Dallas City Wire

There have been renewed calls across the state for property tax reform, as property taxes in Texas could increase up to 50% this year. But, a recent report by the Texas Taxpayers and Research Association (TTARA) said that it could have been worse.

Appraised property values are expected to increase across the state of Texas by 20% to 50% this year, according to The Texan. 

Lt. Gov. Dan Patrick (R) is taking aim at property taxes in the Texas Senate. He 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 Texas property taxes.

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, Brad Johnson of The Texan said on Twitter, citing data from the comptroller's office.

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

A report published by the TTARA earlier this month noted that "Texas property owners need to be prepared for the sticker shock that home shoppers have been experiencing the past year." The report found that 2019 reforms reduced property taxes by a collective $6 billion across the state.

Multiple parties have different ideas of what should be done to mitigate property taxes. Gov. Greg Abbott (R-Texas) is seeking a compressed rate, but does not go so far as to scrap the M&O rate entirely, The Texan reported. 

Rep. Dustin Burrows (R-Lubbock) believes that property tax reform must take place through education code reform, and the Texas Public Policy Foundation (TPPF) believes that portions of the state budget surplus can be used to replace M&O funding.

Property tax in most Independent School Districts (ISDs) outstripped the preferred rate of growth from 2016 to 2020. Dallas ISD's property tax grew 40%, from $1.3 billion to $1.8 billion, between 2016 and 2020, according to a report published by the TPPF. The combined population and inflation for the city grew by 4.8% during that time, resulting in growth of 35.1% faster than the preferred rate of growth.

Katy ISD and Conroe ISD were the only two school districts in Texas that kept their property tax growth rate below the preferred rate of growth, the TPPF noted.