Texas Republican Lt. Gov. Dan Patrick announced on Tuesday the Senate Finance Committee’s plan to provide billions in property tax relief.
Patrick, along with Republican state Sens. Tom Bettencourt and Tan Parker, introduced Senate Bills 3, 4, and 5 to provide $16.5 billion in property tax cuts. The state is sitting on a record $33 billion budget surplus.
“These are eye-popping off-the-chart numbers of savings that [taxpayers] can realize through the senate plan,” Bettencourt told reporters during a press conference at the Texas Capitol building in Austin.
The proposal would also triple the school district exemptions for homeowners over 65 or disabled from $10,000 to $30,000, bringing their total exemptions to $100,000, and estimated property tax reductions of more than $1,000 a year.
“They’re getting $100,000 of exemptions, and that’s going to stay with them for the rest of their lives,” Bettencourt said.
The bipartisan bill was joint-authored by 31 senators. In November, voters will get a chance to decide on the exemption increase. If approved, the measure would be effective immediately.
Last May, voters approved Propositions 1 and 2 to reduce the property tax limit for school maintenance and operations taxes imposed on the homesteads of elderly or disabled taxpayers and to raise the homestead exemption from $25,000 to $40,000, respectively.
Property Tax Cuts for Businesses
SB 5 would bring $1.5 billion in tax relief to businesses (pdf).“We hear so much from the business community about the importance of reducing the inventory tax, and in fact, we are doing that, as well,” Parker told reporters.
The bill would provide a 20 percent reduction on a business’s inventory tax bill and increase the business personal property exemption from $2,500 to $25,000.
Competing Property Tax Bill in the House
Patrick took aim at House Bill 2, a property tax relief bill introduced on Monday, which would provide $12 billion in property tax relief.One component of the bill would reduce the MCR by 15 cents but not less than 90 percent of the maximum compressed rate.
The second component would cap the growth in appraised values of real property at 5 percent, down from the current limit of 10 percent.
“If you lower the appraisal cap, the tax rate will go up,” Patrick said. “And in a few years, we will have destroyed everything we’ve done.”
House Speaker Dade Phelan said HB 2 would reduce school district taxes for a $350,000 home by $460 in 2024 and $590 in 2025.
The Senate package of bills is scheduled for a public hearing on March 15.