State bills call for local 2.5% revenue cap on property taxes

State Republican leaders announced a plan for property tax reform.

Identical bills filed in the Texas House and Senate would cap property tax increases at 2.5 percent without voter approval.

The legislative leaders making the announcement on the last day property owners have to pay current tax bills without paying a penalty. It would cap local property tax revenue growth at 2.5 percent per year for cities, counties and school districts.

While it would slow increases in what entities collect, it may not lower your property tax bill.

“We make it clear to the people of Texas that we hear them,” said Texas House Speaker Dennis Bonnen. “We have compassion for the challenges that they face in paying these overly burdensome taxes.”

“We need local property tax relief, but this plan won’t do it,” said Dallas County Judge Clay Jenkins.

“But it is complex to how they've laid it out so far,” said Dallas ISD Superintendent Dr. Michael Hinojosa.

Local county governments and school districts look to property tax revenue for financial needs. But most of the taxes go to schools because the state has cut money to public education over the last decade from almost 50 percent ten years ago to 38 percent this year.

“What we need to do is for the state to adequately fund our local public schools,” Jenkins said. “That’s why your taxes are so high. Because the state has cut their funding from the local schools, they need to get where they cover 60 percent of the cost of educating a child.”

Hinojosa is somewhat tempered.

“It’s early stages. We're analyzing the bill,” the superintendent said. “We know they’re gonna use some recapture money to buy down the property taxes and we applaud them for that. The details of how that’s gonna work is really important.”

Lieutenant Governor Dan Patrick said he wanted municipalities and school districts to work with the legislature, but the invitation came with a warning.

“The day of saying, ‘No. We're going to kill that bill because we don’t want change today’ sends a clear message. That day is over,” Patrick said.

Hinojosa hopes the state provides some relief for districts like Dallas ISD, which the state marks as “a wealthy district.” Under the state’s Robin Hood plan, Dallas ISD this year sent $68 million from its revenue to the state to help fund poorer school districts.

Public hearings on the legislation start next week.