Property tax relief bills advance in Texas legislature
TEXAS (CBSNewsTexas) - Texas lawmakers are on track to pass property tax relief bills later this week and send them to Governor Greg Abbott to sign into law.
It comes one day after Republican leaders struck a deal after a month-long standoff at the Texas Capitol between Lt. Governor Dan Patrick, House Speaker Dade Phelan, and Abbott.
The House Ways and Means Committee passed three bills unanimously Tuesday afternoon and sent them to the full House, which will likely pass the legislation Thursday.
The Texas Senate is set to approve the bills Wednesday. The property tax cuts are worth $18 billion.
The state will reduce property tax rates on homes and businesses 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.
The deal will limit increases on appraised values to 20% for commercial properties and for non-homesteaded residential properties for the next three years.
Voters will also have to approve the legislation on Election Day in November.
Lawmakers believe it will pass and have said the property tax rate cuts for schools and homestead exemption increase will be retroactive for this year.
During the committee hearing Tuesday, one question came up: Would renters benefit from this legislation indirectly, and some lawmakers said: Yes.
One of those lawmakers is Representative Shawn Thierry (D-Houston) the Vice-Chair of the Ways and Means Committee.
"Perhaps it just goes to show us that as property taxes rise, renters pay more," said Thierry. "Therefore, we might be safe to assume as property taxes go down that the prices of rent may go down."
Representative Chris Turner (D-Grand Prairie) disagreed.
"I've heard that argument during the regular session a lot, to pass a property tax cut it's going to flow down to renters," Turner said. "Anecdotally, from my constituents, I have not heard that this is the case."
Under the legislation, small businesses will get a break from franchise taxes.
The exemption for businesses would increase from $1 million to $2.47 million, which means 67,000 firms wouldn't have to pay the franchise tax at all.
Andy Ellard, General Manager and owner of Manda Machine Company of Dallas said the property tax relief is welcome news.
"As a small business owner, I'm glad the House and Senate have put aside their political differences and are really finally going to give us some tax relief," Ellard said. "Us small businesses, we need it. We're going to use it to put back in our business, to reinvest in our employees, and keep this moving forward."
Ellard said he still hopes lawmakers will consider giving businesses like his other breaks in the future. They include relief on the tax that he and other firms pay on their equipment and inventory, something they must pay even if their businesses aren't profitable.
Some residents say they don't think the property tax cuts are big enough because the legislation doesn't put the state on a path to eliminate the school maintenance and operations portion of the property tax bill in the future.
Abbott had pushed for that.
Others want to include teacher pay raises or bonuses.
But this special session is focused only on property taxes and the governor's office said there will be at least one other special session this fall, which will likely cover education.
Voters will also have to approve the legislation on Election Day in November. Lawmakers believe it will pass and say this will be retroactive for this year.
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