The ink on the Texas Legislature’s $10 billion tax cut is not even dry and yet, local governments are already scheming to steal your tax cut.
It is happening now, and it is happening fast. For example, a recent article from Community Impact highlighted the adoption of Austin ISD’s 2025-2026 budget and included a link to materials that contained the image below. What the image reveals is how Austin ISD is masking a tax increase.
Based on the image above, absent State action, the average Austin resident would have seen a $53 tax hike this year, which comes on the heels of a monster $717 increase in the year prior. The proposed tax hike is the result of Austin ISD trustees preparing to adopt a tax rate (it won’t officially happen until September 2025) that is too high. However, as most Texans know, the 2025 Texas Legislature passed a $10 billion tax cut earlier this year, which is expected to provide the average Texan with a $484 tax cut. That is, so long as local governments, like Austin ISD, don’t eat into it.
When the homestead exemption increase is accounted for in Austin ISD’s tax bill calculations, the average taxpayer is no longer hit with a $53 tax increase but rather can be shown enjoying savings of $317. Thus, a tax increase has magically become a tax decrease.
Again, this is due to the Legislature’s recent actions which permit Austin ISD to raise taxes on the average person while making it appear as if it is really lowering the overall burden of government. All of this is very misleading, to say the least.
The truth is, Austin ISD is raising taxes and chipping away at tax cuts—before they’ve even been ratified in the November election. Whether the district wants to admit it or not, what’s driving this problem is an addiction to spending other people’s money. That’s obvious not only based on their finances and fiscal trajectory, but also based on the fact that Austin ISD has experienced severe enrollment decline for a long period of time, losing 12,000 students over the last 10 years alone. This factor should be prompting less spending and lighter taxes, not an increase in both.
This situation should not go unnoticed at the Texas Legislature. It makes little sense for state-level policymakers to cut taxes only for those actions to be immediately reversed at the local level by greedy governments. We need to fix this problem so that taxpayers actually enjoy the relief that they are promised.
One way to do this is by creating and applying local spending limits to all political subdivisions. If the Legislature can impose reasonable controls on local government spending, then the tax rate aspect begins to resolve itself in some ways.
Because, after all, government won’t levy a tax if they can’t spend the proceeds.