On January 16, 2018, a Property Tax Policy was proposed by Texas governor Greg Abbott which sparked a long discussion on how this would affect local government institutions and the residents of Texas. One particular focus of these discussions was the noticeably lowered cap of property tax revenue for local districts.


With this bill comes the fact that school districts, cities, and other forms of local government establishments would not be able to collect revenue worth more than 2.5 percent annually unless the voters give their approval, specifically 2/3 of voters so that their request for a higher revenue would be approved. A lower property tax cap would also mean that public education would need Abbott’s approval for state funds, especially since it takes up majority of property tax bills.

Effects of the property tax revenue cap

Before the bill was proposed, local government districts can collect up to more than 8 percent of property tax revenue, given that it can only happen if revenues increase past 8 percent plus if the voters give their approval. Pushing the cap to 2.5 percent means that there needs to be another way for local governments to earn, such as a consumption tax, so that public services’ quality won’t go down because of lack of funds.

The goal of the proposed bill was to lower the property tax each individual that lives in Texas pays. However, with the terms and conditions that come with the bill, an individual’s property tax may also depend on how much their tax entity collects. If the assessment on their community is below or only up to 2.5 percent, then that means their individual tax bill will still increase greatly – this also increases the chances of them getting kicked out of their own homes just because they can’t afford to pay their property tax.

If the tables were reversed and the community’s assessment goes beyond 2.5 percent, the main concern now is if the State would cover the lowered tax rates. With an above 2.5 percent assessment, school districts would have to lower their tax rate and figure out a way to deliver quality public education with a limited budget.

The final verdict from the government

Ever since the proposal of this bill, the House and the Senate have been at a standstill on their vote for the bill. Feedback about the bill says that it shows how much Governor Abbott “doesn’t trust Texans to make the best decisions” for the community, as said by Ann Beeson, the executive director of the Center for Public Policy Priorities.

Right now, the property tax committee of Texas just passed the rollback bill, though many experts are saying that the 2.5 percent rate won’t last long. Once the government sees the effect the cap has on its local establishments, especially its school districts, they can reconvene once again and talk about raising the 2.5 percent cap just to make sure residents are getting the good quality public services they’re paying for.

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