TTARA: Houston property owners should 'be prepared for the sticker shock' of still higher property taxes

As property taxes in Texas could increase up to 50% this year, there have been renewed calls across the state for property tax reform, yet a recent report by the Texas Taxpayers and Research Association (TTARA) points out that it very well could have been worse.

Appraised property values are expected to increase across the state of Texas by 20% to 50% this year, a recent report on TheTexan.news said. Lt. Gov. Dan Patrick is taking aim at property taxes in the Texas State Senate, where 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 yearly since at least 2017, Brad Johnson of The Texan tweeted. He cited data from the comptroller's office.

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

"Texas property owners need to be prepared for the sticker shock that home shoppers have been experiencing the past year," the TTARA report said. One bright spot, however, was that 2019 reforms reduced property taxes by a collective $6 billion across the state.

Various parties disagree about what should be done to reduce property taxes, The Texan said. Gov. Greg Abbott wants a compressed rate but does not want to do away with the M&O rate altogether. Rep. Dustin Burrows (R-Lubbock) prefers property tax reform to take place through education code reform. The Texas Public Policy Foundation wants portions of the state budget surplus to replace M&O funding.

The Houston Independent School District's property tax grew from $2.0 billion to $2.2 billion from 2016 to 2020, a 12.2% increase; a recent report from the Texas Public Policy Foundation said. The city's aggregate population and inflation grew by 5.3% during that time, resulting in 7% faster growth than the preferred growth rate.

Conroe Independent School District and Katy Independent School District were the only two school districts in Texas that kept their property tax growth rate below the preferred growth rate.