In Texas, the issue of rising property taxes often is the center of public policy conversations among residents and legislators alike — especially in rapidly growing urban areas like Austin. Jennifer Rabb, the President of the Texas Taxpayers and Research Association (TARA), finds herself at the center of these discussions as a leading voice on tax policy in Texas. 

Prior to her work with TARA, Rabb had a 15-year career as a tax lawyer including in roles in public policy. She was previously a fellow at the Baker Institute for Public Policy, a tax policy advisor to the Lieutenant Governor of Texas, clerk of the Texas House Ways and Means Committee and a policy director for the Texas Comptroller of Public Accounts. 

“I think what I bring to my role at TARA is both an appreciation of what the taxpayer experience is, as well as how things look on the policy side,” Rabb says. 

TARA, which represents over 200-member companies spanning various industries, focuses on promoting “tax policy that is sound economics and that supports a robust environment for business.” Rabb believes with Texas’s position as a growing economic powerhouse, discussions about taxes are crucial to understanding both the challenges and opportunities facing Texas today. 

The fundamental aspect of Texas’s tax structure that Rabb explains is that property taxes constitute about half of all state and local revenue. 

“Property tax is not a single tax,” she says. “It is a tax that is imposed by thousands of local jurisdictions in Texas.” 

Rabb believes the decentralized approach to taxing in Texas allows localities to cater to the needs of their communities, even if it results in varying tax rates across regions.

“An attribute of the system is that it allows those local jurisdictions to respond to the needs and wants of their local community.” 

Texas, which is often perceived as a low tax state due to the absence of personal income taxes, may not be that for all. 

“Overall, Texas is a high tax state for businesses,” says Rabb. She points out that while individual taxpayers may pay less, businesses face a heavier tax load, ranking Texas as the 14th highest state for total business taxes. 

For property owners, especially in major urban centers where home valuations have soared, Rabb acknowledges that taxation is not primarily driven by inflation and appraisals going up but by local governments budgets and spending decisions. 

“I think you should always expect your property taxes to go up a little bit because there’s always inflation,” Rabb says. “The driver of the increase in your tax bill is how much money your local government is spending.” 

In 2019, the Texas legislature sought to address rising local property taxes by implementing a cap of 3.5% on property tax increases without voter approval. “The devil is in the details,” Rabb says, suggesting that while the limits are in place, there are still challenges local governments and taxpayers face.

If local taxpayers want to see change in their property tax bills, Rabb says to “shift the focus to what kind of budget your local government is adopting and what tax rates they are proposing for you.” She believes, “property owners being engaged requires vigilance.” 

To foster this education and engagement, TARA developed a new online tool to help residents track and understand their property taxes better. 

“We want to help people better understand that it really isn’t about your appraisal, it’s about the tax rate,” she says. 

As Texas has kicked off its 89th legislative session, Rabb sees lots of opportunities to improve the property tax landscape in Texas. 

Rabb sees an imbalance between individual and business property taxpayers that could be addressed by the legislature, saying, “93% of business property is taxable and only 43% of homestead property is taxable.” 

She advocated for greater research and development (R&D) incentives to attract innovative businesses to Texas and compete with other states and nations that have much higher R&D tax incentives. “We would like to see a tax credit for R&D,” Rabb says.

Rabb would like to see less legislative focus on appraisals. “Appraisal caps do not lower property taxes overall. They just shift the burden among taxpayers.” 

And, maybe most importantly, Rabb encouraged taxpayers to participate in the legislative and governing process. “It requires some civic engagement,” she says.