Austin, Texas – The Texas Senate, in a unanimous decision, has passed an extensive property tax relief bill, bringing with it not only considerable tax relief for homeowners and businesses, but also a sizeable financial incentive for educators. The move was initiated on Wednesday as the Senate convened for the second special session of the term.
Signaling a potential thaw in the deadlock that has stifled progress for over a month, Lieutenant Governor Dan Patrick has extended an olive branch to House Speaker Dade Phelan. In a move welcomed by both sides, Patrick has declared his intention to seek a direct dialogue with Phelan next week, expressing his belief in resolving matters through face-to-face interaction.
The supplemental payments for teachers, which are notably distinct from a traditional pay raise, materialized as an amendment to the property tax relief bill. The amendment was proposed by Democratic State Senator Roland Gutierrez from San Antonio. Under the new legislation, teachers serving in school districts with more than 20,000 students will receive an additional $2,000, while those in districts with fewer than 20,000 students will receive an increase of $6,000.
The total cost of the amendment, agreed upon and signed by the full 30-member Senate, will amount to $3.2 billion, funded through the state’s impressive surplus of nearly $33 billion.
Senator Gutierrez, commenting on the bill’s passage, expressed his gratitude towards his colleagues and the leadership, lauding the spirit of cooperation that facilitated the bill’s successful negotiation and ultimate passing.
The new bill encompasses a massive $18 billion in total property tax relief. This will be achieved by raising homeowners’ homestead exemptions to $100,000. Senators argue this move will result in savings close to $2,600 for most homeowners over the first two years, and around $3,000 for those over the age of 65.
In addition to the benefits for homeowners, the bill will double the business franchise tax exemption to nearly $2.5 million, effectively eliminating the business franchise tax for approximately 67,000 small businesses.
The House of Representatives also held a session on Wednesday. The House Committee on Ways and Means, however, passed a different bill to the Senate’s. The House’s legislation does not raise the homestead exemption and solely concentrates on reducing school property tax rates, to be offset by state revenues, as per the request of Governor Greg Abbott.
Moreover, the governor aspires to phase out the maintenance and operation portion of school property taxes, which currently constitutes the largest segment. This ambition is echoed by Lt. Gov. Patrick, who has implored the House to contemplate the Senate’s bill seriously.
Should the House follow suit in passing the Senate’s bill and gain Governor Abbott’s signature, it will then be subject to the approval of the voters on the forthcoming election day in November.