The Texas Senate passed a new $12.7 billion property tax relief proposal on Tuesday that would provide tax cuts to home and commercial property owners – shortly after, Lieutenant Governor Dan Patrick called on the House to reconvene to consider the legislation.
Senate Bill 26, filed by Senator Paul Bettencourt (R-Houston), would raise the homestead exemption, send state dollars to school districts to cut their tax rates and increase the franchise tax exception to include more businesses. Lastly, it would put tighter revenue caps on school districts, to decrease tax rates.
This measure increases the cost of new property tax relief from $12.3 to $12.7 billion – a $400 million difference compared to earlier proposals. This totals to about $18 billion allotted for reducing property taxes, not the $17.6 billion that was initially set aside.
However, the state’s budget can handle the additional expense without issue and the new plan incorporates the “best parts” of what was discussed during a meeting of House and Senate negotiators this past weekend, Patrick said during a press conference he held on Tuesday.
According to Bettencourt, this is the largest property tax relief bill in Texas history and saves an average homeowner an estimated $1,270, and $1,450 for a homeowner who is older than 65 or disabled.
This new proposal comes after Governor Greg Abbott called for a compromise to be struck between both legislative chambers prior to the Sunday signing deadline. Patrick said they were close – but ultimately did not come to an agreement within this timeline.
Abbott had initially suggested that property tax relief should be provided by tax compression only – sending state dollars to school districts to cut their tax rates. Phelan took the governor’s advice and passed a House proposal that included compression only.
This put the Senate in a bind, as the House then immediately adjourned for the remainder of the special session and left the senators to either approve of this legislation or consider not acting on property tax relief altogether – as they maintained wanting a raise to the homestead exemption.
There is a chance that a compromise may still be reached between both chambers; however, a spokeswoman from Abbott’s office reaffirmed that Abbott had said the best way to deliver property tax cuts is through tax compression only.
The lieutenant governor has said that although House Speaker Dade Phelan gaveled out “Sine Die”, the House could find a way around this adjournment to return and review this new bill.
Patrick said that they still have about a week more until this special session expires, to resolve this ongoing debate.
Although the House has not indicated whether it’s coming back, Phelan took to twitter to announce a new House committee, the Sustainable Property Tax Relief Committee. This legislative body will be chaired by representative Morgan Meyer (R-University Park) and vice chaired by representative Shawn Thierry (D-Houston) and includes 11 other representatives and three public members.
If an agreement between the House and Senate is not reached this special session, Abbott said he will call another special session and however many are needed to reach a resolution on property tax relief – one of his legislative priorities during the regular session.
This article appears in Jan 1 – Dec 31, 2023.
