Property Taxes Up Again in 2024 Despite Promises of Tax Relief in 2023

Local Texas Property Tax Revenue Up $6 billion Over Last Two Years

New data shows that there was no $18 billion Texas property tax cut in 2023. Instead, property taxes increased for the second straight year and are up $6 billion since 2022 despite claims of property tax relief from Texas politicians.

Figure 1, using data recently released by the Texas Comptroller, shows the total property tax levy for 2024 increased by $5.4 billion in 2024, up 6.6% over 2023. All four types of local taxing entities increased property tax revenue in 2024. Counties saw the highest growth over 2023, with a 10.4% increase. Schools were also up 6.4%, special districts increased 6.1%, and cities were up 3.9%.

In 2023, the Texas Legislature adopted what many politicians called “the largest property tax cut in Texas history--$18 billion.” While many property owners did receive a tax cut in 2023, overall property taxes increased by $654 million. And for many property owners, 2024’s $5.4 billion hike wiped out whatever savings they may have experienced in 2023.

Why the 2023 Property Tax Cut Did Not Work

The Texas Legislature’s 2023 “largest tax cut in history” did not work for the same reason all the Legislature’s efforts since 1997 to provide “tax relief” have failed: Texas politicians have refused to control state and local spending.

Figure 2 shows the growth of Texas local property tax and state spending since 1997. While population growth and inflation are behind some of the increase, the rapid growth nonetheless indicates that the Texas Legislature has largely failed to stop the growth of spending and taxes.

Figure 1 reinforces this perspective in that since 2018 property taxes in Texas, which support local spending, have increased $23.6 billion, from $63.2 billion to $86.8 billion, an average of $3.9 billion a year. Yet this does not tell the entire story. During this time, the Texas Legislature has spent an additional $8.7 billion on government schools to buy down property taxes (plus an additional $14.3 billion to maintain the buydowns). Adding this money shows that spending by local entities—that is usually paid for by property taxes—has increased by $32.3 billion since 2018, an average annual increase of $5.4 billion, or 7.1%.

This level of spending growth is imposing a huge burden on taxpayers, yet the Legislature refuses to control it. Which is why none of the property tax efforts since 1997 have worked. The state spends more on schools while schools, cities, counties, and special purpose districts continue to increase spending and raise property taxes. Taxpayers are the losers.

Property tax “relief” has also failed because the Texas Legislature will not control state spending growth, leaving less money to buy down property taxes. In 2018, state spending totaled $140.3 billion. By 2023, spending had grown to $198.9 billion. And it will be worse in 2024 and 2025 because of the unprecedented 40% increase in session over session spending of state funds by the Texas Legislature in 2023.

We can see the effects the rapid growth of state spending has had on the ability of the state to reduce property taxes. In 2023, the Texas Legislature had about $65 billion in surplus funds above 2021 appropriations. Yet it dedicated only $12.7 billion of that to property tax relief. The rest all went to pay for new spending.

Conclusion

The only reason Texas has a property tax problem is because Texas has a spending problem—at both the state and local level. The only solution to Texas’ property tax problem is simple, though not easy: stop spending growth.