Abbott Wants to Cut Property Taxes to Zero
in Move that Senate Boss Calls Impractical
Capitol Inside
June 2, 2023
Governor Greg Abbott floated a test balloon for a radical reinvention of the tax system in Texas on Friday when he pitched his support for the absolute abolishment of property taxes in a move that Lieutenant Governor Dan Patrick portrayed as a fantasy that has no chance to pass.
Abbott raised the specter for a dramatic change in state taxation in a series of six Twitter posts that he fired off in a span of 21 minutes this afternoon on the subjects of property tax relief and private school vouchers. Abbott promised to include school choice in the call of a special session as some point this year.
"Texans want to OWN their property, NOT rent it from the government," Abbott said in the midst of a Twitter barrage this afternoon. "We can provide them with that opportunity by ELIMINATING property taxes in Texas."
The Republican governor elaborated in a tweet six minutes earlier. "Zero is what we want YOU to pay for your property taxes in the state of Texas."
Patrick shot down the proposal to wipe out taxes on property around the state when the Texas Public Policy Foundation raised the specter for a such a move on Thursday night. The lieutenant governor said the elimination of property taxes would force the state to hike the sales tax to an astronomical level to offset the revenues that Texas would lose with the change that Abbott is pitching.
"We all want to end property taxes for good but it would require increasing the local sales tax from 8 ¼% to about 19%," Patrick tweeted. "Not happening! The @TPPF plan that @GovAbbott endorses is not realistic and everyone knows it. Whenever sales taxes underperform, property taxes will immediately go back up."
Abbott - in typical fashion for a politician who isn't serious - didn't mention how he would propose to replace the revenues that the state, the public schools and local governments would lose without levies on homes and business property here. Patrick declined to identify the only viable option to offset the money that the state would be giving up if Abbott has his way on an end to property taxes in Texas.
The Legislature could turn to a personal state income tax as a way to put an end to property taxes without the need to more than double the the combined state and local sales tax rate that Patrick cited. Texas has a state sales tax of 6.25 percent that can go as high as 8.25 percent when municipal levies on consumption are added to the sum.
Texas ranked 14th in the nation in combined state and local sales tax rates at the outset of 2023. Louisiana and Tennessee were tied for highest state and local tax rate at 9.55 percent in a study by the Tax Foundation. Arkansas was close behind in third at 9.46 percent and Alabama fourth at 9.25 percent - one more entire penny on every dollar subject to the tax.
Tennessee and Texas are in a group of seven states that do not tax personal incomes along with Alaska, Florida, Nevada, South Dakota and Wyoming. Tennessee is the only state without an income taxes with a higher sales tax than Texas.
With income, sales and property taxes as the three main components of a truly balanced tax system, no state in modern times has relied exclusively on just one.
Abbott threw the scraping of property taxes into the mix after the Senate convened on Friday morning and then quit abruptly for three days as the only legislative chamber still in business. The House voted to adjourn sine die on Tuesday night during the first full day of the initial special session that Abbott set to begin on Monday night several hours after the House and Senate put the regular session to rest.
The Senate doesn't meet again until 6 p.m. on Tuesday - a sign that Patrick may see the current special session as a prime opportunity to build public support for a homestead exemption increase that he vows to be in any tax cut plan that the upper chamber adopts. A $17 billion property tax relief that the House passed as an all-or-nothing proposal for the Senate to endorse or to kill contains a proposed compression of local tax rates that Abbott has thrown his support behind after staying out of the fight for five months.
Patrick and Senate Republicans face a choice now of continuing the current special session as a publicity stunt with no shot at passing a single bill or doing what it takes to prompt Abbott to get a second special session under way without further procrastination and gamesmanship by a lieutenant governor who's been scorned.
more to come ... |
