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House Speaker Dustin Burrows (left) listens as Texas Governor Greg Abbott speaks during a 2025 bill signing event in Denton for legislation concerning property tax relief for Texans. Abbott has said he’d like to abolish school taxes for homeowners in Texas. Critics warn that the state could run out of surplus funds used to support schools in place of local property tax revenues.\u00a0<\/p>\n
Juan Figueroa\/Dallas Morning News<\/p>\n
From left, Sophia Abilez, Christianna Carrasquillo and Harper Shortridge work with their teacher Brittany Hughes at Royal Ridge Elementary School on Wednesday, April 15, 2026, in San Antonio. Hughes\u2019 classroom is part of NEISD\u2019s moonshot program teacher pipeline with a master teacher and teacher apprentices to learn from one another.<\/p>\n
Andrew J. Whitaker\/San Antonio Express-News<\/p>\n
With deadlines quickly approaching for Texans to protest their property value appraisals, school districts are starting to forecast how changing values will affect their budgets.<\/p>\n
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Texas schools are funded by two main pots of money. The state determines how much funding it takes to educate each district\u2019s students, accounting for special student needs like dyslexia services or career and technical education courses. <\/p>\n
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Each year, school districts levy a local property tax to raise money to pay for their budgets. Some districts with higher property values are able to fund their entire budget out of this local tax revenue. But districts with lower property tax values may still need more support to fill their coffers. That\u2019s where the state comes in\u00a0\u2014 kicking in funding to make districts whole.<\/p>\n
In recent years, lawmakers have required school districts to lower their property tax rates, which has increased the state\u2019s portion of public education funding. The two funding sources operate like a see-saw, with one side rising when the other side dips.<\/p>\n
But Gov. Greg Abbott and other\u00a0conservative lawmakers are now touting a proposal\u00a0to eliminate school property taxes for Texas homeowners with a homestead exemption<\/a>.\u00a0School taxes typically account for more than half of an average homeowner\u2019s annual tax bill, even if they have no children in the household.<\/p>\n Chief Appraiser Rogelio Sandoval, right, addresses the Bexar Appraisal District Board of Directors during a public meeting on Tuesday afternoon, Aug. 20, 2024, in downtown San Antonio, Texas. While a downturn in property appraisals has left city and county leaders concerned about budget cuts or a potential tax rate increase, school funding has shifted away from local property taxes in recent years.<\/p>\n Sam Owens\/San Antonio Express-News<\/p>\n Will a decline in local property values hurt local school districts?\u00a0<\/p>\n According to preliminary projections from the Bexar Central Appraisal District, local taxable property values will rise by $1.8 billion this year, or 0.7%, compared with 14.3% in 2023, 7.7% in 2024 and 5.1% in 2025. School districts aren\u2019t the only governmental entities that rely on local property taxes to fund their budgets. Bexar County officials are bracing for budget\u00a0cuts<\/a>, and the city is considering its first property tax rate hike<\/a> in 33 years.<\/p>\n Article continues below this ad<\/p>\n Last year, the Legislature budgeted $51 billion to pay for tax cuts for homeowners and businesses, including an increase in the standard homestead exemption from $100,000 to $140,000 and breaks for seniors and disabled homeowners. The money helped replace revenue that school districts would lose out on with a decrease in their property tax rolls.<\/p>\n It appears that the decline in local values will not hurt school districts in the short term. But some policy experts say the state won\u2019t be able to continue doling out tens of billions of dollars in the future for property tax relief, unless it finds new sources of revenue.\u00a0<\/p>\n Culebra Road flanks a subdivision outside Loop 1604 in 2021. Three census tracts in the far West Side, around Government Canyon, Culebra and Alamo Ranch, were the fastest-growing census tracts in Bexar County, adding to local property tax rolls.\u00a0\u00a0<\/p>\n William Luther\/Staff<\/p>\n Could school taxes be abolished?\u00a0<\/p>\n Abbott has proposed eliminating school property taxes for homeowners and using state budget surplus funds to support public schools. Texas voters would have to approve the change through a state constitutional amendment.<\/p>\n Article continues below this ad<\/p>\n The state projected the local share of public education funding\u00a0would be $31.4 billion\u00a0in 2026 and $31.8 billion in 2027. Those estimates include some tax revenue that\u00a0wouldn\u2019t necessarily be eliminated under Abbott\u2019s proposal\u00a0\u2014 but opponents argue slashing property taxes would still mean the state would have to take on billions more in education funding.<\/p>\n Critics have warned the state, which has no income tax and is reluctant to increase its sales tax, could run out of surplus funds in an economic slowdown.\u00a0Plus,\u00a0they say property tax relief doesn\u2019t help renters who make up nearly 40% of the state\u2019s population.<\/p>\n Texas Policy Research, a nonpartisan nonprofit organization headquartered in North Texas, has advocated that Texas school districts\u00a0use\u00a0state general revenue, rather than property taxes, to\u00a0fund day-to-day school maintenance and operations. Districts use a \u201cmaintenance and operation,\u201d or M&O, property tax to fund this part of their budget.<\/p>\n \u201cWith fiscal discipline, controlled spending, and responsible budgeting, the state could phase out the school\u00a0(maintenance and operation) tax entirely. Reducing or eliminating this tax would provide meaningful, broad-based property tax relief, unlike targeted exemptions that shift the burden onto those who do not qualify,\u201d the group said in an online explainer<\/a>.<\/p>\n Article continues below this ad<\/p>\n<\/p>\n
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