A relief package to help homeowners facing “increasingly burdensome” property taxes is now headed to the governor’s desk after months of negotiations.
The rapid passage of the legislation comes shortly after Speaker Dade Phelan (R-Beaumont) and Lt. Gov. Dan Patrick announced they had reached an agreement on the issue following a long stalemate, as reported by The Dallas Express.
Gov. Greg Abbott said in a statement provided to The Dallas Express, “I made a promise to Texans during my campaign that the State of Texas would use at least $13.5 billion from our historic budget surplus to provide substantial relief to property taxpayers across Texas.”
“Today, we will deliver even more with over $18 billion in property tax cuts,” he said. “The Texas House and Senate fulfilled our promise with an agreement that delivers a comprehensive, long-lasting solution to increasingly burdensome property tax bills.”
“I thank my partners in the Texas Legislature for coming together to honor the best interests of hardworking Texans who want to own their property — not rent it from the government,” Abbott continued. “I look forward to signing this legislation into law to provide Texans with the largest property tax cut in Texas history.”
Similarly, Lt. Gov. Patrick, who scored many of his legislative aims with the compromise bills, explained the significance of the moment in a statement received by The Dallas Express.
“I have been fighting for property tax relief at the Texas Capitol since 2003, 4 years before I was elected to the Senate, and I have not stopped since then,” Patrick said. “When I took office as Lt. Governor in 2015, the homestead exemption was $15,000, and my goal was to increase it to $100,000.”
“In 2015, we increased it to $25,000. In 2021, we increased it to $40,000. This session, our record budget surplus gave us the opportunity to increase the homestead exemption to $100,000,” Patrick detailed.
In total, the property tax relief package constituted two bills and a constitutional amendment joint resolution.
Senate Bill 2, the keystone legislative item, increases the homestead tax exemption to a $100,000 base, with homeowners over the age of 65 receiving a $110,000 exemption. Furthermore, it also allocates billions to the compression of school maintenance and property taxes.
Patrick called SB 2 “the largest property tax cut in Texas history, and likely the world.”
He explained, “The average home value in Texas is $330,000, and a homeowner living in that home will receive a yearly permanent tax cut of $1,250 to $1,450 as long as they live in a homestead property.”
“Over the life of a typical 25-year mortgage, homeowners could save between $25,000 and $30,000,” he added.
Senate Bill 3 should reduce the tax burden for businesses, increasing the economic potential of entrepreneurs.
“During the regular session, I also prioritized giving relief to small and mid-sized businesses,” Patrick said.
“Senate Bill 3 increases the threshold before small businesses are required to pay and file franchise taxes. 67,000 small businesses will no longer be burdened by the franchise tax all together so our businesses can continue to grow jobs and power the Texas economy forward,” he said.
However, the major elements of property tax relief laid out in the bill will only go into effect if Texas voters approve the changes through a constitutional amendment that will be placed on the ballot this November through House Joint Resolution 2.
After passing the resolution, Lt. Gov. Patrick explained in a statement sent to The Dallas Express, “House Joint Resolution 2 authorizes a constitutional amendment election in November to allow for the provisions of Senate Bill 2 to be implemented.”
“The impact of the $100,000 homestead exemption and the school district tax rate compression will be retroactive for the 2023 tax year to make sure Texans get maximum relief this year,” he said. “Texans should take note of the November 7, 2023, constitutional amendment election date so they can vote in favor of this historic tax relief and several other key measures for the future of our state.”
However, not all were satisfied with the arrangement brokered by Patrick and Phelan, and numerous amendments were sought in the House.
From the Democrat side, local Rep. John Bryant (D-Dallas) unsuccessfully sought to incorporate elements of his tax relief plan through amendments.
Afterward, Bryant criticized the House leadership, “As soon as folks started to realize that their tax plan leaves renters, teachers and public schools in the dust, Republicans began rushing their plan through the legislative process as quickly as possible to stifle debate and avoid the political backlash.”
“Tax relief in Texas is not just about property taxes. You and your neighbors pay taxes lots of different ways, including in your sales tax. Any plan that does not include renters, teachers and improved public school funding should be a complete non-starter,” he continued.
“My plan offers rental relief, increased teacher pay, permanent school funding solutions, AND DOUBLE the homestead exemption for property owners. It’s all paid for by the surplus,” the veteran legislator claimed.
Several notable Republicans also voiced their discontent with the deal reached by Speaker Phelan.
Rep. Brian Harrison (R-Midlothian) introduced an amendment that would help lead to the eventual abolition of property taxes.
“Proud to file this amendment,” he said. We must end property taxes in Texas. We must start now.”
Harrison’s amendment, however, was defeated by a point of order sustained by Speaker Phelan.