Governor Greg Abbott highlighted his proposals for property tax relief and new regulations for data centers during a campaign rally in Lindale on Friday, October 23, 2026. Speaking at the Texas Music City Grill and Smokehouse, Abbott outlined a plan to eliminate school property taxes and ensure that data centers do not strain local resources or rely on taxpayer incentives.
Abbott, who is seeking re-election on November 3, stated his commitment to an affordability agenda for Texas, with property tax relief as a primary focus. He proposes a five-step plan designed to alleviate property taxes and enforce restraint on local governments. This plan includes limiting local government spending to curb property tax increases, requiring two-thirds voter approval for any property tax increase, allowing voters to petition for property tax rollbacks and vote to lower their own rates, changing property appraisals to occur once every five years, and increasing the yearly cap on appraisal increases to 3% from the current maximum of 100%. The cornerstone of his proposal is to eliminate school district property taxes by having the state fully fund all public education.
Currently, local property taxes contribute nearly half of all Texas public schools' revenue, as the state lacks an income tax. Local school districts use Maintenance and Operations (M&O) and Interest and Sinking (I&S) taxes to fund daily operations, salaries, and voter-approved bonds. Abbott stated that the state would make up the financial difference for public schools if property taxes were eliminated.
He estimates that his proposals could reduce the average homeowner's property tax bill by more than half, amounting to approximately $3,000 annually. Abbott said the necessary funds would come from several sources, including the state’s annual budget surplus, taxpayer relief funds (which he indicated would include approximately $1.8 billion from prohibiting financial benefits for data centers), a portion of the $7.5 billion in federal reimbursement for border-related expenses, the state’s Rainy Day Fund (Economic Stabilization Fund), and potential savings from proposed state budget cuts. He noted that the annual budget surplus currently exceeds the amount needed to fully eliminate homestead property taxes for public education.
During the rally, Abbott reiterated his opposition to both a state income tax and an inheritance tax. He also discussed actions taken regarding data centers, stating that he ordered a halt to final permits for data centers in Texas on September 21. This halt will remain in place until audits by the Electric Reliability Council of Texas (ERCOT) on the electric grid and water supplies are completed.
Abbott outlined new guidelines for data centers: they must bring their own power without increasing electrical bills, must not use local water that would drain community supplies, and must avoid building in rural areas or residential neighborhoods. He cited the shutdown of a planned large-scale AI data center by Diode Ventures near Cedar Creek Lake in Henderson County in July, which was projected to consume millions of gallons of lake water daily. Abbott emphasized that data centers must operate without taxpayer incentives and cover their own costs. He plans to codify these standards into law during the next legislative session.
Abbott was joined at the Lindale event by Sen. Bryan Hughes, Rep. Cole Hefner, and Rep. Daniel Alders. Hughes, who is campaigning for re-election to the Texas State Senate District 1 position, underscored the Republican platform of lower taxes, reduced cost of living, and job creation. Abbott is running against Democratic nominee Gina Hinojosa and Libertarian Pat Dixon in the November 3 General Election.
