AUSTIN (Nexstar) — Texas Senate Republicans unveiled their plan to lower property taxes Tuesday, touting a $16.5 billion package they estimate will save the average homeowner nearly $800 on their tax bills for the next two years.
Senate Bill 3 raises the homestead exemption to $70,000. That exemption, the amount of your primary home’s value that is not taxed, is now $40,000. All 31 senators are joint authors of this proposal. SB 3 also triples the homestead exemptions for Texans who are disabled or over 65 to $30,000.
Senate Republicans estimated this bill would save an average homeowner $756 in the first year and $798 in the second year. For Texans over 65 or disabled, those savings would increase to more than $1,000. Their estimates are based on the average homestead value of $331,000.
“These are astonishing numbers,” Senator Paul Bettencourt (R-Houston) said. “I’ve been in the tax business for over 25 years. I never thought the Lieutenant Governor and I would ever be talking about one set of bills that would save an over-65 homestead owner over $1,000 per year.”
Senate Bill 4 buys down and backfills school district’s tax rates by increasing a tool called tax compression. This plan dedicates lowers the maximum school district tax rate by 7 cents per $100 of a home’s valuation. The state would then dedicate $5.4 billion to make up the difference for those districts.
Senate Bill 5 spends another $1.5 billion on tax exemptions for businesses, including just over $1 billion for an inventory tax credit. This bill would also raise the business personal property tax to $25,000, a tenfold increase on a tax Republicans dub the “nuisance” tax.
Across the Capitol, House Speaker Dade Phelan is championing a different plan. House Bill 2 would lower the amount a home’s value can raise year-over-year to five percent, down from the current 10% appraisal cap. But Lt. Gov. Patrick says that won’t gain ground in his chamber.
“I think it’s just because of some misinformation about what the caps do,” Lt. Gov. said of the House’s plan.
He and Sen. Bettencourt argued appraisal caps would not impact retired homestead owners or those whose values are dropping. When Lt. Gov. Patrick first ran for state senate, lowering the appraisal cap even further than the current House plan was his top priority.
“I came in thinking that was the answer. But we learned that wasn’t the answer,” he said. We also learned that the business community was afraid of a split tax roll. It also changed the values of people living on the same streets… so we learned, we listened, that they didn’t work, and we developed this plan.”
This is developing story. Check back later for updates.