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Opinion

Another welcome tax cut in Texas

People are being priced out of their homes.

It is a small step, but we applaud Gov. Greg Abbott and Lt. Gov. Dan Patrick for an effort to shave a few dollars from school property tax bills.

A measure in the Texas Legislature’s third special session would use $2 billion, and possibly as much as $4 billion, from the state’s surplus to reduce school taxes, a move that could save the owner of a $300,000 home about $200. That’s not a lot of money, but sharing a portion of the state’s prosperity with taxpayers is welcome news.

The problems in the state’s property tax system run deep. As any homeowner knows, the anxiety is not from school tax rates set by the local school boards. For the most part, tax rates have held steady or declined slightly.

But the flip side of Texas’ prosperity is the steady increase in residential property assessments that has forced homeowners to reach deeper in their pockets to pay school taxes. And although thousands of Texans rush each year to contest higher appraisals, most come away empty-handed or with a slight rollback of the appraisal district’s assessment.

Older Texans on fixed incomes, even those with senior exemptions and freezes, too often end up being priced out of their homes. Young first-time homebuyers are priced out of homeownership and stay in apartments where monthly rents are rivaling monthly mortgages. On top of this, a hot housing market, tight inventory and the eventual upward bump in interest rates will negatively impact affordability.

For the most part, Texas law requires each county appraisal district to appraise taxable property at market value. Establishing market value requires an assessment of a house’s value based on the sale prices of other properties in your neighborhood. Determining market value for commercial properties that vary in size, location, use and purchase price is a much tougher call, and the tax burden shifts onto residential property owners.

We would like to see the Legislature reform appraisals in Texas, especially the imbalance between residential and commercial assessments. This gap is systemic and produces heavy burdens on residential taxpayers relative to commercial taxpayers.

Some experts say the pandemic has added to the disparity, resulting in higher property taxes for homeowners and lower property taxes for commercial owners. In previous sessions, the Legislature approved bills that have danced around the edges of the appraisal process, protests and appeals but have done little to demonstrate that the appraisal process is equitable.

The measure also demonstrates fiscal foresight. The first $500 million of any additional surplus projected by the Texas comptroller would stay in the general revenue fund. The rest would be allocated equally between the general revenue fund and further school tax reductions. This one-time measure delivers tax relief, provides ample surplus for other priorities and doesn’t lock the state into unsustainable cuts. The next step should be to clean up the appraisal system.

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Dallas Morning News Editorial. Dallas Morning News editorials are written by the paper's Editorial Board and serve as the voice and view of the paper. The board considers a broad range of topics and is overseen by the Editorial Page Editor.

editorialboard@dallasnews.com @dmnopinion
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