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HB 3018

Relating to a study of alternative methods of taxation to replace revenue lost to political subdivisions if ad valorem taxes are abolished.

89th Legislature (2025) Introduced by Brent Money

Texas study bill examining alternative tax sources to replace property tax revenue for local governments if ad valorem taxes are abolished.

Referred to Ways & Means
#commissiontostudymeasurestoabolishadvaloremtaxes(v43uc) #comptrollerofpublicaccounts(v2608) #education--primary&secondary--finance(i0250) #governor(i0375) #interimstudies(i0448) #lieutenantgovernor(s0096) #legislature(i0520) #politicalsubdivisions(i0588) #speakerofthehouse(s0306) #stateagencies #boards&commissions--newlyproposed(i0773) #taxation--city(i0775) #taxation--county(i0780) #taxation--general(i0815) #taxation--property-miscellaneous(i0797) #taxation--schooldistrict(i0785)
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Bill Summary · HB 3018

Legislative bill overview

HB 3018 directs the state to conduct a comprehensive study examining alternative taxation methods that could replace revenue currently generated by ad valorem (property) taxes if those taxes were abolished at the local government level. The bill does not propose immediate tax changes but rather mandates research into viable alternatives such as sales taxes, income taxes, or other revenue sources to ensure political subdivisions maintain funding for operations.

Why is this important

Property taxes fund essential local services including schools, law enforcement, fire departments, and infrastructure maintenance. Any fundamental shift in how these services are financed would affect tax burdens across different income levels and could significantly impact local government operations statewide. This study could inform major future tax reform debates in Texas, where property tax relief has been a recurring legislative priority.

Potential points of contention

  • Implementation feasibility – Alternative tax sources may not generate equivalent revenue or may be economically disruptive; the study's conclusions could reveal significant funding gaps that are politically difficult to address
  • Distributional impacts – Different tax structures affect residents unequally; replacing property taxes with sales or income taxes could shift burdens between wealthy and lower-income households, renters versus homeowners, and urban versus rural areas
  • Local control concerns – Some argue that reducing reliance on local property taxes diminishes municipal autonomy and fiscal independence from state government

Compiled from official sources — confirm details with the bill’s official record.

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