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Bill

HB 246

Relating to the abolition of ad valorem taxes and the creation of a joint interim committee on the abolition of those taxes.

89th Legislature, 2nd Called Session (2025) Introduced by Sergio Muñoz

Bill establishes committee to study eliminating Texas property taxes, creating $60B+ annual funding gap requiring alternative revenue sources and constitutional changes.

Referred to Ways & Means
#interimstudies(i0448) #lieutenantgovernor(s0096) #speakerofthehouse(s0306) #taxation--general(i0815) #taxation--property-miscellaneous(i0797) #taxation--property-taxrate(i0794) #taxation--sales(i0800)
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Bill Summary · HB 246

Legislative bill overview

HB 246 proposes the abolition of ad valorem taxes (property taxes) in Texas and establishes a joint interim committee to study how such an abolition could be implemented. The bill creates a legislative mechanism to explore eliminating this primary funding source for schools, local governments, and other services.

Why is this important

Ad valorem taxes generate approximately $60+ billion annually for Texas schools, counties, cities, and special districts. Eliminating them without replacement mechanisms would create a massive fiscal crisis for local government operations, public education funding, and essential services. This bill signals interest in fundamental tax restructuring that could reshape how Texas funds critical infrastructure and institutions.

Potential points of contention

  • Funding gap: No identified replacement revenue source is mentioned; abolishing ad valorem taxes without alternatives would devastate school districts and local governments that depend on this revenue
  • Local control: Property taxes fund services citizens vote on locally; elimination could shift power to state-level funding decisions and reduce municipal autonomy
  • Implementation complexity: Converting to alternative tax systems (sales tax increases, income tax, etc.) would require constitutional amendments and massive legislative overhaul across multiple bills
  • Unequal impact: Low-income homeowners and renters could face different tax burdens depending on what replaces property taxes

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

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