Yesterday, after a months-long stalemate between our state’s Republican leaders, the Texas Legislature finally agreed to a property tax cut. I voted for this legislation because – once approved by the voters in this November’s election – it will provide some relief for homeowners and businesses in District 101 and throughout Texas.
That said, I won’t overstate what this legislation does – our property taxes are high today, and they will still be high when this legislation goes into effect. Texas has some of the highest property taxes in the nation, and that will likely continue to be the case.
The legislation that passed:
Increases the homestead exemption from $40,0000 to $100,000 for all Texas homeowners. This means for a homesteaded property, you will not pay school district taxes on the first $100,000 in value.
Reduces the school property tax rate by 10.7 cents per $100 of value.
Creates a three-year, 20% cap on appraisal increases for commercial and non-homesteaded properties worth $5 million or less.
Exempts more small businesses from franchise taxes by increasing the franchise tax revenue exemption from $1 million to $2.47 million.
Eliminates the requirement that businesses that do not owe property taxes complete an annual franchise tax filing.
I have always supported increasing the homestead exemption because it helps the majority of homeowners the most, including first-time homebuyers. Homestead exemption increases are the most effective way to help residents of District 101, where 98% of the homes are valued at under $500,000 (according to the most recent Census data). In contrast, compressing tax rates helps somewhat, but also disproportionately benefits higher-value residential and commercial properties.
In addition, the legislation passed yesterday provides no direct relief to renters and will not provide any additional funding to our schools or a pay raise for our hardworking teachers. That’s why I supported numerous Democratic amendments that would have provided teacher pay raises, increased school funding and helped renters. Unfortunately, each of these amendments were defeated by the Republican majority.
Because most of these changes require a constitutional amendment, voter approval is required for them to take effect. I will be providing more information on all proposed constitutional amendments to the election this November.
With the passage of these bills, the Legislature is adjourned until Governor Greg Abbott calls another special session, which is expected to happen in September or October.
More on that to come. For now, try to stay cool!