The Texas House seemed to have the final say in the on-going property tax relief debate after House Speaker Dade Phelan quickly rejected the Senate’s new proposal, Senate Bill 1 on Tuesday evening.
By saying no to the Senate approach backed by Lt. Gov. Dan Patrick, and abruptly adjourning right after voting unanimous approval for its own version, the House has backed the Senate into a corner.
Because the House can’t meet again for this special session after its adjournment, either the Senate accepts the House version or there will be no property tax bill action this legislative session.
Under the House version, the state would use the $12.3 billion it set aside for property tax cuts to lower the taxes paid to the public school districts not only for homeowners but also for businesses with commercial property and owners of rental properties. Perhaps naturally, this approach had more widespread appeal among various groups across the state.
Earlier Tuesday afternoon, the Senate had passed SB 1, a measure that would lower school district property taxes to reduce property taxes – tax rate compression – and increase the current homestead exemption from $60,000 to $100,000.
According to Senator Paul Bettencourt (R-Houston), who authored the bill, homeowners could see $1,246 in savings in year one and $1,292 savings in year two. Those who are older than 65 or disabled could see more savings, as their exemption would be higher.
Although this new measure did include a tax rate compression — a recommendation of how to provide property tax relief from Governor Greg Abbott included in his special session announcement – it remained in line with Lieutenant Governor Dan Patrick’s priority of increasing the homestead exemption.
Which Abbott had not mentioned as part of his suggestion to address property tax relief.
When the Senate’s legislation was sent to the House, Phelan quickly rejected SB 1 and SJR 1 on the basis that it was not in line with what Abbott had asked.
Abbott released a statement following the House’s vote:
“The Texas House is the only chamber that passed a property tax cut bill that is germane to the special session that I called to provide Texans with property tax relief. It provides more cuts to property tax rates than any other proposal at this time. It is supported by the most respected tax think tank in the state, as well as more than 30 homeowner, consumer and business groups across the state. I look forward to signing it when it reaches my desk.”
Issuing his own statement, Lieutenant Governor Dan Patrick made it clear that although the House backed the Senate up against a wall to accept their plan for property tax relief – he is not ready to go down without a fight.
Patrick issued this statement in response to the House’s vote on Tuesday evening, reminding lawmakers that their bill still has to go through both chambers to be sent to the Governor’s desk:
Governor Abbott released a statement this evening where he said, “The Texas House is the only chamber that passed a property tax cut bill that is germane to the special session that I called to provide Texans with property tax relief.
He seems misinformed about the roles of the executive and legislative branches of government. While the Governor has the sole authority to call the Legislature into Session, the Legislature writes the bills – the courts have been crystal clear on this.
Governor Abbott has finally shown his cards. He chooses to give homeowners 50 percent less of a tax cut, nearly $700 a year, to give corporations more. This is not what homeowners expected when they voted for him.
Both the House and Senate spend $17.6 for property tax relief. After giving lower tax rates to everyone through compression the Senate plan dedicates nearly $6 billion for homestead exemptions. That gives homeowners nearly $700 more than the Abbott plan. I’m shocked Governor Abbott is advocating for taking that additional $700 savings from homeowners and giving it to businesses.
I stand by our bill. It is germane to the call – legal precedent is clear on this point. Something Governor Abbott and Speaker Phelan should remember – for any bill to pass, it must go through both the House and the Senate.
While the House may have thrown in the towel, the Senate continues to work. The Governor should feel free to expand the call to include other critical issues for our State.
Ahead of the House and Senate convening for their first meetings of the recently announced special session, Lieutenant Governor Dan Patrick called out House Speaker Dade Phelan’s actions which he said contributed to the lack of agreement on property tax relief.
Patrick doubled down on the House as a whole, criticizing the chamber for their points of order, that eventually killed many of the priority bills this legislative session, he said during a press conference and post-legislative presentation held on Tuesday morning.
Phelan’s unwillingness to drop the appraisal cap reduction – with his most recent proposal including an 8 percent appraisal cap on all properties – kept them from negotiating a finalized plan, according to Patrick.
According to Patrick, Phelan threatened to take homestead exemptions off the table if the lieutenant governor did not agree with the 8 percent appraisal cap.
“We didn’t want to go to appraisal caps because it would’ve destroyed what we accomplished,” he said.
The lieutenant governor accused Phelan of not letting go of reducing the state's appraisal cap because it would be beneficial to his investment firm, during the press conference.
Patrick said what is needed to give Texas home and business owners property tax relief is a combination of tax rate compression – or cutting property taxes by reducing a school district's maximum maintenance and operation tax rates – and homestead exemptions.
Governor Greg Abbott suggested tax rate compression as the "best way" to provide property tax relief in his statement announcing the special session.
Although the lieutenant governor supported Abbott’s recommendation, he said it wouldn’t work on its own without homestead exemptions included.
“Anyone who says – and forgive me I don’t want to offend anyone – but anyone who says we can eliminate property taxes by compression, ran for governor and didn’t win.”
According to Patrick, a new property tax relief proposal could be passed in the Senate as early as Tuesday.
When asked, Patrick said he was not worried about Abbott signing off on homestead exemptions; but instead concerned about the House passing it.
However, Patrick said he expects House members to approve any legislation with homestead exemptions, as their revised version of Senate Bill 3 passed with unanimous support for increasing them.
The lieutenant governor also called out what he said was Phelan’s overall lack of communication and claimed that a text message he received from the house speaker to come over to discuss property tax was the first time he had spoken with Phelan in about two years.
Patrick said this wasn’t just an issue for him, but also for Attorney General Ken Paxton – who Patrick mentioned he had spoken with weeks before the House impeached the AG on May 27 – as Phelan had not returned any of the attorney general's calls.
According to Patrick, Phelan also never showed up to any of the meetings he held with Abbott to discuss the power grid.
“This should be easy, it's three Republican leaders," he said. "It should be easy, I shouldn’t need to take Tylenol three times a day."
Patrick didn't stop his criticism with Phelan, as he turned his attention to representatives, more specifically the Democrats of the chamber – who he said had “total control” of the House. He claimed the way the rules are set up in the House allows for the “minority to kill bills they don’t like” and included that if these rules do not change the Texas Legislature will be in the same situation “forever.”
According to Patrick, this year's regular legislative session might have been the "hardest" session the Texas Legislature has ever had.