and religious freedoms. Many of the charges relate to planks or priorities from the RPT platform.

Although bills cannot be passed since we’re not within an actual legislative session, these interim hearings are the Legislature’s way of reaching out to you for your opinion on important issues. By studying these issues now, our Senators and Representatives can be prepared to pass bills in 2019 that address the specifics you’ll bring to their attention.

Most of these hearings will include a time for public testimony — that’s your chance to make your voice heard.

Resources:

  • Texas Legislature Online — https://www.capitol.state.tx.us/ — your resource for committee hearings, bills from current & past legislative sessions, committee membership, and more
  • Texas Tribune Legislative Directory –– www.texastribune.org/directory/ — find phone numbers, office locations, contact info, & social media accounts for all the Texas legislators & other electeds
  • Interim Hearing Tracker — www.texasgop.org/85interim/ — see all the current interim charges that relate to RPT platform planks & committee hearing information
  • STAT — www.texasgop.org/stat/ — join the Strategic Texas Action Team to receive alerts when your help is needed to promote conservative policy

 

 

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