Abolishing Property Taxes Not an Easy Feat
No one at the Capitol loves property taxes, but no clear alternative has emerged. Photo by Lizzie Chen/KUT NewsAudio clip: Adobe Flash Player (version 9 or above) is required to play this audio clip. Download the latest version here. You also need to have JavaScript enabled in your browser.
Voters in North Dakota rejected efforts to abolish state property taxes Tuesday. Some conservative groups in Texas have suggested trying the same thing here, where local school districts and cities would have to make up for that lost revenue.
As it stands now in Texas, school districts get much of their revenue from property taxes. That’s not to mention the money that goes toward funding roads and police. But some groups have argued that Texas is leaning on property taxes too much.
“I surely believe that we’re not doing it right,” said Tom Pauken, who sits on the Texas Workforce Commission.
Pauken doesn’t necessarily think Texas can get rid of property taxes altogether in the short term. But he says a few different options are out there, including having something like a capital gains tax on the purchase of your house. You could pay the tax over the course of 10 years, but the tax would eventually expire. But Pauken says legislators must have an alternate plan in place if they want to change things.
“If you’re talking about getting rid of property taxes or at least allowing people to have a time certain by which they pay their property bill off and they don’t have to worry about it again, you’ve got to make sure that you make up for the lost revenue,” he said.
State Rep. Harvey Hilderbran, R-Kerrville, chairman of the House Ways and Means Committee, agrees. “Most businesses agree that if we had to fix something, property taxes would be the best thing to fix, but nobody has the answer,” he said.
His committee had a hearing last month where different groups voiced concern with the state of the property tax code. But Hilderbran says comparing Texas to North Dakota, which has seen a boom in oil and gas production over the last few years but maintains the third-lowest population in the nation, is apples to oranges. He says North Dakota doesn’t rely on property taxes to fund education the way Texas does.
“I know that Texans would vote to abolish or repeal or at least substantially reduce the role of property taxes, given the opportunity,” he said. “But in order to do that, and be responsible, you’ve got to replace the source of funding that they represent in the state of Texas and school finance.”
Hilderbran says he’s asked some of the conservative groups that presented their findings in May, like the Texas Public Policy Foundation, to talk to representatives from the real estate industry and come back with more details.
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