McALLEN, Texas (Border Report) — On the upcoming ballot, Texans will decide on a proposal that could lead to property tax exemptions for lands hosting border barriers. This measure, known as Proposition 17, seeks voter approval to modify Texas’ constitution, allowing landowners to avoid taxes on border structures erected by either state or federal authorities.

Proposition 17 is designed to amend the constitution, enabling the legislature to exempt the market value of real estate from ad valorem taxation. This applies specifically to properties along the Texas-Mexico border where security infrastructure has been installed or constructed.

The full text of Proposition 17 states: “The constitutional amendment to authorize the legislature to provide for an exemption from ad valorem taxation of the amount of the market value of real property located in a county that borders the United Mexican States that arises from the installation or construction on the property of border security infrastructure and related improvements.”

Should this proposition pass, it would ensure that property values remain unaffected by the presence of border barriers or enhancements within Texas’ border counties. This measure aims to prevent tax increases due to state or federal security infrastructure projects.

The Legislative Budget Board in Austin highlighted in a memo dated May 17 that this change would entitle landowners to a tax exemption equivalent to the appraised value of any improvements made under a qualified border security agreement. This exemption also applies to properties with easements granted to Texas or the United States for border security purposes.

While there may be potential implications for school district funding due to a reduction in taxable property value, the memo suggests that the financial impact should be minimal.

But it could result in higher taxes in cities and counties.

“If cities, counties, and special districts did not adopt higher rates, local levies would be reduced. If those jurisdictions adopted higher tax rates, the initial revenue loss from the exemption would be offset by increased tax levies from owners of non­exempt property and slightly reduced tax savings from owners of exempt property,” the memo says.

The Texas Comptroller of Public Accounts reports current border infrastructure construction projects throughout South Texas in the counties of Cameron, Starr, Zapata, Webb, Maverick, and Val Verde, which “could be subject to the exemption,” the Legislative Budget Board says.

The issue was first raised in Texas in early 2020 when South Dakota contractor Tommy Fisher, CEO of Fisher Sand & Gravel Company, built a $42 million private border wall on a sliver of land that had been owned by a Rio Grande Valley farmer in Mission, Texas. The border wall was mostly financed by Fisher but over $1 million came from funds crowdsourced through the controversial group We Build the Wall.

Questions, at the time, surfaced over whether the farm land would be taxed at a higher rate based on the $42 million structural improvement. However, Hidalgo County did not tax it.

The proposition is one of 17 on the statewide ballot.

On Wednesday, Texas Secretary of State Jane Nelson said during the first week of early voting, there had been 561,819 ballots cast in person and 23,510 votes by mail. 

Early voting began Oct. 20 and ends Friday. Election Day is Tuesday.

Sandra Sanchez can be reached at SSanchez@BorderReport.com.