When Texas had a $32.7 billion budget surplus in 2023, Republicans made it clear that they would prioritize a property tax cut. The House and the Senate battled over the nature of the cuts for months before finally settling on a deal that voters approved in November. The average homeowner in the state was expected to see $2,500 in annual savings.
While there was much grumbling about how the cut affected mostly middle- and upper-class Texans (and Republicans refused to include relief for renters proposed by Democrats), there is little doubt that property tax reform was needed. Texas already has one of the highest property tax rates in the country because the state does not have an income tax. Combine that with the fact that property tax rates skyrocketed nationwide after COVID, and Texans were looking at some very hefty bills.
In Dallas, Juanita Velasquez, 67, was unable to sleep as she tried to figure out how to stay in her family home in the Ledbetter area of Dallas. Her taxes went from $1,850 in 2019 to over $3,400 in 2023, a crippling sum for a retiree that lives on $,1400 a month. She was eventually able to find relief, but it was only after taking a workshop on property value disputing and navigating the labyrinthine process of applying for relief for the elderly.
She’s not alone. In San Antonio, the sticker shock from the rising bills has property tax lenders licking their lips in anticipation. The controversial industry offers high interest loans for people looking to pay their property taxes to avoid foreclosure. Like the payday loan industry, it’s very easy for people to get trapped in an endless cycle of debt with such companies.
It’s not just individuals like Velasquez that are having trouble. Theoretically, all of this extra tax money is supposed to go into Texas schools, but there are two problems with that.
First, expanded funding for schools stalled in the Texas legislature thanks to Governor Greg Abbott’s total war approach to school vouchers. When rural Republicans in the Texas House declined to support letting Texans use public money to pay for Christian schools mostly located in the suburbs and cities, Abbott held any kind of additional funding for schools for ransom until they changed their minds. The matter was still unresolved when the chamber adjourned to start campaigning for the 2024 elections.
The second problem is recapture. Austin collects more property taxes than anywhere else in the state, but they don’t get to keep all of it. Through a process called recapture, any amount collected over a certain limit set by the state is redistributed to poorer districts. This is sometimes called Robin Hood.
While the recapture program is absolutely necessary to help even the divide between wealthy districts and poorer ones, the state often takes the extra amount to use for other purposes. This added up to half a billion dollars in the 2022-2023 budget. Considering that Abbott has been playing a shell game with state funds for years to fund his border actions, Operation Lone Star, it’s possible that the extra property taxes are going toward ineffective border security rather than their intended mark of schools.
