During a discussion with the Texas Public Policy Foundation Friday afternoon on bills passed during the 88th legislative session, Texas Gov. Greg Abbott talked about the ongoing work to reduce and eventually eliminate the state's property tax.
Abbott reiterated Friday to TPPF CEO Greg Sindelar his intent to deliver to residents the largest property tax cut in the history of the state that will eventually lead to the elimination of property taxes.
This session, legislators are working to reduce the property tax burden through tax compression, which is the state's ability to use existing taxpayer money to buy down the school district maintenance and operations tax rate, effectively lowering the overall property tax obligation. The Texas House earlier this week approved a compression bill during Abbott's first special session. In the Texas Senate, Lt. Gov. Dan Patrick wants to pass a bill using compression, too, but the Senate's plan also includes a larger homestead exemption of $100,000 to drive property taxes down even further than compression alone. To date, the chambers have not yet come to an agreement on which plan will make it's way to the governor's desk.
Abbott said Friday his plan is to use compression over multiple legislative sessions to chip away at the M&O tax until there is a zero balance due by the property owner.
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"What we want to achieve in the state of Texas is to eliminate your property taxes. Make them go away!" Abbott said. "Zero is what we want you to pay for your property taxes in the state of Texas."
Abbott said they are planning to dedicate more than $17 billion from this session to buying down the M&O tax, which will cut the tax rate by 29%. The governor said that would put legislators on a path to further drive down the M&O tax in future legislative sessions until it eventually gets to zero.
"That will help you achieve what TPPF wants to achieve, what I want to achieve, but most importantly, what Texans want. Texans want to own their own property, not rent it from government. We must provide that by eliminating property taxes in Texas," Abbott said.
Following the discussion with the TPPF, Abbott repeated his messaging on Twitter.
For those concerned about how the state will sustain paying down the M&O tax, the governor said Texas' annual economy produces $2.3 trillion per year and that $17 billion to drive down property tax this session worked out to less than one-tenth of 1% of the state's GDP.
"We can do it," Abbott said.
The governor added that reducing the property tax burden would save residents billions of dollars per year, much of which may then be spent in the state, further increasing the sales tax revenue and growing the GDP.
