(The Center Square) – After claiming to pass the greatest property tax relief bill two years ago, which included loopholes allowing local jurisdictions to increase property taxes by close to 10%, the Texas Senate passed another bill again claiming it will reduce property taxes.
The Texas Senate passed SB 4 and a Senate Joint Resolution, both filed by state Sen. Paul Bettencourt, R-Houston. Bettencourt authored the bill that passed last legislative session that included a loophole allowing for local property tax increases. Bettencourt has been criticized for authoring a tax bill while he owns a tax advisory company that profits from property tax arbitration.
SB 4 would increase the Homestead Exemption to $140,000 and $150,000 for seniors. This is after the exemption was increased to $100,000 two years ago, which for many did not offset property tax increases due to higher appraisal rates and local jurisdictions increasing property taxes due to the legislative loophole.
Patrick claims increasing the Homestead Exemption “is the best way to deliver meaningful property tax reductions for homeowners.”
In 2015, the Homestead Exemption was $15,000. In the last legislative session, it was increased to $100,000, and $110,000 for seniors. Voters also approved a constitutional amendment to make the $100,000 Homestead Exemption permanent. As a result, “homeowners will receive tax relief every single year, forever,” Patrick said.
SB 4 would increase the homestead exemption again and the resolution proposes another constitutional amendment to make the $140,000 homestead exemption permanent.
Bettencourt claims that as a result of this year’s bill, “80-90% of Texas seniors will pay no property taxes at all.”
SB 4 works in conjunction with the Senate budget, which provides 6.8 pennies of school district tax rate compression. This “will result in an additional $133.13 in savings for the average homestead property owner, for a total of $496.57,” Bettencourt said.
Patrick and Bettencourt also claim that the bill will eliminate public school district Maintenance and Operation (M&O) taxes for residents living in 49% of Texas school districts.
In 492 school districts, a $140,000 Homestead Exemption “will mean the average homeowners will pay no school property taxes in 49% of school districts,” Bettencourt said.
This is because in those districts, homeowners “have an average home value under $140,000, meaning school M&O property taxes will be eliminated for the average homeowner in those districts,” Patrick said. “Estimates show the average Texas homeowner will save $363.44 due to this increase. When combined with the school tax rate compression already included in the budget, the average Texas homeowner will save $496.57.”
Despite property taxes increasing since the last legislative session, Patrick and Bettencourt claim that in 2023, “the Texas Senate delivered a tax cut of $1,266.30 for the average homeowner. When tax cuts from 2023 and 2025 are combined, homeowners will be receiving a total tax cut of $1,762.87. Seniors will receive a combined tax cut of $1,933.23, resulting in a 58.5% reduction in school district property taxes for seniors from 2023 to the present.”
SB 4 also includes a hold-harmless provision, guaranteeing the state will fully cover all public school district shortfalls resulting from exemption increases and includes protections for seniors and disabled homestead exemption owners.
SB 4 and the resolution passed unanimously by a 30-0 bipartisan vote. They head to the Texas House to consider, which proposed its own budget including a similar amount allocated for property tax relief.
Gov. Greg Abbott listed property tax reform as a top legislative priority, acknowledging in his state of the state address that the property tax relief he and the legislature promised two years ago didn’t come to fruition because of a loophole in the last bill, The Center Square reported.
“I want at least $10 billion in new property tax relief,” Abbott said. “But that will only work if local authorities cannot use loopholes to jack up your property taxes. … Loopholes that increase your property taxes must be banned. No tax entities should be able to raise your property taxes without a two-thirds approval by voters. No approval, no new taxes.”
