Every tax proposal involves weighing trade-offs between easing burdens on taxpayers and maintaining the services communities depend on. Propositions 13 and 9 stand out because they recognize that delicate balancing act. Each is carefully designed to provide tangible benefits for homeowners and businesses while safeguarding the funding that keeps local schools and other public services strong.
In Texas, property taxes are collected entirely by local governments, including school districts, cities, and counties, rather than the state. These local taxes fund essential services such as public education, emergency services, and infrastructure. Because rates are set by local jurisdictions, the property tax burden can vary widely across the state. Initiatives like Propositions 13 and 9 are important for taxpayers as they provide targeted relief while working within this decentralized system.
Proposition 13 would increase the homestead exemption for school district property taxes from $100,000 to $140,000, reducing taxable home values and offering direct relief to homeowners. The state government has already committed to reimbursing school districts for the revenue lost due to this higher exemption, which ensures local schools will continue receiving the critical funding they need.
This measure would provide homeowners with much needed relief after years of property tax increases. From 1998 to 2023, total property tax levies in the state grew from $20.8 billion to an eye-watering $80.4 billion. These rising bills have strained household budgets across the Lone Star State. A recent poll by the University of Texas found that 68% of Texans now say that property taxes have a “major impact” on their finances, a 10% increase over the last two years.
Meanwhile, Proposition 9 targets the business side of property taxation, authorizing a $125,000 exemption for tangible personal property that is used for the production of income, such as business inventory and equipment. This measure offers significant relief to small businesses and entrepreneurs. In Texas, businesses already stump up roughly 60% of all state and local taxes, compared with a national average of 44%.
The economic benefits of this measure will be significant. Lowering the amount of property subject to taxation will allow businesses to use that extra disposable income to reinvest more into their operations and employees, supporting growth and job creation. The National Federation of Independent Business estimates Proposition 9 would save small businesses over $500 million annually if approved by voters.
Propositions 13 and 9 address key pillars of the state’s property tax system, and each is designed with fiscal responsibility and sound governance in mind. Proposition 13 protects school funding by reimbursing districts for lost revenue, while Proposition 9 limits relief solely to income-producing property. Rather than being expensive carveouts, these measures are carefully crafted reforms that ease the burden on taxpayers without jeopardizing public services.
While these initiatives provide meaningful relief for homeowners and businesses, it’s important to recognize that they do shift some costs to other taxpayers, including renters and owners of non-exempt property. In other words, while the benefits are clear and immediate for certain property owners, other segments of the tax base may see relatively higher burdens as a result. This highlights the importance of considering broader, long-term reforms that can provide more balanced relief for all taxpayers.
Permanent Maintenance and Operations (M&O) rate compression would reduce tax rates across the board, ensuring that all property owners—whether they own a home, a business, or other taxable property—share in the benefits of a more efficient and predictable property tax system. Such reforms would provide lasting relief without disproportionately shifting costs from one group of taxpayers to another.
Propositions 13 and 9 provide Texans with meaningful, targeted tax relief while preserving funding for local public schools. These measures demonstrate that thoughtful, fiscally responsible policies can ease the burden on homeowners and businesses without compromising local services communities depend on.