Texas lawmakers are facing the reality of the high costs associated with eliminating property taxes in the state. According to state budget officials, it would cost Texas $81.5 billion to completely eliminate all local property taxes. This figure includes $39.5 billion for school property taxes and another $42 billion for property taxes collected by cities, counties, and special taxing districts.
Lawmakers have been working to reduce property taxes in Texas, with efforts resulting in a decrease in the amount of property taxes collected by school districts from 2022 to 2023. However, the idea of completely eliminating property taxes remains a challenge due to the significant impact it would have on the state budget and the potential need for a substantial sales tax hike.
The proposal to eliminate property taxes has been met with skepticism from some officials, who question how the state would make up for the lost revenue. Without an income tax, Texas relies heavily on sales taxes as a main source of government funding. A recent analysis found that Texas would need to more than double its sales tax rate to eliminate all property taxes.
Despite the challenges, top Republicans in the state have indicated that they are committed to continuing efforts to reduce property taxes. However, finding a balance between cutting taxes and maintaining critical government services remains a complex issue for Texas lawmakers.
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