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Gov. Greg Abbott shows off his best beady-eyed squint at the 2024 Republican Convention. Credit: Shutterstock \/ Maxim Elramsisy<\/p>\nGov. Greg Abbott shows off his best beady-eyed squint at the 2024 Republican Convention. Credit: Shutterstock \/ Maxim Elramsisy<\/p>\n
As the Texas gubernatorial race heats up, Gov. Greg Abbott last week introduced a new plan that calls for eliminating school property taxes and putting severe restrictions on cities\u2019 ability to tax and provide basic services.<\/p>\n
\u201cTexans shouldn\u2019t be taxed out of their homes,\u201d the Republican governor said in a statement about his five-plank tax plan. \u201cWorking with Texas representatives and senators, we will overhaul the system to deliver lasting relief, creating a brighter, more prosperous future for all. It\u2019s time for greater predictability and lower tax burdens. Next session, we will ensure that local governments cannot raise property taxes without people\u2019s votes.\u201d<\/p>\n
Abbott\u2019s proposal may sound appealing to voters struggling with property taxes. However, experts warn it could bankrupt the state, further defund already struggling public school districts and force cities to rely on meager state funding and grants to provide basic services.<\/p>\n
\u201cIt\u2019s purely ideological and wishful thinking,\u201d said Jon Taylor, a political science professor at the University of Texas at San Antonio.<\/p>\n
Mathematically speaking, Texas\u2019 economy would have to sustain average to exceptional growth in perpetuity for Abbott\u2019s numbers to work without implementing a state income tax, Taylor said. Complicating matters, a state constitutional amendment passed in 2019 made it illegal for lawmakers to institute a state income tax.<\/p>\n
Southern Methodist University political scientist Cal Jillson told the Current the governor has a \u201czero-percent chance\u201d of getting all his proposals passed \u2014\u00a0even though his own party controls both houses of the Texas Legislature.<\/p>\n
Still, that doesn\u2019t downplay the danger of Abbott\u2019s plan, the professor said.<\/p>\n
\u201c[Abbott\u2019s proposal] is just starving all of your state services,\u201d Jillson said. \u201cThat\u2019s fine for people in the upper middle class and beyond, but it is very difficult for the working poor, working class and lower middle class, because they\u2019re barely making ends meet.\u201d<\/p>\n
Punishing city governments<\/strong><\/p>\n Under Abbott\u2019s plan, property tax appraisals would only occur every five years instead of annually, hurting cities\u2019 and counties\u2019 ability to raise revenue in a high-inflation environment. Additionally, the proposal would lower the annual homestead appraisal cap from 10% to 3% and expand that cap to all properties, including rental and commercial holdings.<\/p>\n At the same time, Abbott wants to cap local government spending growth to population plus inflation, or 3.5% \u2014\u00a0whichever is lowest.<\/p>\n \u201cGreg Abbott seems to have it out for local governments, particularly for blue areas of the state,\u201d UTSA\u2019s Taylor said.<\/p>\n The governor\u2019s proposed cap would make it nearly impossible for local governments to keep up with rapid population growth, essentially defunding essential services, the professor added. That\u2019s especially dangerous with inflation running at around 4.2%, according to the latest Federal Reserve figures.\u00a0<\/p>\n What\u2019s more, federal budget cuts outlined in President Trump\u2019s Big Beautiful Bill, which went into effect last July, have already left local municipalities nationwide scrambling to make up for lost revenue.<\/p>\n To that point, much of San Antonio\u2019s looming $156 million budget deficit stems from federal funding cuts and the end of COVID relief funds, which the city used to pay for expanded social services and other programs, City Manager Erik Walsh told City Council last month.<\/p>\n Due to that deficit, council is weighing whether to implement a 3.5% property tax increase \u2014 the maximum allowed without going to a citywide vote.<\/p>\n However, under Abbott\u2019s plan, two-thirds of a city\u2019s population would have to approve a property tax rate hike such as the one being proposed in San Antonio. At the same time, only 15% of registered voters would need to sign a petition to hold a referendum on a property tax rollback under Abbott\u2019s tax plan.<\/p>\n In other words, if the governor gets his way, it could be damn near impossible for a city to raise property taxes, even if facing dire financial straits.<\/p>\n Economic stagnation<\/strong><\/p>\n SMU\u2019s Jillson told the Current that Abbott\u2019s tax plan would also hinder cities\u2019 ability to grow, locking cities into a cycle of economic stagnation.<\/p>\n \u201cThe logic of local governments, particularly in fast-growing suburbs and exurbs, is you\u2019ve got to build out to get ahead of population growth,\u201d Jillson said. \u201cYou can\u2019t build out after people are there. You have to plan and anticipate population growth \u2026 . So, you would be limiting [municipalities\u2019] ability to anticipate and facilitate that growth.\u201d<\/p>\n Most concerning, though, according to both Taylor and Jillson, is Abbott\u2019s proposed constitutional referendum rule, which would let Texas voters decide whether to pass an amendment eliminating school district property taxes.<\/p>\n Abbott maintains state coffers would make up the difference in places where residents vote to do away with school district property taxes. But Jillson said economic realities show that\u2019s simply not the case.<\/p>\n \u201cIt only works as long as Texas has a surplus and a steady, rapidly growing economy,\u201d Jillson said. \u201cThe next downturn \u2014\u00a0and Texas always faces downturns \u2014\u00a0it\u2019s going to be a mess.\u201d<\/p>\n During Abbott\u2019s 12 years in office, Texas has never faced a deficit. Since he took office after the Great Recession of 2007 to 2009, he\u2019s never led the state during a recession or deep economic crisis. That\u2019s given the governor a false sense of economic security, according to Taylor.<\/p>\n \u201cIt\u2019s an ideologically rigid view of taxes, the idea that all taxes are bad, that all government spending is bad,\u201d Taylor said.<\/p>\n In the unlikely event the Texas Legislature approves all aspects of Abbott\u2019s tax proposal, the drastic effects would eventually force the state to scramble to create other revenue sources to keep paying for basic services or face a stagnant economy, Jillson cautioned.\u00a0<\/p>\n \u201cIt\u2019s just common sense to think that if your working population lacks health insurance, it\u2019s less healthy and productive than the working population of another state might be,\u201d Jillson said. \u201cSimilarly, if you\u2019re underfunding your schools, it means the productivity of your future workforce is less than it might be. So, there are costs to being too stingy with your money.\u201d<\/p>\n Sign Up for SA Current newsletters.<\/strong><\/a><\/p>\n Follow us:\u00a0Apple News<\/a>\u00a0|\u00a0Google News<\/a>\u00a0|\u00a0NewsBreak<\/a>\u00a0|\u00a0Reddit<\/a>\u00a0|\u00a0Instagram<\/a>\u00a0|\u00a0Facebook\u00a0<\/a>| Twitter<\/a>\u00a0| Or sign up for our\u00a0RSS Feed<\/a><\/strong><\/p>\n Related Stories<\/p>\n \t\t\t\t\t\t\t\t \n\t\t\t\t\tAbbott\u2019s appointment of former Texas Rep. Nate Schatzline as senior adviser on election policy sends a dangerous signal. \t\t\t\t<\/p>\n
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