Excerpts from The Texas Tribune’s The Brief on Texas Politics and Policy
How to lower property taxes: House Speaker Dade Phelan and Lt. Gov. Dan Patrick are clashing over their dueling proposals about how to cut property taxes.
Patrick and the Senate want to raise the state’s homestead exemption — the portion of a home’s value that can’t be taxed — on school district property taxes, with an additional boost for seniors. Meanwhile, Phelan and the House want to tighten the state’s “appraisal cap” on how much the value of a homeowner’s main residence taxed by school districts can rise each year.
Both have doubled down on their proposals, and Patrick has said he will not compromise.
The homestead exemption proposal in the Senate would boost the amount of a home’s value that can’t be taxed by school districts from $40,000 to $70,000, with an additional $20,000 increase for seniors. A homeowner who pays the state’s typical school tax rate would pay $341 less on their annual tax bill, and seniors would save an additional $227.
But lawmakers in the House say that those exemptions won’t help homeowners in a red-hot housing market like the one Texas endured last year. They instead want to lower the state’s annual appraisal cap on a home’s taxable value from 10% to 5% and expand the benefit to owners of commercial properties.
But tax experts warn that lowering the appraisal cap could have dire ripple effects that would create substantial inequities among property owners.
The stalemate could present major problems since cutting the state’s property taxes was a cornerstone of Gov. Greg Abbott’s reelection bid last year. Abbott has promised to spend at least half of the state’s nearly $33 billion surplus on property tax cuts, but so far he has not commented on which plan he prefers.
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