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With a record $33 billion carryover balance in 2023, lawmakers spent $23 billion on a massive property tax cut package just two years ago. Now, they’re set to do it again. On top of existing, automatic cuts established by prior legislation, the 89th Legislature’s initial budget would spend an additional $3.5 billion in all-new cuts. The House and Senate will be negotiating in the weeks ahead on how those cuts will be implemented.
Altogether, according to the Legislative Budget Board, the proposed 2026-27 budgets would spend $51 billion on ongoing, permanent, and proposed tax cuts instituted since 2019. We’ve had enough across-the-board property tax cuts. Our carryover balance exists because of an unusual, one-time revenue surge, and it should not be the basis for permanent tax cuts. The Legislature cannot keep cutting property taxes session after session while repeatedly neglecting other priorities in our state budget. Texans need more investment in education, health care, jobs, wages, infrastructure, our state workforce and more – not more tax cuts.
We know many Texas families are struggling with the costs of housing, of which property taxes are a big part. About a third of Texas households – and more than half of renters – are burdened by housing costs. Across-the-board property tax cuts, as the Legislature has been contemplating, are costly and often benefit wealthy homeowners the most. There are better ways to focus assistance on low-income families and renters who may have not benefited from the previous rounds of cuts. This report explores some possible approaches, including renter’s rebates, circuit breakers, and more.