FOR IMMEDIATE RELEASE
Oct. 30, 2024
CONTACT: Nicole Hill, press@texasaft.org
Republican candidate who presumably hates California wants Texans to pay more in sales tax than Californians.
SAN ANTONIO, Texas – Last week, local candidate for Texas House District 121 Marc LaHood spoke with Texas Public Radio about a number of his extremist, out-of-touch policy positions, including on public education. LaHood’s support for private school voucher scams is no secret, and we will continue to condemn that attack on neighborhood schools where we see it. But LaHood has gone even further, repeating in both the TPR interview and a recent debate that Texas schools are not underfunded and could withstand the elimination of the property tax. This is a blatant lie, and it’s concerning to see someone with such a dismal grasp of the state budget and tax system running to have a say in those very policy areas.
If Texas were to eliminate the property tax, the state would be forced to compensate by increasing the sales tax from 6.25% to approximately 22% to replace $81.5 billion (Fiscal Year 2023 alone) in local property tax revenue. This would be by far the highest sales tax rate in the nation, far outpacing the current leader, California, at 7.25%. For context, a teacher spending on average $703 out of pocket on Texas school supplies for their classroom pays around $58 in sales tax at the current rate. At 22%, that extra expense jumps to roughly $155–and that’s an increase all Texas consumers will feel every time they go to the store.
“The simple truth is that eliminating the property tax would require a sales tax increase beyond the wildest dreams of even the most liberal California lawmaker. When Marc LaHood says Texas schools could survive a voucher scam or the elimination of property taxes, he is either lying or living in a fantasy world,” said Melina Espiritu-Azocar, president of Northside AFT. “Neither option is acceptable for the job he is currently seeking.”
“Educators are tasked with both the responsibility and the honor of teaching the next generation of young Texans. Unlike Marc LaHood, we don’t have the luxury of being short-sighted and reckless about the future,” said Tom Cummins, president of Bexar County AFT. “Laurel Swift is the only candidate in this race who will fight for HD-121 neighborhood schools.”
“Laurel Swift is the clear pro-public education choice in HD-121. The stakes of this election are so dire for our public schools that even the outgoing Republican incumbent, Steve Allison, has endorsed Swift over LaHood in this election,” said Alejandra Lopez, president of the San Antonio Alliance. “Marc LaHood is an existential threat to our neighborhood schools. If elected, he will sell out Texas public education to his billionaire privatizer friends, and our students and educators will pay the cost.”
Here’s the truth about eliminating the property tax:
Massive Sales Tax Increase Required
- When Texas lawmakers previously tried to use a sales tax swap just to lower–not fully eliminate–property taxes in 2019, analysis showed that it would increase net taxes on any household with an annual income less than $100,000 and shift the tax burden from corporations to consumers. A bipartisan group of lawmakers killed that proposal, fearing it would ultimately raise taxes on too many of their constituents. The 2019 legislation would have increased the state sales tax rate to 7.25%, far below the 22% rate needed to fully eliminate the property tax, by the state’s own estimation.
- Sales taxes are more volatile than property taxes; collections are highly sensitive to economic downturns. The COVID-19 pandemic clearly demonstrated the importance of stable funding sources.
- Higher sales tax would:
- Force families to pay significantly more for everyday necessities;
- Reduce consumer spending power, particularly for essential items;
- Put Texas businesses at a competitive disadvantage with neighboring states; and
- Create incentives for cross-border shopping and online purchases to avoid tax.
Threat to Education Funding Stability
- Schools would lose their most reliable and significant funding source. Currently, local property taxes provide crucial funding for:
- Employee compensation and benefits;
- Essential student programs and services;
- Classroom resources and materials; and
- Other operational expenses such as utilities.
- Greater reliance on state funding creates risks because:
- Sales tax revenue fluctuates significantly with economic conditions;
- State funding may not keep pace with enrollment growth and changing student needs due to evolving demographics (bilingual, special ed, etc.);
- Texas’s lack of state income tax means limited revenue sources; and
- Historical patterns show state funding often lags behind actual costs.
Impact on Essential Services
- Property taxes fund critical local services beyond education, such as emergency services (fire and police), infrastructure maintenance and improvement, public health services, parks and recreation, services like sewage and utilities, and public libraries.
- Eliminating this funding would force difficult choices between essential services, potentially reduce service quality and availability, create competition between schools and other services for state funds, and threaten local responsiveness to emergencies.
Bond and Debt Implications
- Districts have existing bond obligations that require stable funding – proponents of eliminating property taxes have presented no plan for how districts’ existing bond obligations would be met:
- Current bonds were issued based on property tax backing and long-term projections of property value growth.
- Legal obligations to bondholders must be met.
- Eliminating property taxes would complicate districts’ long-term facility planning and place them at the mercy of the state.
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The Texas American Federation of Teachers represents 66,000 teachers, paraprofessionals, support personnel, and higher-education employees across the state. Texas AFT is affiliated with the 1.7-million-member American Federation of Teachers and the AFL-CIO.