Texas lawmakers propose bills to help homeowners save money
AUSTIN (CBSNewsTexas.com) – Andrew Morrells say their property taxes jumped by about $3,000 since they bought their home in Garland in 2019. "It seems to be just going up every year."
He and his wife Karin say during that time, their home's appraisal increased from $305,000 to $410,000, and that's even after they challenged it.
Morrell said, "It's still a pretty tough bill to swallow."
Texas leaders, including Governor Greg Abbott, Lt. Governor Dan Patrick, and House Speaker Dade Phelan, R-Beaumont, have said for months now they want to help by using about half of the state's nearly $33 billion budget surplus.
The House and Senate have competing visions.
Senator Paul Bettencourt, R-Houston, authored much of the legislation.
In an interview with CBS News Texas Thursday, he praised the total amount of relief homeowners and business owners would receive. "We've got a great plan. It's $16.5 billion. These are tremendous savings because the most powerful thing you can do as a tax writer is to exempt, keep somebody from paying a tax and that's what we do in the Senate plan."
Representative Morgan Meyer, R-Dallas, is the architect of House Bill 2, and said their plan provides $17 billion in savings. "We are providing in the House the largest tax cut in the history of the State of Texas. We want to try something new, try something bold. We're very confident our plan to provide real lasting property tax relief for our constituents."
This week, the House Ways and Means Committee, which Meyer chairs, voted out HB 2 and it will head to the full House for a vote.
Under the legislation, lawmakers have proposed lowering the cap on property appraisals from 10% on homes now to 5% for not only homeowners, but all property owners, including business and agricultural properties.
The House plan would also shift billions of dollars more of state funding to pay for public schools, lowering the rate of property taxes that would be needed to fund them.
Property owners would save on average $542 in 2024 and $733 in 2025 based on a $350,000 home.
Over in the Senate, all 31 lawmakers this week unanimously approved their own bills, SB 3 and SB 4, to reduce property taxes.
Their plan calls for increasing the homestead exemption from $40,000 to $70,000.
That would provide $756 in savings in 2024 and nearly $800 in 2025 on a $331,000 home.
For homeowners over the age of 65, the Senate plan would increase the homestead exemption to $100,000.
That would give seniors a savings of $1,033 in 2024 and $1,062 in 2025 on that same $331,000 home.
As in the House plan, the Senate legislation would also use billions of dollars more in state funds to pay for public schools and rely less on property taxes.
The Senate also unanimously approved SB 5, authored by Tan Parker, R-Flower Mound.
It will increase the property exemption for businesses from $2,500 to $25,000 and provide businesses with a 20% cut in their inventory taxes.
The author of the House plan, Representative Morgan Meyer, R-Dallas, told CBS News Texas Thursday that he believes capping the amount property appraisals can rise to just five percent is more effective than increasing the homestead exemption. "The homestead exemption is going to be evaporated within a year or two because appraisals are so out of control."
In an interview with CBS News Texas, Senator Paul Bettencourt, R-Houston, who authored the Senate plan, disagreed. "Sorry, that's now how the math works. I'm an old tax assessor, it's real simple. Exemptions hit your bill every year, regardless of what happens with your value."
Bettencourt said seniors won't be helped by the House plan to lower the appraisal cap. "An appraisal cap does nothing for over 65 homeowners on school taxes because their tax is already frozen. The values going up doesn't affect the fact over 65 homes are frozen and that's two million homeowners that get nothing with an appraisal cap."
Meyer said the House plan to lower the appraisal cap will help business owners plan for the future and help apartment complex owners, who have no cap on the appraisals of their properties.
He said that could potentially help renters. "Their values have been going up astronomically over the past three or four years and they've been passing that along to the renter and now they have a certainty with a five percent cap, with their appraisal only going up that incremental amount they can then pass along some savings to renters."
He acknowledged the state can't legislate that.
We asked Andrew Morrell which plan he and his wife would prefer. "I think the $70,000 would be better in the short-term but if the assessors are trying to the max every single year, then at ten percent, that $70,000 doesn't mean as much down the road."
If the House passes its different vision of property tax relief, lawmakers in that chamber will have to meet with Senators and hash out their differences.
Meyer said, "We will sit, and we will have a discussion as the Speaker (Dade Phelan, R-Beaumont) said. We're not taking anything off the table. We are going to work with the Senate because we believe passing property tax relief is of utmost importance.
Bettencourt said, "I'm kind of at a loss as to why the House is not considering additional homestead exemptions now because it's already been proven to work."
The legislative session will end on Memorial Day weekend.