West Houston News

Property taxes have long raised controversy in Texas, and Lt. Governor Dan Patrick is considering approaches to lower property taxes in the Senate, but according to a recent report by Texas Taxpayers and Research Association, it could have been worse.

The Texan reports that appraised property values are expected to increase across the state of Texas by 20% to 50% this year. Lt. Gov. Patrick is taking aim at property tax reform in the Texas State Senate and introduced an item that will explore the elimination of the school district maintenance and operations (M&O) rate, which is responsible for the largest portion of Texan property taxes.

Appraisal notices will be in the mail soon, so property owners may be in for a bit of a shock, just as home buyers have been encountering.

School districts account for over half of the local property taxes collected every year, and the amount has been increasing year over year since at least 2017, according to data from the Texas Comptroller, as tweeted by Brad Johnson of the Texas News.

Property taxes are made up of the M&O rate and the Interest and Sinking Tax Rate, and according to The Texan, the former funds more daily and yearly expenditures while the latter is typically used for more capitally intensive projects.

Multiple parties have different ideas of what should be done to mitigate property taxes. According to The Texan, Gov. Greg Abbott is seeking a compressed rate, but does not go so far as to scrap the M&O rate entirely. Rep. Dustin Burrows (R-Lubbock) takes the stand that property tax reform must occur through education code reform, and the Texas Public Policy Foundation is of the view that portions of the state budget surplus can be used to replace M&O funding.

A report published by the Texas Taxpayers and Research Association in April 2022 said that "Texas property owners need to be prepared for the sticker shock that home shoppers have been experiencing the past year," but the group also found that 2019 reforms reduced property taxes by a collective $6 billion across the state. The same report determined that school M&O levies accounted for $30.1 billion in 2021.

Katy Independent School District's (ISD's) property tax grew 15% from $538.4 million to $621.0 million from 2016 to 2020, according to a report published by the Texas Public Policy Foundation. The combined population and inflation for the city rose by 22.2% during that time, resulting in a decline of -6.8% compared to the ideal rate of growth.

Property tax in most ISDs outstripped the preferred rate of growth from 2016-2020, but Katy ISD and Conroe ISD were the only two school districts in Texas that kept their property tax growth rate below the preferred level.