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Ending School Property Taxes in Texas: The $8.6B Price Tag

At a September 15 hearing, the Comptroller's office told Texas lawmakers ending school property taxes on homesteads would cost $8.6 billion a year.

For three years Texas politicians have talked about getting rid of school property taxes without ever saying what it would cost. On September 15, 2026, in a nearly eight-hour hearing that drew almost no attention, the state finally put a number on school property tax elimination: about $8.6 billion a year — and rising to roughly $12 billion by 2032.

That figure came from the Texas Comptroller’s own office, told to the House Ways & Means Committee on the record. Nothing decided at that hearing changes your 2026 tax bill. But this is where the evidence for the 2027 legislative session gets built, and the numbers that surfaced complicate almost every relief plan now being floated.

The hearing that almost nobody watched

The House Committee on Ways & Means, chaired by Rep. Morgan Meyer, met at 10:00 a.m. on Tuesday, September 15, 2026, in Room E2.014 at the Capitol. According to the committee’s official minutes, it adjourned at 5:55 p.m. — just under eight hours on property taxes and local government finance.

Two things make that worth noticing.

First, per the Legislature’s own meeting record for the committee, this was its first posted meeting since August 22, 2025. The House’s tax-writing committee had not formally convened in more than a year.

Second, it was the one property-tax hearing this fall where an ordinary homeowner could speak. As we reported earlier this month, the Senate Finance Committee’s September 2 hearing — the only property-tax item on that committee’s interim calendar — was canceled, and the two Senate Local Government hearings that went ahead were noticed for invited testimony only. The Ways & Means hearing notice allowed public testimony, capped at two minutes per person.

Members recorded present: Meyer, Button, Capriglione, Gervin-Hawkins, Hickland, Noble, Perez, Troxclair, Turner and Vasut, with Martinez Fischer arriving later.

The number: $8.6 billion now, about $12 billion by 2032

The committee’s property-tax charge directed it to examine “methods to expand relief,” including school district tax rate compression and larger homestead exemptions. The concrete version on the table was eliminating school property taxes on homesteads while keeping schools funded.

Tetyana Melnyk of the Texas Comptroller’s office laid out the arithmetic, as reported by KXAN:

That last point is the one to hold onto. The cost of this promise is not fixed. It grows with the housing market, which means a replacement source has to grow with it too — or the gap gets filled later by something else.

Texas Education Agency Commissioner Mike Morath, who testified on the same charge, offered the understatement of the day: “School finance gets very complicated very quickly.”

What the governor has actually proposed — and what he hasn’t

News coverage of the hearing framed the elimination concept as Gov. Greg Abbott’s proposal. That framing deserves a caveat, because we could not confirm it in the governor’s own published materials.

Abbott’s most recent posted property-tax release, dated August 20, 2026, describes a five-part plan: empowering voters to roll back tax increases, local spending limits, “appraisal predictability,” a two-thirds voter approval threshold for tax increases, and curbing appraisal growth for all property owners. It does not name elimination, and it carries no dollar figures.

The governor’s More Prosperous Texas page likewise describes rate compression and a $140,000 homestead exemption — relief mechanics, not abolition.

So: a proposal to eliminate school property taxes on homesteads was examined at this hearing and is widely attributed to the governor, but the specific commitment does not appear in his office’s own posted plan. Read any “Abbott wants to eliminate your school taxes” headline with that in mind.

The replacement problem: a sales tax near 20 percent

The obvious follow-up question — if not property taxes, then what? — got an answer that has killed this idea before.

Testimony from the Texas Taxpayers and Research Association put the sales tax rate needed to replace property taxes at nearly 20 percent, according to ABC13’s account of the hearing. Texas currently levies a 6.25 percent state sales tax, with local add-ons capped at 2 percent for a maximum of 8.25 percent.

Not every member saw that as disqualifying. Rep. Cody Vasut, R-Angleton, was quoted as saying: “It seems to me that if we were to eliminate anything, we would eliminate a property tax, using a sales tax and not the other way around.”

Rep. Trey Martinez Fischer, D-San Antonio, pushed the opposite way, arguing surplus revenue should go back through the sales tax: “If sales tax is the workhorse for the state, when we have excess revenue, shouldn’t we be cutting the sales tax as a way to give thanks and show grace to the taxpayers that are giving so much to the state of Texas.”

Who already pays nothing — and why the state can’t say precisely

The most consequential thread of the hearing was also the murkiest. If exemptions have already removed a large share of homeowners from the school tax rolls, then another exemption increase delivers them nothing — it can only help the homeowners still paying.

Lawmakers at the September 15 hearing were told that roughly 1 in 10 homeowners under 65 pay no school property taxes, and about 1 in 3 homeowners aged 65 and older, per ABC13’s report.

Two weeks earlier, the Senate Local Government Committee — which carried an interim charge explicitly directing it to “identify the percentage of Texas homeowners that no longer pay school property taxes” — was reportedly told that 39 percent of the state’s 6.1 million homeowners paid $0 in school property taxes, according to Community Impact.

Those two accounts do not obviously reconcile. If roughly a tenth of under-65 homeowners and a third of senior homeowners owe nothing, the blended statewide share would land well below 39 percent on any plausible age mix. We could not resolve the difference against a published Comptroller dataset, and we are not asserting either figure as settled. Both come from press accounts of spoken testimony, not from a primary document.

That gap is itself the finding. The Legislature has spent more than $51 billion on property tax relief this budget cycle and has formally charged a committee with counting who no longer pays — and there is still no single authoritative public number a homeowner can check.

The renters nobody has an answer for

Rep. Vincent Perez, D-El Paso, raised the gap that every Texas relief plan runs into: renters do not receive homestead exemptions, and the savings landlords get are not reliably passed through. “There’s virtually no savings that’s passed onto tenants,” he said, per ABC13, tying it directly to the state’s affordability problem.

No mechanism for reaching renters was adopted at the hearing. It was raised as an open question for 2027.

The other three charges

Property tax relief was one of four items. The rest matter to homeowners too.

Two 2025 laws under review

The committee took testimony on implementation of two bills it wrote itself. Both are verified law:

Brent South of the Texas Association of Appraisal Districts and staff from the Comptroller’s office testified on HB 148 implementation; the Comptroller’s office and the Texas Public Policy Foundation testified on HB 103.

Certificates of obligation

The local government spending charge singled out certificates of obligation — debt local governments can issue without asking voters first, unlike the bond elections that drive the interest-and-sinking half of your school tax rate. We have covered how voter-approved school bonds hit your bill; certificates of obligation are the route that skips that vote.

The witness list on this charge shows the fault line clearly: the Texas Municipal League, the Conference of Urban Counties, the Texas Association of School Business Officials and the City of Galveston on one side of the table; the Texas Public Policy Foundation and Every Texan bringing competing analyses; and the Bond Review Board there with the state’s debt data.

Agency oversight

The fourth charge had the committee monitoring the Comptroller of Public Accounts and the Multistate Tax Commission for “fraud, waste, and abuse.” Comptroller staff testified.

Why the school line dominates your bill

All of this focuses on school taxes for a reason. On most Texas tax bills, the school district rate dwarfs the county rate. Here are 2025 adopted total rates from our audited dataset, drawn from the Texas Comptroller’s Tax Rates and Levies report:

CountyCounty rate (2025 adopted)A school district in that countyISD rate (2025 adopted)
Harris County$0.3810/$100Houston ISD$0.8783/$100
Travis County$0.3758/$100Austin ISD$0.9252/$100
Collin County$0.1493/$100Plano ISD$1.0395/$100
Bexar County$0.3000/$100San Antonio ISD$1.1552/$100

These are total adopted rates, combining maintenance and operations with debt service. The $8.6 billion figure covers only the homestead share of the M&O half statewide — which is why eliminating it would not zero out your school line. Bond debt would still be there.

What this means for your 2026 bill

Nothing. No vote was taken, no bill was filed, and no rate changed. The 2026 rates your taxing units adopted this fall are what you will pay.

What changed is the evidence base. Going into 2027, lawmakers now have a price tag on elimination, a replacement rate that is politically radioactive, an unresolved count of who still pays, and no answer for renters.

What to do next

What we could not verify

Sources

How to Protest Your Taxes → Find Your County

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