Gov. Abbott proposes plan for property tax reform

Governor Greg Abbott is pushing new property tax reforms that are tougher than the ones that failed in the last legislature.

The idea might sound attractive to homeowners with soaring tax, but one economist has a warning about the consequences.

Abbott says skyrocketing property taxes are pricing people out of their homes and is proposing a plan that would put the brakes on rising taxes. But skeptics say that would also affect money for roads and classrooms.

The governor says he's been getting an earful from voters.

“People and businesses across the state are being crushed by skyrocketing property taxes,” he said. “More and more Texans are being taxed out of the homes they've lived in for decades. Young families are finding it hard to buy even their first home."

The governor's plan would prevent cities, counties, and school districts from increasing yearly property tax revenue by more than 2.5 percent without approval from voters.

"My plan gives more power where it belongs: the voters,” he said.

But Abbott’s plan could spell trouble for school districts which have already faced cuts in state funding in recent years. The governor only had a vague answer about the potential impact.

Abbott said there are certain variables that would impact the growth of revenue for school districts.

“The reality is we need to find out how this would be utilized by the taxing authorities,” he said. “The best local control is voter local control. We're putting the power where it belongs with the voters of the state of Texas.”

The state Democratic party also criticized the governor's plan. They said, "Abbott's proposal makes it harder for cities to fill potholes, counties to build roads, and schools to meet the growing needs of our children's education."

SMU economist Bernard Weinstein says the plan does put unnecessary restrictions on local government that could hurt government services.

“The reality is we in Texas are not overtaxed. We have a system that is unbalanced,” Weinstein said. “We have very low state taxes. We don't have a personal income tax. That means if you want good schools, good municipal services, you have to have comparatively higher property taxes than you might find in other states. But overall, taxpayers in Texas have a pretty good deal.”

Another part of Abbott's plan would make it harder for local government to create new debt. It would require a two-thirds majority of voters to pass bond packages. Under that standard, the recent bond propositions for Dallas Fair Park, city hall improvements, and economic development would not have passed.