The honest answer
Why not just cancel property taxes?
The problem with property taxes as they are
Property taxes are owed every year whether or not a homeowner's income rises. As appraisals climb, families on fixed incomes can be taxed out of homes they have already paid for, and renters pay the same bill indirectly through higher rents.
City and county M&O taxes fund day-to-day operations — police, fire, streets, parks — so they tend to rise with local budgets year after year.
Why you can't simply eliminate them
M&O property taxes pay for essential local services. Abolishing them overnight would leave cities and counties with a hole in their budgets and no dependable way to fill it.
Replacing them with something new and untested would trade one problem for another: services, bond ratings, and local budgets all depend on revenue that is predictable.
What the Bill does instead
Chapter 325A replaces M&O property taxes step by step, only as certified replacement revenue from economic activity actually arrives. Cities and counties must lower their M&O rates as that revenue is certified.
Stabilization reserves, a fixed equalization formula, and a 100% cap on replacement keep local services funded while the burden shifts from property ownership to the growing Texas economy.