As Texas governor, Don Huffines says he’ll kill property taxes. Why that’s not so easy

Don Huffines, the former Dallas state senator running a pugnacious primary campaign against Republican Gov. Greg Abbott, offers a few straightforward slogans.

One will grab homeowners’ attention as their annual bills come due when campaign season peaks: eliminate property taxes.

Not slow the rate of growth. Not cut rates. Do away with them entirely.

“Texans are tired of renting their homes from the government,” Huffines said in a recent interview. He predicted that freeing businesses from property taxes would lead to an economic boom as they invested in more jobs, research and development.

Huffines’ plan would have the state replacing school property tax revenue. Other local governments would get funding through sales tax and smaller revenue streams.

He says it’ll take 10 years to phase in, with full state funding of public education as the first major step. He pledges no government would see less funding under his plan.

“We’re not trying to shortchange any political subdivision from current revenue,” Huffines said. “We’ll gradually wean them off property tax and replace the revenue.”

GOT $62 BILLION?

The scope of the task is breathtaking: There are more than 4,100 local governments in Texas. In 2019, they collected $62.3 billion in property taxes — nearly as much as state taxes and local sales taxes combined. Huffines would eliminate that while still putting a strict cap on state spending. Somehow.

A primer on Texas government funding: Cities can levy both sales and property taxes, along with collecting various fees. Counties rely almost entirely on property tax. School districts have seen the state provide a slightly bigger share of their funding in recent years, but they are heavily dependent on property tax. School taxes make up the biggest portion of a property owner’s bill.

The state government primarily runs on sales tax, along with oil and gas revenues. Texas has no state income tax, and that won’t change anytime soon, if ever.

So, eliminating or reducing property taxes means a massive increase in sales taxes. The current rate in most of Texas is 8.25 percent, the legal maximum. Huffines said the precise rate for his plan would be determined later, but he scoffed at the idea that it could be around 20%.

Maybe not. But sales tax would probably double, at least. Ready to pay that on appliances, clothes, furniture — basically everything you buy except for food and drugs?

Give Huffines credit for this: He’s explicit about his belief that sales taxes are a more honest levy.

“It’s more equitable. You don’t pay it unless” you buy something, he said. “Property tax, you have to pay whether you have the money or not. Businesses have to pay it whether they make money or not.”

LOCAL CONTROL, RECESSION RISK

But he glosses over other complications. If the state fully funds schools, how much would locally elected boards control? Huffines says the money would come to districts as a flexible block grant, but future legislatures would be tempted to dictate spending.

Also, sales taxes are especially sensitive to economic downturn. When unemployment rises, people spend less, and the state has seen wild budget swings after recessions.

Taking on an incumbent with strong approval ratings in his own party is a longshot. Abbott has won statewide office seven times, and he never lets a challenger get to his right. For Huffines to have any chance, he has to move boldly.

Huffines refreshingly acknowledges that he doesn’t have all the answers, that the Legislature and the voters should have a say. He’s setting a broad goal. And he’s far from the first candidate to campaign on math that doesn’t quite add up.

But when he suggests that eliminating a top funding source for thousands of governments in a growing state is easy, a matter of political will that can be done without major budget cuts or painful tradeoffs, Huffines contributes to the cynicism plaguing our politics.

Governing is hard. When voters are promised a smooth path, only to see a plan fail or come with a big downside, it’s harder to rally support for difficult choices.

Texans are paying too much in property tax, one of the highest rates in the nation, as Huffines notes. But dozens of school districts have asked their voters in recent years to approve higher tax rates, and nearly all were successful, including Fort Worth and Arlington.

A better path would be to propose meaningful reform to the property appraisal process or a long-term, steady stream of funding for schools.

But those don’t fit on a billboard quite as well as “Eliminate property taxes.”