Texas, Florida Governors Push Aggressive Property Tax Overhauls

Republican governors are elevating property tax cuts as an affordability fix before the midterm elections, proposing to unwind how local governments are funded and testing red states’ ability to ease rising housing costs.

Florida Gov. Ron DeSantis is expected to call lawmakers back for a special session to revisit proposals to amend the state constitution and reduce or eventually eliminate property taxes on homesteaded properties, though lawmakers failed to advance a measure during the regular session earlier this year.

In Texas, Gov. Greg Abbott last year floated proposals to further lower homestead appraisal caps and require two-thirds of voters’ approval for some local property tax increases, but no legislation has been filed because the Texas legislature is not scheduled to convene until January 2027 absent a special session.

The aggressive push comes as rising housing costs reshape politics across the country. With Congress focused on boosting supply and making housing more affordable, Republican governors in Sun Belt states are viewing property taxes as another pressure point for homeowners frustrated by rising home values and monthly costs.

But the drive to shrink or eliminate property taxes is colliding with fiscal reality: Property taxes remain a large and stable funding source for local governments, and neither Florida nor Texas has explained how to offset the loss.

“To replace that revenue, you are looking, at the end of the day, at a tax swap of some sort,” Nicole Fox, a policy analyst at Tax Foundation, said. “The biggest missing piece is how to pay for it.”

Roughly a dozen governors have discussed some form of property tax elimination in recent years, Fox said, though none has enacted it.

The efforts go considerably further than property tax debates unfolding in other Republican-led states, where lawmakers have generally focused on slowing the growth of tax bills rather than pursuing the kind of large-scale reductions being discussed in Florida and Texas.

“I find the similarities between the two states to be much more significant than the differences,” Adam Langley, associate director of tax policy at the Lincoln Institute of Land Policy, said. “They’re focused on eliminating roughly half of the total property tax burden on owner-occupied homes.”

Political Appeal

Homeowners absorbing higher tax bills tied to escalating home values following the post-pandemic housing boom have made the proposals a potent issue.

Property tax increases are a growing frustration for homeowners dealing with higher insurance costs and housing prices. Nationally, housing prices have risen by more than 50% since 2020, while property tax revenues increased at roughly half that pace and track broader inflation, according to Langley and research from the Lincoln Institute.

Approximately 70% of local government revenue nationwide comes from property taxes. Schools alone often account for roughly half of homeowners’ tax bills.

But tax policy researchers say the broader political backlash has outpaced the underlying growth in local tax collections.

In Florida, lawmakers spent much of this year debating whether to expand homestead exemptions, tighten annual assessment growth caps, or pursue broader changes to local tax structures. Senate Republicans ultimately declined to advance the House’s more aggressive property tax proposals during the regular session, positioning DeSantis to shape the debate’s next phase. DeSantis spokesperson Molly Best declined to comment on the plan, only saying to “stay tuned.”

“All eyes are on the governor,” H. French Brown IV, a Florida tax attorney at Jones Walker LLP said.

Florida officials have warned that eliminating property taxes could destabilize city budgets that rely on the revenue to fund police departments, infrastructure, and emergency services.

“This fiscal year our general fund totals $212.5 million, and nearly half of it comes from property taxes,” said Jolien Caraballo, vice mayor of Port St. Lucie, in a statement. “Operating our Police Department is approximately $95 million this year, meaning the majority of the property taxes we collect are dedicated to keeping Port St. Lucie residents safe.”

Abbott, meanwhile, has tried to frame his proposal as a way to constrain local spending growth rather than dismantling the system.

“Texans are demanding real property tax relief, and Governor Abbott is committed to delivering it,” Abbott spokesperson Eduardo Leal said in a statement.

Abir Mandal, a senior policy analyst at the Tax Foundation, said parts of Abbott’s proposal might be more workable than Desantis’ because he’s focused on slowing future revenue growth rather than outright repeal. Still, he said, “I don’t think either plan is viable.”

Tax policy researchers across the ideological spectrum say the further states move toward eliminating property taxes, the harder it becomes to avoid major tradeoffs elsewhere in the tax code.

Other Republican-led states have moved toward slower-growth models instead of elimination.

In Iowa, lawmakers approved roughly $4 billion in property tax cuts paired with limits on how quickly local governments can grow revenue collections. Analysts describe the approach as a levy cap designed to slow future growth in property tax bills.

Fiscal Reality

The challenge is that property taxes remain one of the more stable and predictable ways for local governments to raise revenue, even if they are politically unpopular.

“Property taxes are very efficient, despite the bad rap they get,” Mandal said.

Langley warned that replacing property taxes with higher sales taxes would likely create more volatile and less equitable revenue systems, particularly in states such as Florida and Texas that already lack personal income taxes.

Research from the Tax Foundation found that fully replacing property taxes in Florida could push combined sales tax rates statewide above 15%. In some cases, the rates could climb far higher because they lack the retail and tourism base needed to replace that revenue through sales taxes alone. The group estimated rates could rise above 32% in largely agricultural Glades County and approach 20% in Palm Beach and Nassau counties.

Large-scale cuts could also weaken local governments’ financial standing and raise borrowing costs for infrastructure projects, Caraballo said. “The loss of property tax revenue would also impair our ability to meet annual debt obligations, weakening our bond and credit ratings and driving up the cost of borrowing for critical infrastructure,” she said.

Even so, the political appeal of property tax relief likely won’t disappear anytime soon, analysts said.

“That first state that decides to become the national experiment—good luck,” Fox said.