By\u00a0Joshua Fechter\r\nDALLAS \u2014 As Texas\u2019 exploding real estate market dramatically drives up home values, homeowners are getting sticker shock after receiving notice of their properties\u2019 new appraised values \u2014 which help determine how much they pay in property taxes.\r\nThe growth rate of home values in the state\u2019s major metropolitan areas has surged by double digits. In Harris County, the state\u2019s most populous county, residential values have risen\u00a0between 15% and 30%, according to Roland Altinger, the county\u2019s chief appraiser.\r\nIn Bexar County, the median value of a home appreciated nearly 25% to $265,540.\r\nAnd in Travis County, where the state\u2019s housing crunch has been most apparent, the median home value has skyrocketed \u2014 climbing more than 50% since last year to $632,208.\r\n\u201cWe have never seen anything like this,\u201d said Marya Crigler, chief appraiser at the Travis County Appraisal District. \u201cThis is unprecedented for us in Travis County. And I think that same unprecedented appreciation is being seen statewide.\u201d\r\nBut an increase in value doesn\u2019t necessarily guarantee a dramatically larger tax bill, appraisers and property tax experts caution.\r\n\u201cMany factors complicate how property taxes are calculated,\u201d said Adam Perdue, a research economist at the Texas Real Estate Research Center at Texas A&M University.\r\n\r\n\r\n\r\n\r\nIt\u2019s likely that at least some local governments will have to cut their property tax rates in order to fall in line with recent state laws meant to slow property tax growth. And the state\u2019s top elected officials are already making new promises to bring down Texans\u2019 property tax bills. But recent laws haven\u2019t stopped property tax growth altogether.\r\nProperty tax collections have risen more than 20% since 2017, according to data from the Texas comptroller\u2019s office. Texans paid an estimated $73.2 billion in property taxes in 2021, which went to school districts, cities, counties and other taxing entities that then use the revenue to fund everything from public schools and police departments to road maintenance.\r\nFacing reelection, Gov.\u00a0Greg Abbott\u00a0has deemed property tax reduction a top priority when state lawmakers reconvene next year.\r\n"One of my top goals this coming session is to reduce property tax substantially, and that will reduce the cost of doing business," Abbott said during a March event for the U.S. Chamber of Commerce in Austin. "It will also reduce the cost of living."\r\nDemocratic opponent Beto O\u2019Rourke, a former El Paso congressman, sees an opportunity to lay the blame for the state\u2019s rampant growth in property taxes at Abbott\u2019s feet. In a new line of attack, O\u2019Rourke has pointed out that the amount of property taxes paid by property owners has grown by more than $20 billion since Abbott took office in 2015. (Abbott\u2019s campaign has said the Legislature has spent $18 billion since 2015 to limit how much school property taxes grow.)\r\n\u201cHe (Abbott) is the single greatest driver of inflation in the state of Texas, and it's causing real pain to our fellow Texans right now,\u201d O\u2019Rourke said at a Wednesday press conference in southern Dallas.\r\nHere\u2019s a quick primer on how Texas got here:\r\nWhy are property taxes in Texas so high?\r\nTexas\u2019 local governments rely heavily on property taxes to pay\u00a0the salaries of police officers and firefighters and for government services like roads, libraries, parks, and public schools. Coupled with the fact that Texas has no state income tax, Texans\u2019 property tax bills are among the highest in the nation.\r\nTexas homeowners pay a higher proportion of their home value toward property taxes\u00a0than most homeowners in other parts of the nation, according to the Tax Foundation. Texas depends more on property taxes than almost any other state to pay for government services \u2014 edged out only by\u00a0New Hampshire, Alaska, and New Jersey.\r\nIn no arena is that more apparent than in Texas\u2019 public schools \u2014 which depend greatly on property taxes for funding.\r\nSchool districts use local property tax revenue to cover as much of their base budgets as possible \u2014 then the state chips in the rest. Over time, that formula has often resulted in fewer state dollars paying for public education as local property values have grown.\r\nIn any given year, revenue from property taxes\u00a0makes up more than half of the state\u2019s pot of funds to pay for public schools, the rest of which comes from state and federal sources. Of the $69.3 billion that went to public education in fiscal year 2020, property taxes\u00a0kicked in $38.4 billion\u00a0while the state provided $23.3 billion. The rest came from federal funds.\r\nAs a result, school property taxes make up the bulk of a typical Texas homeowner\u2019s tax bill. More than half of all property tax revenue in the state comes from school property taxes, according to data from the Texas Comptroller\u2019s office.\r\n\u201cThe only way to really institute meaningful property tax reductions would either be to find some other revenue source or to substantially cut education budgets,\u201d said Dr. Charles Gilliland, a research economist who studies property taxes at the Texas Real Estate Research Center at Texas A&M University. \u201cNeither one of those options is palatable in today's political atmosphere, so that's how we got into this situation.\u201d\r\nHas anyone tried to fix this?\r\nTexas legislators have tried numerous ways to limit property tax growth.\r\nLawmakers have raised the state\u2019s homestead exemption \u2014 the portion of a homeowner\u2019s home value exempt from taxation \u2014 to $25,000.\r\nState law also limits the taxable value of a home from rising more than 10%\u00a0in a given year on an owner\u2019s primary residence. In Travis County, the median market value of a home grew nearly 54%. But the median taxable value of a home in Travis County\u00a0rose by about 11%\u00a0after also accounting for the construction of new homes just coming onto tax rolls for the first time.\r\nIn 2019, lawmakers passed a pair of laws aimed at slowing growth. House Bill 3 was an\u00a0$11.6 billion school finance bill that included $5.1 billion to lower school district taxes, $6.5 billion in new school spending, and caps on school districts\u2019 tax rates. Senate Bill 2 required many cities, counties, and other taxing units to get voter approval if they want to raise the property tax revenue they collect from all property owners by 3.5% or more than the previous year.\r\nAccording to a study by the Texas Taxpayers and Research Association, the bills worked \u2014 sort of.\u00a0The study says\u00a0Texas taxpayers would have shelled out $6 billion more in property taxes than they did in 2021 if not for the two bills \u2014 the result of falling tax rates.\r\nBut that doesn\u2019t mean everyone\u2019s paying less in taxes. School tax rates dropped by 13% since the bills passed in 2019, but taxable property values rose by 23%, according to the study.\r\n\u201cValues are still rising faster than school tax rates,\u201d said Dale Craymer, president of the Texas Taxpayers and Research Association. \u201cBut taxpayers now at least benefit as their values rise. They benefit from falling tax rates. That didn't happen before 2019.\u201d\r\nMeanwhile, ideas like making the sales prices of properties public \u2014 which advocates say would ensure properties aren\u2019t exorbitantly valued and that owners of expensive properties are paying their fair share of taxes \u2014 have gone nowhere.\r\nWhat\u2019s on the table now?\r\nWith campaign season comes new promises to cut property taxes.\r\nAbbott has touted a \u201ctaxpayer bill of rights\u201d that includes proposals to further reduce school property tax rates, make property appraisals more transparent, and limit local governments from taking on new debt without voter approval.\r\nOn Wednesday, O\u2019Rourke put forth a set of ideas to reduce Texans\u2019 property tax burden. That would include making sure that the state picks up 50% of the tab for public schools, expanding Medicaid to ease the property tax bill for publicly funded hospitals, plus legalizing marijuana and taxing its sale. He also floated the idea of legalizing casino gambling and sports betting as a way of generating more tax revenue.\r\nTexas voters will have the opportunity to cut their own taxes at the May ballot box. On the ballot is a measure to raise the state\u2019s homestead exemption from $25,000 to $40,000 for school district property taxes. The average homeowner would see about $176 in savings on their annual property tax bill, according to Republican state Sen.\u00a0Paul Bettencourt\u00a0of Houston, the proposal\u2019s author.\r\nMeanwhile, lawmakers in the state House and Senate are weighing ideas to use state and federal funds to cover some school expenses so that districts could lower property taxes. They\u2019re looking at a $12 billion surplus in state revenue along with $3 billion in federal stimulus dollars that Lt. Gov.\u00a0Dan Patrick\u00a0and House Speaker\u00a0Dade Phelan\u00a0set aside to pay for tax relief when the Legislature convenes in 2023.\r\nWhether state lawmakers will be able to use federal stimulus funds to pay for property tax cuts hasn\u2019t been settled. The $3 billion comes out of the American Rescue Plan Act, the $1.9 trillion stimulus bill aimed at pandemic relief, which prohibits the use of stimulus funds for tax cuts.\r\nTexas, joined by Louisiana and Mississippi, sued the federal government last year alleging that the prohibition is unconstitutional. A federal judge in Amarillo sided with Texas earlier this month, but the decision is likely to be appealed.\r\nOne idea that has gained momentum in Republican circles is the abolition of school districts\u2019 maintenance and operations tax, which Patrick instructed senators to look into this year.\r\nCraymer, the TTARA president, is dismissive of that.\r\n\u201cI don't think we're getting rid of the school M&O tax anytime soon,\u201d Craymer said. \u201cI don't think we're getting rid of the property tax anytime soon.\u201d\r\nOther ideas abound. During a Thursday meeting of the Texas House Ways & Means Committee, state Rep. Morgan Meyer, a Dallas Republican, asked the comptroller\u2019s office to look into what effect lowering the appraisal cap on residential taxable values and creating such a cap for commercial properties would have on tax revenue.\r\nBut lawmakers have left little room for themselves to maneuver on property taxes, observers have said. The state\u2019s lack of an income tax has long been a carrot to attract employers and new residents to Texas. And Texas voters won\u2019t allow one; in 2019, they voted to enshrine a ban on a state income tax in the state\u2019s constitution.\r\n\u201cTexas has kind of painted itself into a corner by now having a constitutional prohibition against what is a major source of funding for other states by concentrating on reducing property taxes, rather than expanding the people who pay their fair share,\u201d said Dick Lavine, senior fiscal analyst with the liberal-leaning Every Texan.\r\n\r\n\r\n\r\n\r\nThis story was originally published by the Texas Tribune.