The Texas House of Representatives has passed a $12 billion proposal to reduce the state’s property taxes.
Republican lawmakers have remained committed to reducing the property tax burden in Texas, where property taxes are among the highest in the country.
House Bill 2, authored by Rep. Morgan Meyer (R-Dallas) and sponsored by House Speaker Dade Phelan (R-Beaumont), passed with a vote of 140-9, according to KVUE.
The bill still needs to pass another vote in the chamber before receiving final approval from the Senate, per KVUE.
The bill proposes to spend $12 billion on Texas school districts so that the districts will lower their property taxes on home and business owners, according to KVUE.
For homeowners with homes worth over $350,000, this would result in over $1,000 in savings, reported KVUE.
As part of this proposal, HB 2 lowers the home appraisal cap from 10% to 5%, meaning appraised home values can increase up to 5% a year. This would also apply to commercial property owners.
Senate Bill 3, a competing bill written by Sen. Paul Bettencourt (R-Houston), aims for property tax reform by increasing the homestead exemption, the amount a home value is exempt from property taxes.
The bill proposes to increase the homestead exemption from $40,000 to $70,000, according to KVUE.
This would save homeowners $664 per year on a $300,000 home. For comparison’s sake, Phelan said in March that his bill would save the owner of a $350,000 home $461 this year and $590 in 2025, reported the Austin American-Statesman.
Rep. Trey Martinez Fischer (D-San Antonio) pushed for an amendment to adopt the Senate’s proposed $70,000 homestead exemption while raising the proposed appraisal cap from 5% to 7.5%, a compromise between the competing House and Senate Bills, but the amendment was not approved, according to the Austin American-Statesman.
Lt. Gov. Dan Patrick, who presides over the Senate, has criticized the House bill, preferring the Senate alternative instead.
“There’s a handful of people who support lowering the appraisal caps, and the House Speaker is one of those and he’s sticking to it,” Patrick said, per KVUE.
“Every now and then, you kind of have to acknowledge – maybe you were wrong. I have. I came in as a senator who thought appraisal[s] were the answer. I learned they weren’t, and that’s why we designed what we designed,” he added.
“If you cut the appraisal cap now and under 5%, within two years, we’ll be up to 10% and your tax rates are actually going to go the opposite way,” Patrick said in March regarding the House proposal.
“I think the intentions of the House are good, but that would be a disaster and undo everything we’ve done that has brought this property tax relief,” he added, per the Austin American-Statesman.
Phelan countered the lieutenant governor’s position, claiming that lowering the appraisal cap was the best way to cut property taxes, according to The Texas Tribune.
Dallas saw a 63.8% increase in property taxes from 2016 to 2021 — the highest in the nation — as The Dallas Express recently reported.