Houston has left $2.9 billion in property tax revenue uncollected since 2015 — $379 million this year alone — and is using regressive fees to fill the gap instead.
Structural
The key facts
$2.9B
Cumulative property tax revenue forgone since the rate first hit the voter cap in 2015 (Finance Director's own number)
$379M
Property tax revenue forgone in FY27 alone — larger than the entire new fee package + remaining deficit combined
$26M
What 1 penny on the property tax rate generates in annual revenue (Finance workshop, May 12). 2026 estimate is $26–28M.
$20M
How much the FY27 budget collects below the cap — about ¾ of a penny left on the table
What this means for your household
The cap caps growth, it does not cap the rate. Houston has cut its property tax rate nearly 20% since 2015 — a deliberate choice, not a forced one.
By holding the rate flat AND adding $130M+ in regressive fees, the Mayor is making a policy choice about who pays — not a forced choice about whether to raise revenue.
Property tax scales with home value (a more progressive way to raise money). Utility fees and trash fees hit everyone proportionally regardless of income.
The Chronicle Editorial Board called this ‘disingenuous’ — calling out the cap as a limitation while also choosing to keep the rate well below it.
“
We can't say that it's a challenge for us and then at the same time don't meet the max of the cap.
— Council Member Edward Pollard, the ‘penny challenge’ — BFA Committee (May 6)
What you can do
1
Ask the penny challenge yourself
Why are we leaving $20M of available cap room on the table while imposing $130M in regressive fees? Your council member should have an answer.
2
Understand your own bill
On a $320,000 home with homestead exemption, one penny on the property tax rate adds ≈ $26/yr. Compare to $60/yr in new trash fees plus utility pass-throughs.
3
Push for honesty in framing
If ‘no property tax increase’ requires regressive fees that hit low-income households harder, voters deserve to know that's the tradeoff.
Sources: BFA May 6 hearing; Finance workshop May 12; Chronicle Editorial Board May 10; Baker Institute property tax brief.