Property Tax Alert: Texas

June 2006

Texas Governor Rick Perry on May 23 signed H.B. 2, which requires that additional state revenue from increases in specified taxes be placed in a property tax relief fund. H.B. 2 is part of the package of five bills passed in a special session devoted to the school finance reform mandated by the Texas Supreme Court. The governor previously signed H.B. 3, a bill that substantially revises the franchise tax, and is expected to sign the other three bills. In a press release on H.B. 2, the governor said that every new dollar generated by the reformed business tax, the increase in the cigarette tax (H.B. 5), and the amended motor vehicle sales tax (H.B. 4) will be dedicated to property tax relief. He indicated that after the school property tax rate is lowered to $1 per $100 of taxable value, two-thirds of the dedicated revenue will be used for further property tax relief, and one-third will be used for education.

Please contact Rash & Associates for more information.