The overview
Texas homeowners are taxed by local entities such as school districts, cities, counties, hospital districts and municipal utility districts. State lawmakers spend billions of dollars annually to reduce how much Texans pay school districts in property taxes, although Abbott noted June 11 that since the state does not levy property taxes, it also cannot make direct tax cuts.
“I know Texans are frustrated about what's going on. ... Local jurisdictions, in my opinion, have imposed too much property taxes on our fellow Texans,” Abbott said in an interview from his office at the state capitol in Austin.
In February, Abbott urged lawmakers to “stop making it so easy for local taxing jurisdictions to increase property taxes.” He said at the time that taxing entities should be required to receive two-thirds approval from local voters during a general election before they can raise taxes.
“That would lead to bona fide property tax cuts [and] lower property tax bills for our constituents,” Abbott said June 11. “That will be a keen focus of mine going forward.”
If a school district wants to boost its revenue by increasing the local maintenance and operations tax rate above a threshold set by the state, it must first hold a special election known as a voter-approval tax rate election, or VATRE. However, other government entities do not typically have to get voter approval before raising taxes.
Pointing to Harris County, which increased several local property tax rates in 2024, Abbott said “we just cannot allow that to occur anymore.” He noted that homeowners throughout the state may also see higher property tax bills as home values rise.
Zooming in
Lawmakers passed a $338 billion budget for the 2026-27 biennium, which begins this September. About $51 billion of that money, or 15% of the budget, will be used to maintain existing property tax relief and expand tax exemptions for homeowners and businesses.
In November, Texas voters will have the final say on three proposals to enact the new tax reductions and enshrine them in the Texas Constitution. Those ballot measures would:
- Raise school tax exemptions on all Texans’ homes to $140,000, up from $100,000 under current law
- Give homeowners who are over 65 years old or have a disability a $200,000 exemption from school taxes
- Exempt up to $125,000 of businesses’ personal property, such as equipment, furniture and vehicles, from taxation
Abbott said reining in local tax hikes is one of his top priorities and he intends to focus on the issue during his campaign for a fourth term as governor in 2026. He noted that each biennium, the state’s general revenue spending cannot grow more than “the estimated compounded growth of state population and monetary inflation,” per the Texas Legislative Budget Board.
“If that applied to every jurisdiction, that could hinder their ability [to raise property taxes],” Abbott told reporters.
The Texas Legislature meets for 140 days every two years, meaning lawmakers are not scheduled to return to Austin to debate property taxes and other issues until January 2027. Abbott can call lawmakers back for a special session at any time, though he said June 11 that he does not currently intend to do so.
“Right now, I haven't identified a need for a special session,” Abbott said. “I wouldn't do that until I get through all the bills [on my desk]. You'll see some more vetoes come up, I suspect, in the coming days. We'll need to take a look at what things look like after that.”
The governor has until June 22 to sign or veto hundreds of bills, and those that he takes no action on will automatically become law. As of June 9, Abbott had signed 308 of the 1,210 bills sent to his desk and vetoed two, according to the state Legislative Reference Library.
Put in perspective
While the tax relief package passed both legislative chambers with nearly unanimous support in May, some lawmakers expressed concerns that some homeowners would not reap the benefits.
In February, as state senators debated increasing the homestead exemption, Sen. Lois Kolkhorst, R-Brenham, urged her colleagues not to “take a victory lap today, because our work is really just beginning.”
Kolkhorst read a message from a constituent who said they believed the $100,000 homestead exemption passed in 2023 “was a wash.” The constituent’s appraisal district review board hiked their home’s appraised value by $71,000 last year, “completely wiping out the increased homestead exemption,” Kolkhorst said.
Kolkhorst, who represents a stretch of southeast Texas, from Grimes County outside of College Station to Aransas County along the coast, did not specify where this constituent lives.
On the House floor May 20, Rep. Terry Canales, D-Edinburg, said lawmakers need to “rein in the tax rates.”
“I think this [bill] is just a band-aid, and I'll take a band-aid when we're bleeding,” Canales said. “But the reality is, if we really want to help people, we've got to work on the rate at which people are getting taxed.”
One more thing
Abbott signed a bill May 28 that will tighten cities’ and counties’ ability to raise tax rates after natural disasters.
House Bill 30 will amend Section 26.042 of the state tax code, which was last adjusted in 2021 and allows cities and counties to utilize voter-approved tax rates after a state- or federally-declared disaster. Bill author Rep. Ellen Troxclair, R-Lakeway, said during an April 21 committee hearing that HB 30 will prevent “abuse” of disaster-related tax increases and “make sure... that taxpayers have accountability in what that money is really going toward.”
HB 30 will become law on Jan. 1.
