According to the Legislative Budget Board (LBB), SB 974 is not expected to have any fiscal impact on the state government. The bill simply expands eligibility criteria for service on appraisal review boards (ARBs) by allowing public school teachers to participate. Since the bill does not mandate additional expenditures, create new programs, or require financial compensation for ARB members, no state budget adjustments are necessary.

Similarly, the LBB report states that there will be no fiscal impact on local governments. Appraisal districts, that oversee ARB operations, already have mechanisms in place for appointing and managing board members. The inclusion of teachers does not necessitate structural changes, additional staffing, or increased administrative costs. Additionally, appraisal review board members are typically unpaid or compensated with nominal stipends, meaning that the fiscal impact remains neutral for both the state and local taxing entities.

SB 974, while attempting to solve a legitimate administrative issue, namely, the shortage of qualified appraisal review board (ARB) members, ultimately introduces risks to the integrity of the property tax appraisal system that cannot be overlooked. Under current law, employees of taxing units are barred from serving on ARBs to preserve impartiality and avoid conflicts of interest. This bill creates an exception for public school teachers, allowing them to serve even though they are employed by one of the primary beneficiaries of property tax revenue.

The bill’s rationale is that teachers have availability during the summer, when most ARB hearings are held, and that they are not involved in tax rate or budget-setting decisions. However, this distinction does not sufficiently safeguard against either real or perceived conflicts of interest. Teachers, as employees of school districts, have a direct financial connection to the entity that receives funding from property taxes. Their inclusion on boards responsible for evaluating property values—values that directly influence local school funding—risks undermining public trust in the neutrality of the protest process.

From a liberty-based perspective, the bill raises significant concerns, particularly regarding private property rights and limited government. Property owners must have confidence that they can challenge valuations before a panel of impartial individuals. Allowing taxing unit employees to serve on ARBs threatens that assurance and may result in valuation decisions being influenced—consciously or not—by the interests of taxing entities. This erosion of trust harms the foundational principles of due process and fair treatment under the law.

Furthermore, the bill blurs boundaries that are crucial to maintaining a limited and accountable government. The prohibition on taxing unit employees serving on ARBs exists precisely to maintain a clear firewall between those who benefit from property tax revenue and those who adjudicate tax disputes. Weakening that firewall, even for practical staffing reasons, undermines safeguards designed to prevent undue government influence in taxation.

While the bill may improve administrative efficiency, that goal does not justify sacrificing long-established protections meant to ensure fairness in the property tax system. Absent meaningful amendments—such as requiring recusal for conflicts, mandating transparency, or creating procedural safeguards—the risks to taxpayer trust and property rights outweigh the intended benefits.

For these reasons, Texas Policy Research recommends that lawmakers vote NO on SB 974. The bill introduces unacceptable risks to the perceived and actual impartiality of ARBs, undermines key liberty principles, and compromises the integrity of the property tax protest process. The need for additional ARB members, while real, should be addressed without creating exceptions that weaken public protections and blur the lines between tax collectors and adjudicators.

• Individual Liberty: This principle defends a person's right to live freely under just laws that protect personal autonomy and due process. The bill nominally promotes civic inclusion by allowing more individuals, specifically teachers, to participate in public service. However, individual liberty is also tied to fair and impartial government systems, particularly in matters that affect taxation. If taxpayers lose trust that ARBs operate without bias, their liberty to challenge government overreach (in the form of inflated property valuations) is diminished. Thus, the bill risks weakening due process protections in the property tax appeals system.
• Personal Responsibility: Allowing teachers to serve on ARBs may encourage public employees to contribute more actively in local governance, which aligns with the value of personal responsibility. It creates an avenue for otherwise underrepresented professionals to step into public roles. However, this benefit is contingent on their ability to uphold impartiality, which the bill does not safeguard against with any structural provisions like recusals or conflict-of-interest disclosures. Without these, personal responsibility may be compromised in practice.
• Free Enterprise: Texas's economic vitality depends on predictable, fair taxation and the trust of business owners in property tax systems. The inclusion of school district employees on ARBs may erode that trust. If ARBs are perceived as partial to the interests of school districts—the very entities funded by the taxes they review—businesses may view the system as rigged or biased, particularly in high-stakes commercial valuation disputes. That perception can discourage investment and expansion, harming free enterprise.
• Private Property Rights: This bill most directly threatens private property rights, a foundational liberty principle in Texas. ARBs are the last line of defense for taxpayers seeking relief from what they believe are unfair appraisals. Having employees of taxing units, especially school districts, which rely heavily on property tax revenue, serve on those boards introduces an institutional conflict of interest, even if individual teachers are well-meaning. If property owners believe the board has even a perceived bias toward higher valuations, the process becomes suspect, and the protection of property rights is compromised.
• Limited Government: The current prohibition on taxing unit employees serving on ARBs is a structural check against government overreach. By lifting that restriction for one class of government employees, teachers, the bill expands the role and influence of government actors in a domain that directly governs taxation and private wealth. This sets a precedent that may gradually erode other boundaries between government beneficiaries and tax administration. Even if done with good intent, it moves Texas further from limited government and closer to a model where government insiders regulate and review each other’s interests.