Texas Property Tax Relief Bill Goes Through Legislative Assembly

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With renewed support from Gov. Greg Abbott, legislation to lower property tax rates is on a fast track through the Texas legislature.

Republican lawmakers, including Abbott, have come under pressure from the party’s right flank to target the state’s high property taxes. Donors highlighted the $ 19 billion in federal stimulus money that has been set aside for Texas public schools and a nearly $ 8 billion surplus sat in state coffers as an opportunity for the state to grant temporary relief from property taxes.

“The obvious is that when you have surplus funds, you should give some back to the taxpayers,” said State Senator Paul Bettencourt, Republican of Houston and author of the property tax legislation.

Lawmakers are swiftly passing a $ 2 billion tax cut bill that aims to reduce the tax bill for an average Texas homeowner by about $ 200. The measure was passed by the state Senate by a 30: 1 vote on Wednesday afternoon, hours after Abbott added property tax relief to his list of items lawmakers would like to see state must tackle at the third extraordinary session of this year.

Bettencourt’s bill is now heading to the House, where President Dade Phelan has signaled an ardor broach the subject.

Property tax reform has long been a favorite topic for Texas Republicans. But even though Abbott has included relief on the agendas of previous special sessions, it has gone under the radar as conservative social issues, the pandemic, the Texas power grid, and the GOP’s vote bill drew attention.

A version of Bettencourt’s bill was presented to the House in the previous legislative session – but lawmakers ran out of time to consider it.

Abbott’s renewed interest in property tax relief comes as he faces a March primary that tests his goodwill with the right wing of the party. Don Huffines, a former state senator defying Abbott, poked the governor for initially leaving property tax cuts off the agenda for the third special session.

Prior to Abbott’s move, Lt. Gov. Dan Patrick seemed poised to advance property tax relief with or without Abbott’s blessing. In a session primarily called for lawmakers to fulfill a 10-year requirement to redraw the state’s political maps using the latest census data, Patrick said legislation reducing property taxes was his top priority. .

“This represents a quantum shift in the way we think about spending excess dollars,” Patrick said last week. “Tax relief must come before new spending. “

When Abbott joined Patrick in prioritizing property tax cuts this week, he said it was “crucial to improving the quality of life for all Texans.”

Tax relief for landowners joins a to-do list for Texas lawmakers this session – which includes redistribution, whether COVID-19 vaccines can be mandated, and figuring out how to spend $ 16 billion in federal stimulus dollars to help the state bounce back from the COVID-19 pandemic.

Also on the list: restrictions on which sports teams transgender student athletes can join, another priority for Patrick. Patrick had called on Abbott to force lawmakers to address the issue in a special session after it failed in the regular session.

“Patrick acts as the political identity of Abbott, the reflective political part of the governor’s brain driven by instincts for political survival,” said Brandon Rottinghaus, professor of political science at the University of Houston. “When Abbott is worried about the base, he listens to Patrick.”

But unlike some of the red meat issues dear to social conservatives, lowering property taxes is very appealing, political analysts have said.

“I think they address the important and intense concerns of average taxpayers,” said Matt Mackowiak, chairman of the Travis County Republican Party. “And I think it would be difficult to go through one regular session and three special sessions without the property taxes being addressed in a meaningful way.”

The primary means of property tax relief during this session is Senate Bill 1 – written by Bettencourt, Patrick’s chief lieutenant on property taxes.

Under the bill, the state would use $ 2 billion in public funds to replace public education funding that would otherwise be collected through a school property tax, the bulk of a homeowner’s tax bill. School districts are expected to lower their tax rates in the 2022-2023 school year.

For a homeowner whose property is worth $ 300,000, the median value of a home in Texas, which translates into a temporary tax break of $ 200 next year, according to the Bettencourt office, although tax rates school district land tenure may vary.

“This is a fantastic bill for property taxpayers of all types, whether they are where people work, where they sleep… it will help everyone,” Bettencourt said Wednesday in the Senate.

If the Texas economy grows sufficiently by June, total state revenues used to offset property taxes could reach $ 4 billion. In this case, the median homeowner would see at least $ 300 in tax savings.

But even some Senate Republicans who voted for the bill have expressed concerns. Consumers regaining confidence in the economy have bolstered state revenues and helped put an additional $ 8 billion in the piggy bank, state senator Charles Perry said at a Senate committee hearing finance Tuesday – but who knows how long this will last?

“I’m really worried we’re spending money that we don’t have,” Perry said.

Others feared that the tax break was not enough. Texas landowners pay some of the highest tax rates in the country – a byproduct of public schools’ reliance on property taxes for funding and the absence of income tax from the state.

Giving homeowners tax relief one year so that taxes go up again the next year is a tough sell, State Senator Robert Nichols, R-Jacksonville said.

“I think we’re all in favor of lower taxes… but for me to go back and just say to people, ‘well, it’s only temporary, probably, maybe we don’t really know. , we’ll have to wait and see, ‘I don’t like giving lectures like that,’ Nichols said. “I would much prefer to have a permanent solution.”

Texas lawmakers have cut school property tax rates over the past two years. House Bill 3, the landmark $ 11.6 billion school funding bill, included $ 5.1 billion in tax cuts in addition to $ 6.5 billion in new spending. The bill caps school district tax rates – caps that would become stricter under SB 1.

“We have no plan to replace this property tax revenue,” said Chandra Kring Villanueva, program director for the left-wing Every Texan party, formerly the Center for Public Policy Priorities. “Thus, each year, the state must assume an increasing percentage of the funding of schools. But none of those dollars benefit the class.

Bettencourt dismissed these concerns.

“Certainly by any measure, this kind of dramatic increase in funding for the public school system leaves me with no understanding of how people are underfunded at this point,” Bettencourt said.

Disclosure: Center for Public Policy Priorities, Every Texan, and University of Houston financially supported The Texas Tribune, a nonprofit, non-partisan news organization funded in part by donations from members, foundations, and corporate sponsors. Financial support plays no role in the journalism of the Tribune. Find a full list of them here.

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