Public expectations and the political realities of reducing property taxes

Property Tax committee Chairman and state Sen. Paul Bettencourt, R-Houston, during the Senate Property Tax Committee Hearing on on Feb. 6, 2019. Photo by Emree Weaver / The Texas Tribune

The conviction that Texans are demanding lower property taxes in the face of increasing property values and rising tax bills has been an article of faith among elected officials in Austin, especially Republicans and their aligned interest groups. While that seeming consensus among elected officials might make cynical political observers suspicious, the February 2019 University of Texas/Texas Tribune Poll found that many Texans are, in fact, ready to see their property taxes go down. However, a closer look at those attitudes suggests that legislators should be cautious about the public expectations that will greet whatever action they manage to take.

Overall, a majority of Texas voters (58 percent) say that Texans are currently paying too much in property taxes, compared to 23 percent who say that they’re paying the right amount and only 6 percent who say Texans pay too little.

The poll confirms both dissatisfaction with current levels of taxation, which is no surprise, but also finds inflated expectations of the centerpiece of the property tax reduction conversation, as well as skepticism about its potential consequences for local services.

The legislative strategy thus far is designed to limit local government entities’ ability to increase property tax revenue, year-over-year, without voter approval if that growth exceeds 2.5 percent — the currently discussed threshold which is already a major point of negotiation. On the whole, the outline of this approach is popular among Texas voters. Overall, 72 percent expressed support for requiring voter approval before property tax revenue increases above a set amount, including 84 percent of Republicans and, significantly, 62 percent of Democrats.

Voter perceptions of the likely outcomes of the proposed legislation are more complicated. The UT/TT poll measured expectations by asking follow-up questions about the likely consequences of requiring voter approval of property tax revenue increases. The results yielded some interesting soundings of the crosscurrents the Legislature and the state’s top executives are wading into with the approach they’ve chosen.

Dire warnings from cities, counties, and other local entities about decreased services (especially public safety) and the needs of fast-growing localities are failing to gain traction with the electorate. Only 23 percent of Texas voters think that this legislation would “prevent local governments from providing necessary services”, and only 21 percent think it would prevent them from “responding to population growth.” Even among Democrats expected to be amenable to these claims, the plurality appears skeptical.

But this doesn’t mean that the bill poses no further challenges for its mostly Republican backers. While a majority of voters believe that the bill would “slow the growth in the amount of property taxes Texans pay in the future" (69 percent) — the clear intent of the approach — a majority also (erroneously) believes that the bill would “reduce the property taxes that Texans currently pay” (52 percent). This includes a statistically indistinguishable 53 percent of Democrats and 51 percent of Republicans.

Efforts under way to more directly impact current property tax bills reflect a recognition of these attitudes among the voters, but run into the political difficulties of generating revenue to offset any reduction. Even a tax swap currently being considered — recently explained in a column by Ross Ramsey in the Texas Tribune — would directly impact current property taxes, but comes at the expense of an increase in the state’s sales tax. This, too, is somewhat fraught. When asked in the most recent UT/TT poll whether legislators should consider increasing the state sales tax to pay for education (among other potential revenue sources), the vast majority of Texas voters (74 percent) said no, including 68 percent of Democrats and 80 percent of Republicans.

These results point to the potential hazards if elected officials get too far ahead of themselves in offering self-congratulations about finally “fixing” property taxes.

This has happened before. UT/TT polling in June 2015 showed that Texans found the last homestead exemption increase, the best the Legislature could muster as property taxes became the cause celebré among Republicans, to be small beer. In that polling, conducted at the conclusion of that legislative session, a majority of Texans (56 percent), including 63 percent of Democrats and 53 percent of Republicans, said that the $125 expected average yearly savings in property taxes would not be enough to make a difference to most Texans.

Given that the primary property tax bill currently being considered by the Senate (Senate Bill 2) doesn’t address current property tax rates, and that the property tax swap currently under discussion in the House would save the owner of a $250,000 home approximately $600 per year, one has to wonder whether all these efforts, even should they produce some material progress, will disappoint voters yet again. The state’s leaders have made a public display of their willingness to clasp hands and jump together into the deep end, but it may not be enough if Texas voters have tired of watching them merely tread water.

Disclosure: The University of Texas has been a financial supporter of The Texas Tribune, a nonprofit, nonpartisan news organization that is funded in part by donations from members, foundations and corporate sponsors. Financial supporters play no role in the Tribune's journalism. Find a complete list of them here.

James Henson

Texas Tribune pollster and director of the Texas Politics Project at the University of Texas at Austin


Joshua Blank

Research director, Texas Politics Project, University of Texas at Austin