The Texas Tax Burden: How GOP Policies Hurt Homeowners And Public Schools
The Republican's economic legacy in Texas will be skyrocketing property taxes and failing public schools.
Former Governor Rick Perry once said, “The best way to raise revenue is to lower taxes and give people the freedom to create wealth. Government’s job is not to try to create wealth but to create an environment in which people are free to create wealth.”
This idea forms the core of the Republican economic approach in Texas. But after 30 years of Republican control, we can see the long-term consequences of that philosophy. It’s given us underfunded schools and skyrocketing property taxes.
By cutting state taxes and refusing to tax corporations properly, Republicans have shifted the burden onto everyday Texans. Property taxes are high because local governments are left to cover the shortfall, while schools, especially in lower-income areas, struggle with inadequate funding. Texans are paying more but getting less in return.
Yesterday, the Texas House held a joint hearing with the Select Study Committee on Sustainable Property Tax Relief and the Committee on Ways and Means to discuss the current state of property taxes and ways to reduce them.
While taxes aren’t everyone’s favorite subject, adequately funding public schools is vital to millions of Texans. The hearing was five hours long. I’ve included the clips if you like tax discussion, but I’ll give you the breakdown below. Let’s get into it.
Texas Comptroller Glenn Hager was the first person to testify.
Hager painted a rosy picture of Texas’ economy, noting that the state’s strong fiscal position has enabled historic property tax cuts, with $18 billion in total cuts from the last session alone. According to Hager, these cuts included a 23% reduction in school district property tax rates and a 150% increase in the homestead exemption.
But despite these numbers, Hager acknowledged a fundamental reality: the state’s tax revenues are slowing. He even admitted that while the state has frontloaded more money into public education to ease the burden on local taxpayers, this shift doesn’t address the deeper issue: Texas schools are still chronically underfunded.
A few other points made by Hager:
Sales tax constituted 58% of all tax collections and was 1.2% above 2023 collections.
Motor vehicle sales tax revenue is up 2%.
Franchise tax (business tax) revenue up 6%.
Oil production tax is up 6%, but natural gas production tax is down 36%.
Texas employment grew by 2.2% from the previous year, ranking it the seventh-fastest state in employment.
Next up was Education Commissioner Mike Morath.
Mike Morath’s testimony lasted two hours, and while it was dense, it shed critical light on the state’s convoluted system for funding public schools. He began by outlining Texas’s basic school finance structure, explaining that funding primarily comes from state revenues and local property taxes. The state’s contribution has been shrinking over time, leaving local governments to pick up the slack, directly contributing to the rise in property taxes.
One of Morath’s key points was the impact of property tax compression, which was implemented in 2019 to lower the burden on taxpayers. While it did reduce property tax rates, it didn’t solve the underlying problem—Texas schools are still underfunded.
Morath talked about the state’s efforts to provide relief through homestead exemptions, which have increased significantly in recent years. However, while these exemptions provide relief for homeowners, they further reduce the amount of money flowing into public schools, exacerbating funding shortages.
Texas school finance system is based on a complex formula, which includes factors like:
Student enrollment.
Average daily attendance.
Local property wealth.
Morath pointed out that enrollment has been slowing, and attendance has dropped, particularly during COVID-19. As a result, many school districts receive less funding because it’s tied to attendance, leaving schools struggling to compensate for the loss.
He also pointed out that special education programs are vastly underfunded, with the state covering only a fraction of what is needed to support students with disabilities adequately. Morath said the funding shortfall for special education alone could be as much as $1.7 billion.
Commissioner Morath Morath discussed the disconnect between state property value appraisals and local funding expectations. When property values rise, the state assumes that school districts are collecting more money and reduces its contributions accordingly. However, districts are underfunded when local appraisals are miscalculated or lag behind market value. This discrepancy has led to growing frustrations among local officials who feel the state is shortchanging them.
Morath ended his testimony by giving a few potential solutions for the legislature, including increasing the homestead exemption further, adjusting the funding formulas to better account for inflation and rising costs, and exploring new revenue sources to fund public education. However, he was clear: without significant changes, the current system is unsustainable, and Texas schools will continue to suffer.
Aren’t Conservatives flocking to Texas for low taxes? A few things to point out.
It’s a misconception. Maybe it’s a misinterpretation. Or perhaps it’s intendingly misleading.
Here are the facts:
Texas has the fifth highest property tax in America.
Texas has the 5th lowest business tax rate.
Republicans like to point out that our property taxes are so high because Texas doesn’t have any income taxes. They call that “overall tax burden.”
We aren’t the highest or the lowest for the “overall tax burden” in Texas—we’re somewhere in the middle.
However, the problem is that the “overall tax burden” doesn’t tell the whole story. Texas’s lack of income taxes primarily benefits the wealthy, while the high property and sales taxes disproportionately hurt working-class and middle-income Texans.
When a state refuses to tax corporations or the wealthiest residents properly, someone must pick up the slack. That someone is regular homeowners, renters, and small business owners who carry the burden through property taxes and sales tax.
For everyday Texans, the property tax is a huge strain. It’s not just about owning a home—it’s about being able to keep it. Homeowners in Texas are seeing their property values skyrocket, so their property taxes rise yearly. For renters, it’s no better. Landlords pass down the cost of property taxes through rent hikes, squeezing out those who can barely make ends meet.
Small businesses are struggling, too.
While Texas might be friendly to large corporations, small businesses—especially local restaurants and retailers—feel the pinch of rising property taxes. As the Texas Restaurant Association pointed out in its testimony, most restaurants operate on razor-thin margins, and escalating property values and taxes could quickly put them out of business.
These small businesses are the backbone of Texas’ local economies, yet they’re disproportionately affected by a tax system pushing them to their financial limits.
While large corporations may have the resources to weather rising taxes, small businesses don’t have that luxury. Many face a choice between raising prices on customers, cutting staff, or closing their doors entirely.
So yes, while conservatives may flock to Texas for the low business taxes and lack of income tax, what they’re not talking about is who pays for the state’s public services, roads, and schools. It’s not the big corporations or the wealthiest Texans making millions off Texas’ corporate-friendly environment. The everyday homeowners, small businesses, and consumers are footing the bill.
As property taxes increase, schools are expected to receive more money, but in reality, the funding formula hasn’t kept pace with Texas students’ needs.
The state’s strategy of property tax compression—where the state offsets local taxes with state funds—hasn’t fixed the fundamental problem of underfunded schools. It simply shifts the burden without addressing the root causes.
When appraisals are inflated or lag behind actual market conditions, it leads to shortfalls, leaving districts unable to keep up with increasing costs, like higher salaries, new technology, or critical repairs. This disconnect between state assumptions and local realities perpetuates the cycle of underfunded schools and overtaxed homeowners.
The Texas Association of Appraisal Districts Legislative Committee spoke about this in their testimony.
To truly address the property tax crisis in Texas, the conversation has to include sustainable solutions for funding public education. The homestead exemptions and tax cuts that lawmakers tout as relief might help individual homeowners, but they come at a steep cost to school districts that are already struggling.
Without substantial changes to how Texas funds its schools—whether through new revenue streams, increased state contributions, or more equitable distribution of funds—property tax relief will continue to be a temporary fix to a much larger issue.
What are the legislators supposed to do?
I wish I had the answer to that. However, something has to change. Republicans will continue their same old, tired approach, fixing nothing.
“Insanity is doing the same thing over and over again and expecting different results.”
-Albert Einstein
The Texas Association of School Boards (TASB) and other education advocates have proposed several solutions to address the chronic underfunding of Texas schools. Here are some of the key recommendations:
Increase the basic allotment.
Use surplus funds for education.
Close the special education funding gap.
Revise the property tax formula.
Cap and balance property tax appraisals.
After 30 years of Republican control, we are seeing the long-term effects of their policies: high property taxes and underfunded schools.
Despite their promises of prosperity and a business-friendly environment, the reality is that their tax policies have burdened everyday Texans while leaving our public education system to flounder.
As the Texas House hearing showed, the core of the state’s tax problem isn’t just about rates—it’s about priorities. Republicans have chosen to shield corporations and the wealthiest residents from paying their fair share, shifting the burden onto middle-class homeowners, renters, and small businesses. Meanwhile, Texas schools continue to suffer from chronic underfunding.
Republicans have had three decades to fix this, and instead, they’ve consistently undercut public education and shifted financial burdens onto local governments and residents.
The notion that Republicans are better for Texas economically is a myth. Their refusal to adequately fund public education or provide real tax relief for ordinary Texans has left us in a precarious situation. The sooner Texans recognize this reality, the better. That’s why it’s time for a change, and we need to vote blue up and down the ballot. Only then can we start moving toward a Texas where schools are fully funded, property taxes are fair, and everyone—businesses and individuals alike—pays their fair share. It’s time to demand better.
Vote early, vote often, just vote.
October 7: Last day to register to vote.
October 21: First day to early vote.
October 25: Last day to apply for a mail-in ballot.
November 1: Last day to early vote.
November 5: Election day!
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I think the MAGAS will kick the can down the road concerning public education because their ultimate goal is to privatize education with a white nationalist Christian agenda using vouchers.
And they wanna pass vouchers!