(The Center Square) – With the legislative session winding down, the Texas House unanimously passed a new property tax relief bill on Friday.
The bill includes measures from other bills that previously passed the Senate and House, after the leaders of the Republican-controlled House and Senate remained deadlocked over how to deliver property tax relief and how to spend a record $33 billion surplus. The breakthrough came after a conference committee released its budget, which hinged on what the legislature decided on property taxes and public school education funding.
One of the measures, SB 3, filed by Sen. Paul Bettencourt, R-Houston, which passed the Senate in March, was recently brought to the House floor. It incorporated measures from HB2 and HJR1 filed by Rep. Morgan Meyer, R-Dallas. The House passed the bill with amendments by a vote of 147-0 on Friday.
The bill will increase the homestead exemption from $40,000 to $100,000, adding another $10,000 deduction for seniors and the disabled. The initial Senate plan raised the exemption to $70,000 for all homeowners and up to $100,000 for seniors and the disabled. The increase hands Lt. Gov. Dan Patrick a win, who said not increasing the homestead exemption was nonnegotiable.
The bill also will lower the appraisal cap imposed on year-over-year appraisal growth from the current cap of 10% on homes with a homestead exemption to 5% for all property owners. The appraisal cap is a win for House Speaker Dade Phelan, R-Beaumont, who said not lowering the appraisal cap was nonnegotiable.
When filing HB 2, Meyer said it was “the largest property tax reduction in Texas history.” Initially, he said the bill would provide $17 billion in property tax relief; the Senate’s version provided $16.5 billion.
After the bill passed, he said it “provides immediate and permanent property tax relief and improves the predictability of the property tax system.”
The bill is projected to deliver more than $21 billion in property tax relief. Homeowners with a house appraised at $350,000, for example, are expected to save $1,325 in property taxes in 2024 and $1,518 in 2025, Meyer says.
Texans For Fiscal Responsibility says the bill improves the Senate bill and “certainly represents tangible property tax relief that surpasses previous efforts and all but assuredly will provide Texas taxpayers relief, working to make a dent in their ever-increasing property tax burdens.”
However, the group notes that Meyer’s $21 billion total property tax relief claim “is somewhat misleading” because he’s including “more than $5 billion of previous property tax relief efforts being used to maintain the previous compression of the school M&O portion of the tax.”
All House Democrats voted for the bill, which now heads to the Senate. If the Senate passes it, the bill will head to the governor, who’s expected to sign it.
Gov. Greg Abbott made property tax relief a legislative priority this session and pledged to return half of the $33 billion surplus to taxpayers.
With property tax relief potentially shored up, a major point of contention in the House, school choice, is likely headed to a special legislative session. A major school choice bill, a legislative priority of the governor, already passed the Senate. If the House doesn’t approve a similar measure, the governor vowed he’d call multiple special legislative sessions until the legislature passes a school choice bill.