There has yet to be an agreement between Texas House and Senate leaders as to what state property tax relief will look like, spurring Texas Gov. Greg Abbott's recent call for a special session of the 88th Legislature convening immediately following the end of the Legislature's regular session.
James Quintero, policy director for the Government for the People initiative of Texas Public Policy Foundation (TPPF), says that an agreement among the two chambers that includes rate compression would be a relief to Texans.
“Both chambers are moving quickly to advance property tax relief measures, with tax rate compression as the central element. If officials can come to an agreement, school district tax rates should decrease by $0.25 per $100 of value over the next two years, netting the owner of a $300,000 home roughly $1,300 in savings for the biennium. That’s welcome news for many Texans struggling with today’s cost-of-living crisis,” Quintero told the Austin Journal.
The Texas Tribune reports that Republicans in the Texas House and Senate failed to reach an agreement on an important GOP objective after a prolonged period of negotiation. On Monday, they ran out of time without finding common ground on using a significant portion of the state's substantial surplus to reduce property taxes for Texas residents and businesses.
Abbott announced In a press release that the focus of the first special session would be on reducing property taxes and cracking down on human smuggling. He stated that the goal of the special session is to resolve disagreements over the allocation of $17.6 billion set aside for reducing property taxes during the regular session. “We must cut property taxes," the governor said. "Texans want and need a path towards eliminating property taxes. The best way to do that is to direct property tax reduction dollars to cut school property tax rates.”
The governor's agenda calls for the legislature to focus on property tax legislation which aims to provide relief for Texas taxpayers by reducing the school district maximum compressed tax rate.
Glenn Hamer, the president and CEO of the Texas Association of Business, stated that rate compression guarantees fair treatment and benefits for all, including both businesses and homeowners. He highlighted this as yet another demonstration of Abbott's status as the most business-friendly governor in the nation. Quintero echoed this idea in telling the Austin Journal, “Tax rate compression is the best way to benefit property owners of every type — i.e., homeowners, renters, and businesses.”
Throughout this year in Austin, Texas Republicans have promised a commitment to using a large portion of the state's nearly $33 billion budget surplus to reduce property tax burdens for both homeowners and business owners, reported Texas Tribune. Abbott, who emphasized property tax cuts as a crucial aspect of his reelection campaign, pledged that half of the surplus would be dedicated to tax reductions. However, despite prolonged discussions, lawmakers have been unable to reach a consensus on the specific approach to achieve the governor's goal.
House Speaker Dade Phelan and Lt. Gov. Dan Patrick, who presides over the Senate, have been publicly at odds about property taxes for most of this year, the Texas Tribune points out. Patrick has advocated for an increase in the state's homestead exemption, which is the predetermined value of a home exempt from taxation, particularly focusing on school district property taxes. Phelan, on the other hand, supports tightening the state's "appraisal cap," which limits the annual increase in the taxable value of a homeowner's primary residence by school districts. Both individuals argue that the other's proposal does not significantly reduce taxes.
“If passed, this session’s $17.6 billion tax cut package will provide real relief. But we shouldn’t be satisfied until school district M&O property taxes are eliminated entirely. That is the long-term goal,” Quintero told Austin Journal.