Top state leaders have toured the state promising Texans they will feel less financially cramped by oversized property tax bills after the legislative session.
So far, the two legislative chambers have taken different approaches to keep that promise, meaning they will have to hash out an agreement this spring.
To make a difference in the average homeowner’s tax bill, lawmakers must address school districts, which levy more than 50 percent of all local property taxes in the state. A few proposals on the table would provide some amount of tax relief for residents with different home values.
How would those proposals affect you next year? It depends on where you live and what kind of home you own.
House Bill 3
The House’s comprehensive bill on school finance and property tax reform, authored by Public Education Chair Dan Huberty, R-Houston, would lower school district tax rates statewide by four cents per $100 of taxable value. It would also further buy down property taxes for school districts with higher tax rates and limit their ability to immediately raise them. This would affect both homes and commercial properties in school district boundaries.
After getting voter approval in 2018, Dallas ISD now taxes at the maximum rate of $1.17 per $100 of taxable value; under this bill, it would tax at $1.09. Round Rock ISD, a suburban district, would tax at $1 per $100 of taxable value, instead of $1.04.
The original version of the bill would spend about $2.7 billion on property tax relief. HB 3 passed out of the House Wednesday with a nearly unanimous vote.
Senate Bill 5
A bipartisan group of state senators, including the upper chamber’s property tax champion, Paul Bettencourt, R-Houston, has proposed expanding an exemption homeowners are entitled to receive on the value of their home for school district taxes.
The legislation would boost the exemption from $25,000 to $35,000 if voters pass a constitutional amendment, and it would make up the lost school district funding by using revenue from oil and gas production taxes. (Because this bill would require voter approval, it probably would not kick in until 2021.) It has a biennial cost of about $1.5 billion.
Unlike HB 3, this bill would not affect school districts’ ability to set tax rates. It has been heard in the Senate Property Tax Committee, which has not taken a vote.
House Bill 4352
The House Democratic Caucus has championed this bill by state Rep. Ramon Romero Jr., D-Fort Worth, as a key portion of its “Texas Kids First Plan” for public education. It would double the exemption homeowners are entitled to on their home values for school taxes, from $25,000 to $50,000, if voters pass a constitutional amendment.
The bill does not include language on exactly how it would reimburse school districts for the lost funding. Like SB 5, it would not affect school districts’ ability to set tax rates.
HB 4352 has a biennial cost of about $3.4 billion, but would not kick in until 2021, because of the voter approval needed. It has not been taken up by a committee.
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The 86th Legislature runs from Jan. 8 to May 27. From the state budget to health care to education policy — and the politics behind it all — we focus on what Texans need to know about the biennial legislative session.