Did Texas see a $20 billion increase in property taxes under Abbott?
Democratic gubernatorial candidate Beto O’Rourke blames Governor Greg Abbott for high inflation in Texas, taking a page out of the GOP’s playbook by attacking President Joe Biden.
O’Rourke posted an Instagram video on April 23 with the caption “Greg Abbott is the biggest driver of inflation in the state of Texas.” Television news clips were stitched together with clips of O’Rourke speaking.
In a clip from the montage, O’Rourke says, “Under Greg Abbott, property taxes have gone up $20 billion.”
O’Rourke went on to say, “When you add that to the other inflation he’s causing…” with more clips pointing to electricity bills, April border traffic slowdowns due to additional commercial vehicle inspections, Abbott ordered that he said would improve border security and increase internet and phone costs for rural Texans.
Overall, O’Rourke says Abbott is exacerbating consumer prices in Texas, which were already rising nationally.
We looked at one element of the announcement: that eye-popping figure of a $20 billion increase in property taxes. Is it true?
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Nationally, inflation hit a 40-year high according to March data from the Bureau of Labor Statistics, prompting criticism of Biden, especially as inflation relates to public spending.
O’Rourke’s campaign pointed to a Texas Taxpayers and Research Association report titled “Relief from Rising Values: 2019 Property Tax Reforms Cutting Tax Rates at a Record Pace.”
The report examined the effects of legislation by state Sen. Paul Bettencourt, R-Houston, and state Rep. Dan Huberty, R-Houston, which overhauled the school funding system and school budgeting practices. local governments and reduced property tax increases for Texans. The association found that property taxes continue to rise, but at a slower rate.
The campaign specifically pointed to a figure in the report outlining Texas local property taxes from 2011 to 2021. Property taxes levied were just over $50 billion in 2015, when Abbott took office, and just over $70 billion in 2021. The difference is about $20. billion increase.
Data on estimated local property tax revenue is available on the State Comptroller’s website. According to 2018-19 Biennial Report on Property Taxes from the Office of the Comptroller, property taxes totaled $52.2 billion in 2015.
The Comptroller’s property tax data for school districts, cities, counties and special districts indicates that there were approximately $73 billion in property taxes collected statewide in 2021. That’s an increase of at least $20 billion and consistent with analysis by the Texas Taxpayers and Research Association.
In the six years before Abbott’s election, property taxes increased to a lesser extent, but this growth in property taxes was limited by the Great Recession.
Note, although O’Rourke attracts voters who may also be homeowners, commercial and residential property taxes are included here.
Stuart Greenfield, an economics professor at Austin Community College whose career in state government included work on economic models and how Texas distributes money to school districts, said a little more than half of the assessed value of school district property in 2019 was made up of single-family and multi-family homes.
Is Abbott to blame?
The Texas Taxpayers and Research Association is a lobby organization that spends most of its money on research. Its political advocacy has a fiscal conservative bent, association president Dale Craymer said, but the organization does not advocate one party’s policies over the other.
Cramer said O’Rourke spoke correctly about the group’s report based on data he analyzed from the comptroller’s office.
The implication of O’Rourke’s announcement, however, is that Abbott is responsible for the rising property taxes.
Craymer said the state government’s role is at best indirect when it comes to property taxes, because rates are set locally, not by the governor or legislature.
“Basically, the process by which rates are set and passed is set out in state law,” Craymer said. “The Legislature and the Governor are obviously responsible for drafting and implementing these laws. But the state really has no say in how much property tax individual jurisdictions levy.”
The association’s report revealed that taxes would have been a little higher without two property tax changes made by the Legislative Assembly in 2019.
One created a process whereby school district property taxes would decrease over time for seniors, whose school district taxes are capped.
The second change, Craymer said, increased the school district’s property tax exemption for homeowners from $25,000 to $40,000, saving homeowners about $180 a year.
Also in 2019, the legislature required cities, counties, and most special districts to seek voter approval to establish a property tax that generates more than 3.5% revenue. For junior colleges and special hospital districts, the voter approval threshold is 8%. For school districts, it is 2.5%.
State policy also affects property values and increases in value are tied to increased taxes. Richard Auxier, senior policy associate at the Tax Policy Center at the Brookings Institute and the Urban Institute, said Texas home values are rising in line with the rest of the country.
“While you could frame that as property taxes increased, you could reverse that as home values increased,” Auxier said. “It’s always going to be a trade-off, because people want their home value to go up, but they don’t want their taxes to go up.”
Texas Republicans also campaigned on property tax relief. Abbott added property tax relief to the agenda for the Third Special Session of the Legislative Assembly in 2021, resulting in a now approved amendment to the Texas Constitution. Abbott also went public with its support for property tax relief featured prominently in a May 2 tweet ahead of the May 7 election.
Abbott’s the campaign responded to O’Rourke’s announcement saying that Abbott has cut property taxes by $18 billion since taking office and that O’Rourke has raised property taxes as a member of the El Paso City Council.
Texas voters approved Proposition 2, which increases the homestead exemption for school district property taxes from $25,000 to $40,000. They also approved Proposition 1, which corrected a 2019 oversight of tax relief that did not apply to owners with disabilities or age 65 or older because their school tax burden is capped.
After:Texans overwhelmingly approve of property tax relief proposals
O’Rourke said in an April 23 Instagram video about rising inflation in Texas that “under Greg Abbott, property taxes have gone up $20 billion.”
Data presented in biennial reports and on the Comptroller’s website indicate that estimated revenue collected through property taxes has increased by more than $20 billion. O’Rourke’s figure was correct.
But property taxes are set locally, not by the state. Although state policies can indirectly affect property taxes, the governor’s role in setting property taxes is indirect.
We rate this as primarily true.
- Instagram video posted by @betoorourke, April 23, 2022
- U.S. Bureau of Labor Statistics, Economic News Release: Consumer Price Index Summary, April 12, 2022
- Texas Taxpayers and Research Association, “Relief from Rising Values: 2019 Property Tax Reforms Cutting Tax Rates at a Record Pace”, April 2022
- Telephone interview with Dale Craymer, president of the Texas Taxpayers and Research Association, May 2, 2022
- Telephone interview with Richard Auxier, senior policy associate at the Urban Institute and Tax Policy Center, May 3, 2022
- Phone interview with Stuart Greenfield, Department of Economics, Austin Community College, May 5, 2022
- Texas Comptroller, “Biennial Property Tax Report: Tax Years 2018 and 2019 Texas Property Tax”
- Texas Comptroller, “TAX RATES AND LEVIES,” including 2021 School District Rates and Levies, City Rates and Levies, County Rates and Levies, Special District Rates and Levyes data sets
- Email from Charles E. Gilliland, Economist at Texas Real Estate Research Center, May 13, 2022
- Email from Kevin Lyons, spokesperson for the Texas Comptroller of the Public Accounts, May 12, 2022
- Follow-up phone call with Kevin Lyons, spokesperson for the Texas Comptroller of Public Accounts, May 12, 2022
- Tweet by Greg Abbott (@GregAbbott_TX)May 2, 2022
- “87th 3rd Session Convened”, Texas Legislative Reference Library
- Chuck Lindell, US Statesman from Austin “3rd Special Ends with New Political Maps but No Vaccine Warrants Ban”, October 19, 2021
- Chuck Lindell, American statesman from Austin, “Texans overwhelmingly approve of property tax relief proposals”, May 7, 2022
- Texans tweet for Abbott (@AbbottCampaign)April 20, 2022
- Texans for Greg Abbott, “THE STORY OF BETO’S PROPERTY TAX INCREASE”, April 20, 2022
Contact Nusaiba Mizan at [email protected] Follow her on Twitter at @nusaiblah.