One of the real benefits of presenting to many diverse groups is the ideas that result from questions and comments provided by members of the audience. While one of us (Henson) was giving a presentation at the Texas Community College Teachers Association last week, a professor asked about renters’ awareness of the impact that property taxes have on their own rents. While an answer to the question wasn’t immediately available, when we looked at some of the cross tabs for questions that were asked during the 2023 legislative session’s tax cutting debate, we did find some interesting, if indirect, hints about renters’ views of property taxes and their impact. We’ve included a couple of examples below, and will certainly be looking at renters’ views a bit more closely as the property tax discussion unfolds in the current legislature.

With promises of property tax reduction front and center as the 88th legislature picked up steam in February of 2023, the University of Texas/Texas Politics Project poll asked Texas voters to evaluate the impact of each of the main state taxes on their personal finances. The results augured well for legislative champions of property tax cuts (and for Gov. Abbott, who had made big promises on the issue, and made those cuts an emergency item for the 88th): the plurality (47%) said that property taxes have the largest impact on their personal finances, followed at some distance by two taxes unlikely to be decreased, the sales tax (21%) and the motor fuels tax (i.e. the tax on gasoline) (18%). 

A quick look at the results by party finds both Republicans and Democrats attributing the largest impact to property taxes, 59% and 40%, respectively, though with a larger share of Democrats than Republicans citing the sales tax, 28% compared to 13%. One can speculate on the degree to which different factors, e.g. the class composition of the parties in Texas and the role of elite signalling from elected leaders, drive these partisan differences — but those differences are large, and likely the result of real differences in experience, and in turn, sentiment.

Thinking about the question that spurred a deeper look at the data, the responses among homeowners and renters reveals a much more striking difference than even the partisan one. Among homeowners, 59% cited property tax as the most impactful tax, compared to only 16% of renters. Larger shares of renters ranked both the sales tax (38%) and the gas tax (24%) as having the greatest impact on their household finances.

Tax that has the biggest impact on your personal finances  (February 2023 University of Texas/Texas Politics Project Poll)
	Homeowners	Renters
Property Tax	59%	16%
Sales Tax	15%	38%
Motor Fuels (Gasoline) Tax	15%	24%
Business Margins Tax	2%	5%
Taxes on Alcohol and Tobacco	2%	3%
Don't know	7%	13%

Before asking voters to think about which tax has the greatest impact on their finances, the poll invited respondents to consider whether each of the individual taxes had a major, minor, or no impact on their personal finances. The results, broadly speaking, seem somewhat consistent with the perception that helped pique our interest, in that one could argue that renters don’t appear likely to have property taxes in mind as a direct input on their rent in the same way that homeowners directly consider property taxes on their own housing costs, though most are not totally indifferent.

The plurality of renters, 42%, said that property taxes had no impact on their finances. But renters don’t appear to be completely oblivious either: a majority, 58%, said that property taxes had either a major impact on their finances (34%), or at least a minor impact (24%). Twice as many homeowners as renters, 68%, said property taxes had a major impact on their finances, with only 10% feeling no impact at all.

Impact of each tax on your personal finances  (February 2023 University of Texas/Texas Politics Project Poll)
	Property Taxes		Sales Taxes
	Homeowners	Renters	Homeowners	Renters
Major Impact	68%	34%	38%	48%
Minor Impact	22%	24%	48%	38%
No Impact	10%	42%	14%	14%

By comparison, a near majority of renters (48%) said that the state’s sales tax had a major impact on their personal finances, with another 38% saying that the sales tax has a minor impact — a perfect mirror of the view of homeowners, among whom 38% say that sale’s taxes have a major impact on their finances, but with an additional 48% saying that they have a minor impact. 

So while it’s clear that homeowners feel the brunt of property taxes more directly than do renters, which we should expect; and while it’s also clear that a large share of renters don’t make any connection between property taxes and their own financial well-being, there are still many renters who make a connection, even if the perceived impact is less than that of taxes on everyday purchases.

As this session’s property tax debate takes shape in the wake of Gov. Abbott’s call for $10 billion more in property tax cuts, we’ll have plenty of occasion to return to looking at how voters respond to that debate. The Senate’s focus on increasing the homestead exemption as the major mechanism of property tax reduction necessarily limits the impact that those cuts can have on renters given the targeting of the cut to a Texans’ primary place of residence (i.e. not a “rent property”, duplex, multiplex, or apartment complex). With rents falling in many parts of Texas, it would be hard not to imagine elected officials and statewide leaders taking credit for those reductions, and pointing to property tax cuts enacted over the last several years as the cause — even if it’s unlikely that those cuts made anything but an indirect impact on most of those rents, and even if there are other available explanations.