According to the Legislative Budget Board (LBB), HJR 88 is anticipated to have no fiscal implication for the State of Texas beyond the standard cost of placing a constitutional amendment on the statewide ballot. According to the Legislative Budget Board (LBB), the estimated cost for publication of the resolution is $191,689, which is a routine expenditure associated with constitutional amendments placed before voters.

The resolution itself would not result in a direct revenue loss or expenditure because it only provides the framework for local counties to opt into granting property tax exemptions for the value attributable to rainwater harvesting or graywater systems. It does not create an automatic or statewide exemption and thus does not impact the state’s tax base or collections directly.

Any fiscal impact that could occur—such as a potential reduction in local property tax revenues—would depend entirely on enabling legislation (notably, HB 1256) and whether individual counties choose to adopt the optional exemption. Therefore, local governments are not expected to face any fiscal impact solely from the passage of HJR 88. Future financial effects, if any, would need to be evaluated in the context of that subsequent legislation and local decision-making.

HJR 88 seeks to promote water conservation by authorizing counties to exempt from property taxation the portion of a property’s value attributed to the installation of rainwater harvesting or graywater systems. While the policy goal is well-meaning, the mechanism used—expanding property tax exemptions—raises several substantive concerns that justify a recommendation against the measure.

First, HJR 88 continues a trend of using the property tax code as a tool to incentivize specific behaviors. While this approach may be effective in some cases, it introduces unintended fiscal consequences. Each exemption chips away at the tax base, requiring local governments to increase rates or shift the burden to other taxpayers. This creates equity concerns, particularly for residents who cannot afford or do not have the ability to install such systems—such as renters, lower-income homeowners, or residents in high-density urban areas where these systems may be impractical. The result is an unequal distribution of tax burdens, where tax relief is granted to a subset of property owners at the expense of others.

Second, the proposed exemption represents a form of market distortion by using the tax system to influence private investment decisions. While the state has used similar strategies for renewable energy, the core principle of free enterprise is best supported when markets—not government preferences—determine which technologies thrive. Granting favored tax treatment to specific types of property improvements risks crowding out more comprehensive, technology-neutral approaches to conservation and infrastructure resilience.

Third, although the resolution is permissive—it allows but does not require counties to offer the exemption—it still introduces administrative complexity. Counties that choose to implement the exemption must evaluate eligibility, verify installation, and administer the carve-out, adding to their operational burden. Furthermore, discretionary implementation could result in an uneven landscape of taxation across counties, complicating statewide policy consistency and potentially leading to perceptions of unfairness among taxpayers.

In conclusion, while HJR 88 advances a commendable environmental goal, it does so through a policy mechanism that undermines core principles of tax neutrality, equity, and fiscal sustainability. Lawmakers and taxpayers alike should be cautious about further narrowing the property tax base, particularly when better-aligned tools are available to support conservation and infrastructure resilience. For these reasons, Texas Policy Research recommends that lawmakers vote NO on HJR 88.

• Individual Liberty: The resolution enhances individual liberty in a limited but meaningful way by giving property owners more autonomy over their improvements without being penalized with higher property taxes. If a person chooses to invest in water-saving systems, the bill creates a path for local governments to ensure they are not taxed for those improvements. While the exemption isn’t automatic, enabling counties to provide it reinforces a principle of choice and voluntary environmental stewardship. However, the liberty enhancement is not universal. Only those who can afford to make these upgrades will benefit. Those without the financial means or physical capacity to install such systems may feel excluded from this liberty-enhancing policy.
• Personal Responsibility: The bill indirectly supports personal responsibility by rewarding those who take proactive steps to conserve water—especially in drought-prone areas of Texas. It encourages property owners to manage their own water needs through decentralized, non-governmental means, aligning with the ethos of taking responsibility for one's resource use. This aligns with the principle that individuals—not the government—should lead in solving problems where feasible.
• Free Enterprise: The resolution introduces a market distortion by using the tax code to favor one type of improvement over others. This selective incentivization risks tipping the scales in favor of certain technologies or service providers (e.g., rainwater harvesting system vendors), which could deter innovation or competition from alternative solutions. True free enterprise favors a level playing field, and the bill’s carve-out—even if well-intentioned—can be seen as an artificial preference within the marketplace.
• Private Property Rights: On one hand, the bill respects and promotes private property rights by acknowledging that owners should not be penalized for making conservation-minded improvements. Allowing an exemption for part of the value created by installing water systems supports the principle that property enhancements aligned with the public good should not trigger additional tax burdens. On the other hand, by carving out one class of improvement for favorable treatment, the bill may inadvertently create inequity among property owners—especially those whose improvements are not similarly exempted. Over time, these distinctions may be seen as government intrusion into what should be neutral treatment of private property.
• Limited Government: Although the bill is permissive rather than prescriptive, it expands the role of government by introducing a new exemption class and authorizing the state to create eligibility criteria. This subtly increases government involvement in shaping local tax policy and incentivizing private behavior. It could also set a precedent for future exemptions, gradually undermining the principle that government should be restrained and tax policy should be broadly applied and minimally manipulated for policy purposes.

• HB 1256 (Enabled by)
• SJR 60 (Same As)