Feeding the property tax beast

One of the final acts of the third special session of the 87th Texas Legislature was the negotiation of SJR 2, a measure that, if approved by voters in May, would increase the homestead exemption from $25,000 to $40,000 beginning with the 2022 tax year. Property taxes have been a perennial source of griping, especially in areas of Texas experiencing rapid population growth, rapidly rising home values, and the corresponding increase in property tax bills. Of course, as policy makers have been frequently reminded during the long real estate boom in Texas, in Texas’ growth obsessed but revenue-constricted political economy, efforts to reduce property taxes enough for voters’ to actually feel the effects of legislative action are severely constrained. 

While the primary driver of that constraint is fiscal, another major constraint is public opinion. A decade of polling on property taxes illustrate that many voters notice those rising property tax bills, but are likely to be unimpressed with what ultimately amounts to legislative tinkering in efforts to validate some sort of claim that the incumbent government is addressing voters’ concerns. State Senator Paul Bettencourt, one of the most persistent crusaders for hamstringing local taxing authorities, captured the popular demand even as he oversold the relief being delivered by the legislature in a recent speech on the Senate floor: “People see the need for property tax relief, and Texans are going to cry out for that continuously. This is a great way to bring that home to all of the taxpayers of Texas” (per reporting in The Texas Tribune).

Here are some snapshots of public opinion that illustrate this dynamic in the wake of yet another round of legislative efforts to benefit from “property tax relief.” #Spoileralert: it’s probably not enough to satisfy voters in the medium term, even if it provides short-term talking points.

At the end of the regular legislative session in June, the UT/Texas Tribune poll asked Texas voters to approve or disapprove of state leadership and the legislature’s handling of 14 different issue areas, including property taxes. At this point in the extended meeting of the 87th legislature, only 18% of Texas voters said that they approved of the job the legislature had done on property taxes, tied for the lowest overall approval along with bail practices and homelessness. Approval among GOP voters was only 10 points higher than the overall approval (28%), still near the bottom of total approval (For comparison, among Republicans, 63% approved of the job that the legislature did on election and voting laws, 56% on abortion policy).

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2nd Amendment rights44%
Election & voting laws38%
Public safety37%
Immigration & border security36%
Abortion policy32%
Gun violence32%
The state budget30%
Police misconduct29%
K12 public education27%
Electric grid22%
Bail practices18%
Property taxes18%

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2nd Amendment rights15%42%70%
Election & voting laws11%27%63%
Public safety17%26%57%
Immigration & border security10%26%62%
Abortion policy7%26%56%
Gun violence6%27%54%
The state budget12%21%50%
Police misconduct9%18%50%
K12 public education14%15%42%
Electric grid10%16%37%
Bail practices6%13%28%
Property taxes8%11%28%

But property taxes have been a perennial issue in the Texas Legislature. Back in February of 2015, we asked Texas voters how satisfied or dissatisfied they were with the amount of different taxes that Texans pay, with the highest registered dissatisfaction in the amount that Texans pay in property taxes, 55%, including 61% of Republicans, but also 48% and 49% of Democrats and independents, respectively.

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Property tax dissatisfaction55%
Motor fuels tax dissatisfaction40%
Sales tax dissatisfaction34%
Sin taxes dissatisfaction34%
Business margins tax dissatisfaction32%

In that session, the Legislature created a reduction in property taxes that was estimated to amount to a $125 reduction in yearly property tax bills, on average — less than the $175 reduction currently being considered, but certainly a comparable reduction ($10.41 per month versus $14.58 per month, on average), especially given inflation. The UT/TT poll asked voters in June of 2015, after the passage of the measure by the legislature, whether a reduction of this amount was “enough to make a difference to most Texas families” or “not enough to make a difference.” Overall, 56% of Texas voters said that it wouldn’t be enough to make a difference, including 53% of Republicans and 63% of Democrats.

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Enough to make a difference to most Texas families29%
Not enough to make a difference56%
Don't know/No opinion14%

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Enough to make a difference to most Texas families25%20%35%
Not enough to make a difference63%47%53%
Don't know/No opinion12%33%12%

After the “success” of that property tax reduction, the state’s housing market continued its low boil, in many if not most cases erasing the reductions the legislature recently enacted. By 2019, after electoral scares in 2018 led GOP agenda setters to prioritize kitchen table issues, namely public education and property taxes, Texas voters were apparently already fed up. In February of 2019, 58% of voters said that Texans pay too much in property taxes, compared to 23% who said that they pay the right amount, and only 6% who said that they pay too little. And while these attitudes were driven by Republicans, among whom 66% said that Texans pay too much, the plurality of Democrats (48%) and majority of independents (57%) agreed.

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Too much58%
Too little6%
About the right amount23%
Don't know/no opinion14%

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Too much48%57%66%
Too little8%6%4%
About the right amount24%17%23%
Don't know/no opinion20%20%8%

At the end of that session, in which the legislature enacted long-considered constraints on the extent to which local governments can raise their property taxes while compensating by pumping funds into public education, we asked Texans, “Now that the legislative session is over, do you expect the property taxes that Texans pay to decrease, increase, stay the same, or don’t you have an opinion?” Only 9%, likely correctly, expected that their property taxes would actually decrease, with 27% expecting them to stay the same, and the plurality, 36%, still expecting an increase in the coming years.

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Stay the same27%
Don’t know/No opinion28%

Given these expectations, it’s not surprising that despite the persistent efforts of GOP leaders to highlight the legislature’s work on property taxes with great fanfare, only 6% of Texans said in June of 2019 that they strongly approved of how the state government had handled the issue. Sixty percent said that Texans pay too much in property Taxes, unchanged from the beginning of the session. By February of 2020, once the changes of 2019 (forget the 2015 changes) had presumably had some time to take effect and be felt, 54% said that Texans pay too much in property taxes – essentially unchanged from the start of the prior legislative session that focused so much on the issue.

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Too much54%
Too little5%
About the right amount26%
Don't know/No opinion16%

The pattern of Texas attitudes toward property taxes illustrate both the audience for the last-minute push in the final days and hours of the third special and the likelihood that another incremental gesture in the direction of “property tax” relief is unlikely to meet the market for a serious reduction in property tax bills. Expect to hear a lot about the gesture in the primaries and even in the fall general election campaign – but don’t expect voters to be convinced by what they hear.

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