Property tax revenues in the state of Texas jumped from approximately $19 billion to nearly $60 billion in two decades, state records show.
The property tax rate imposed in Texas is one of the highest in the United States. According to a new report from 24/7 Wall St, the effective property tax rate in Texas is the sixth highest in the country at 1.70%. Per capita property taxes, at $1,731.37, is the 13th highest.
The average property tax collected by state and local governments across the United States is about $1,500 a year per person.
The financial news and opinion website also report that median home value in Texas as of the 2015 fiscal year is $172,200, the 20th lowest in the United States. The median household income is the 23rd highest at $59,206.
In 2017, Texas residents shelled out $59.4 billion for property taxes. In 2010, they paid $40.3 billion. In 2000, it was $22.5 billion.
Texas does not have a state property tax. It is up to the local taxing units to set tax rates, collect property tax, and use the tax revenue to fund local services.
Property taxes are one of the main sources of funding for local governments. This money is usually spent on cleaning and repairing streets and roads, fire protection, police departments, and schools. It pays for classroom textbooks, teachers’ salaries, and other necessities.
Property tax reform
The rapidly rising property tax rate in Texas has had residents complaining and state officials vowing to do what they can to slow the increase. This despite the fact that state lawmakers aren’t the ones who set the local tax rates.
School districts are among those most heavily affected by the burgeoning property tax. They make up approximately half of tax bills and skyrocketing local property taxes cut significantly into school funding.
As a result, some lawmakers have proposed an increase in public school funding to alleviate the burden of these taxes. Lawmakers are also looking into making significant changes to the way local governments set their tax rates.
The Texas Property Tax Reform and Relief Act of 2018 — or Senate Bill 2 and House Bill 2 — seek to limit the growth of property tax revenue. The bills aim to cap the amount of revenue that cities, districts, and counties can collect to 2.5%. Any amount higher than this and voters would have to step in.
Taxes and exemptions
There are also those who suggest that Texas can provide some relief to property owners while also putting more money into public schools by eliminating some of its tax breaks. Currently, tax exemptions in the state amount to nearly $60 billion a year.
Texas provides tax breaks to school organizations, charitable groups, and products such as food and medicine. There are also business property and homestead exemptions.
According to the Fort Worth Star-Telegram, Tarrant County Judge Glen Whitley has suggested that getting rid of some of the exemptions could help reduce property taxes and increase sales tax revenue.
“If we all agree more money needs to be spent, the Lord ain’t sending it down from Heaven,” he said. “They’ve got to stand up and make tough decisions.”
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