EXCLUSIVE: Property Taxes Rose 12% in 2022

Jonathan Richie of The Dallas Express published an exclusive on our latest report, Property Taxes up 12% In 2022 Despite Legislature’s Promise of Tax Relief.

Former Texas senator and gubernatorial challenger Don Huffines’ Huffines Liberty Foundation is releasing a report today detailing alleged issues with the property tax method in Texas and calling for an overhaul of the system.

“To put it bluntly, property taxes are immoral,” Huffines argued to The Dallas Express.

“Any policy that keeps Texans from owning their own home, while at the same time forcing renters and businesses to carry a burden from which they get no relief, should not pass. It should not even be considered,” he continued.

“I spend my time and treasure advocating for broad property tax relief where every citizen is a winner and treated equally,” Huffines said. “Texans have options, let’s explore them.”

Based on an analysis of data from the Texas Comptroller’s office, the Huffines Liberty Foundation study claims the total amount of property taxes collected from Texas citizens increased by 12.17% from 2021 to 2022 despite the legal limits placed on rate increases.

“It turns out … that the Legislature’s limits on property tax growth leak like a sieve and allow property taxes to grow much faster than anticipated,” the report claims.

The reason for this, according to the report, is a complicated and obscure tax system designed to hide such increases from the voters.

“One of the problems with unlimited government is how its complexity masks the truth from voters and taxpayers,” the report says. “One example of this is Texas property taxes.”

“Texas politicians for years have been bragging about what a great job they have done providing property tax relief for Texans,” it continues, suggesting that prior attempts at property tax relief “failed … spectacularly.”

From 1996 to 2018, the study claims that the average amount of property tax collections increased by an average rate of 6.1%. However, since 2018 that rate has spiked to 6.77%.

From 2021 to 2022 alone, the total amount of property tax collections increased by 12.17%, according to the report.

The rapid rise in collections comes despite limits placed by the Legislature on rate increases in 2019, which cap rate hikes at 3.5% for most taxing entities, 5% for school districts, and 8% for special taxing units.

Lawmakers have made several attempts to reduce the burden on taxpayers by attempting to “buy down” increases and expanding mitigating factors such as homestead exemptions.

According to a study by the Texas Taxpayers and Research Association, efforts by the Texas Legislature in 2019 prevented taxpayers from paying an additional $6 billion in property taxes in 2021.

Nevertheless, the amount of money collected each year by property taxes continues to climb, impacting Texans across the state.

Pointing to several mechanisms that allow the property tax rates to climb higher than the typical limits, the report identifies how the “unused increment rate” enables tax districts to raise rates by as much as 10.5% without voter approval.

According to the Comptroller’s office, most taxing entities can store up or “bank” the amount of yearly rate increase they are allowed without voter approval for up to three years and then adopt the total increase all at once.

For example, typically, Dallas County would have to seek explicit voter approval to raise property taxes by any more than 3.5%, but if it chose not to, then it could increase rates by 7% the following year without a popular vote.

Similarly, if it waited another year with no increase, then rates could jump as much as 10.5% without voters having a say in the matter.

The Huffines Liberty Foundation report concludes by calling on the Texas Legislature to provide meaningful property tax reform that removes loopholes and actually reduces the amount collected from citizens.

“The Texas Legislature currently has the largest budget surplus in state history at about $32 billion,” the report notes. “Yet they have said they would use only about $10 billion for property tax relief this session.”

“Unless the Legislature at least triples the amount of property tax relief … the results this year will mirror what we have seen before; more spending on education with only minor and temporary property tax relief,” the report claims.

The study concludes by arguing that “the Legislature must use all of the current $32 billion surplus to provide property tax relief and change the current dysfunctional property tax system.”

Other factors contributing to the increase in total property tax collections include “skyrocketing” property appraisals, inflation, and the influx of people moving to Texas, as reported by The Dallas Express. The Huffines Liberty Foundation said they did not factor in these variables when looking at the increase.