'Texas-sized' relief: Senate passes $22.7 billion school property tax cut package

Yahoo

14-02-2025

The Texas Senate on Thursday unanimously passed a $22.7 billion tax relief package, which its author called a "Texas-sized" commitment to reducing school property taxes, though senators from both parties said the Legislature needs to do more to cut down the annual levy.
Senate Bill 4 by Sen. Paul Bettencourt, R-Houston, would cut taxes by raising the homestead exemption to a record $140,000, or $150,000 for senior citizens — which would be deducted from the taxable value of an owner's property when calculating school district property taxes.
The proposal will now head to the House, where the speaker on Thursday appointed committees, setting the stage for the lower chamber to begin considering legislation. If the Legislature approves SB 4, Texas voters would have the opportunity to amend the Texas Constitution in a statewide election to make the change permanent.
Texas House committees appointed, signaling a new phase in 2025 legislative session
Bettencourt estimates the higher homestead exemption, combined with additional tax compression measures expected to pass as part of the Senate's proposed budget, homeowners could save about $500 on average each year.
The average home appraisal in 49% of the state's nearly 500 school districts is below $140,000, Bettencourt said, meaning many property owners could be spared from paying school maintenance and operations taxes. The homestead exemption does not apply to school interest and sinking taxes, which is a component of the property tax rate that goes toward debt from bond elections.
The Senate's approval comes just days after its Committee on Local Government advanced SB 4 and Senate Joint Resolution 2, the proposed state constitutional amendment to ratify the exemption hike. Gov. Greg Abbott and Lt. Gov. Dan Patrick both designated property tax relief as a main priority for the 89th Legislature.
Bettencourt celebrated the Senate's approval of the higher homestead exemption, which he said is "the most powerful tool that a tax writer can use."
"Today, the Texas Senate delivered a win for homeowners statewide," the bill's author said in a statement after the vote. "By passing SB 4 and SJR 2, we are putting real dollars back into the pockets of Texans while ensuring our schools remain fully funded."
The bill includes a provision that the state would cover any budgetary gaps that school districts incur due to the increased homestead exemption.
Patrick, who presides over the Senate, also praised SB 4's passage, noting he has been pushing for tax relief since well before he was elected lieutenant governor.
'Based on the unanimous 30-0 vote, it is clear senators from both sides of the aisle understand that when an increased homestead exemption and more compression are combined, homeowners receive maximum tax relief benefit," Patrick said. "I thank Sen. Paul Bettencourt for his hard work in carrying SB 4 and SJR 2.'
Sen. Lois Kolkhorst, R-Brenham, also praised the bill but said it doesn't go far enough to provide relief to Texans amid soaring inflation costs.
"Don't take your victory lap today, because our work is really just beginning on what we can do on this," Kolkhorst said.
The senator from east Central Texas argued that any savings from an increased homestead exemption could easily be offset by skyrocketing appraisal values. She suggested dropping the cap on home appraisal increases from 10% to 5% in addition to raising the exemption.
Sen. Sarah Eckhardt, D-Austin, who supported the bill, said she is still left with reservations. She said expanding the tax breaks to commercial properties could help lower costs for renters, and she argued that increasing state funding for schools would decrease districts' reliance on property taxes.
"The most powerful tool this Legislature could use to provide meaningful and long-lasting property tax relief is for the state to fully fund the state's obligations," Eckhardt said. "If we fully fund our obligations to public education in the form of an increase in the basic allotment, and indexing it so it doesn't lose value to inflation, that would help every taxpayer."
This article originally appeared on Austin American-Statesman: Texas Senate passes $22.7 billion school property tax cut bill