In breakthrough, Lt. Gov, House Speaker strike property tax cut deal, ending standoff
TEXAS (CBSNewsTexas.com) - Lt. Governor Dan Patrick and House Speaker Dade Phelan reached a breakthrough deal on how to give Texans a break on their property taxes.
The agreement came on Monday, after a month-long standoff between Patrick, Phelan, and Governor Greg Abbott.
In all, the property tax cuts are worth $18 billion dollars, more than half of the state's nearly $33 billion dollar surplus.
The state will reduce property tax rates on homes and business properties and use more state revenues such as sales tax to pay for public schools.
The homestead exemption will increase to $100,000 for most homeowners and to $110,000 for homeowners over 65 and the disabled.
What's not included in the deal is rebates for renters and certain increases for public education and teacher raises as some House Democrats proposed.
Education-related bills will likely come during future special sessions.
The deal will limit increases on appraised values to 20 percent for commercial and non-homesteaded residential properties for the next three years.
There are no increases for those properties now.
There will also be savings on the franchise tax for small businesses. The legislation will also create newly elected positions on local appraisal boards.
In a joint statement, Patrick said, "Speaker Phelan and I worked diligently together over the last week on the final bill. It made the difference. It may have taken overtime, but the process has produced a great bill for homeowners and businesses."
Phelan said, "Negotiations with the Lieutenant Governor have been extremely productive, and by coming together and finding common ground, the House and Senate are one step closer to providing much-needed, much-deserved relief."
In a statement, Abbott said, "...I look forward to this legislation reaching my desk so I can sign into law the largest property tax cut in Texas history."
Like other Texas homeowners, Jalee Gill of Richardson has been waiting for Republican leaders to strike a deal on property tax relief.
"It all sounds like a step in the right direction," said Gill. "I'm glad to see they got together to work it out. It's one of those things that I know is hard to do but seeing both sides of the fence getting together to work through things, coming up with what looks like an arrangement that ought to work is a great answer. Extra money is good."
What's not included in the deal is rebates for renters and certain increases for public education and teacher raises as some House Democrats proposed last week.
Once passed and signed by the Governor, voters will have to approve this in November. The savings will be retroactive to this year.
SMU political science professor Matthew Wilson says the public stand-off between the leaders surprised him.
"You would have expected that there would have been substantial conversations before the session started about how they wanted to go about this," said Wilson. "At the end of the day, it really doesn't matter to voters. This is the same tax relief that will be coming on the same schedule as would have been true had they come to an agreement earlier."
Abbott's Communications Director told CBS News Texas that another special session will be held this fall. Education-related bills will likely be a part of that.
Lawmakers will be looking to see if the governor calls them to pass the 77 bills he recently vetoed in an attempt to achieve a deal providing property tax relief.