Here are the 2 philosophies to reduce property taxes behind the standoff between Gov. Greg Abbott, Lt. Gov. Dan Patrick
AUSTIN (CBSNewsTexas.com) – Larry and Glenda Legler think the state should be using much of its nearly $33 billion surplus to give Texans a break on their property taxes.
Larry Legler said, "The state's got an ungodly amount of money that they need to do something with."
But after months of promises to do that, Republican leaders still can't agree on the way to provide relief. "That's what's getting frustrating."
Governor Greg Abbott prefers ending the school maintenance and operations or "M&O" portion of your property taxes over ten years.
That portion alone is about 42% of your property tax bill.
To make that happen, the state would shift sales tax, other state revenues, and surplus money to pay for public schools.
That would allow the state to gradually reduce the rate for M&O property taxes until they're eliminated altogether.
Vance Ginn, a conservative economist and president of Ginn Economic Consulting, has pushed this idea for years. "It's the only way that you can get to $0 school district property taxes is by buying down those rates because that rate can go to zero which zero out of a hundred-dollar valuation for a home is $0. And so that is still $0, and you've eliminated that tax."
But Lt. Gov. Dan Patrick and the Texas Senate have a different plan.
While it uses more state revenues and less property taxes to pay for schools, it would also increase homestead exemptions for most homeowners from $40,000 to $100,000.
And for homeowners over 65, it would raise homestead exemptions from $70,000 to $110,000.
Patrick said it would provide nearly double the savings for homeowners than the Governor's plan.
CBS News Texas asked Patrick earlier this week if he doesn't support eliminating the school property tax.
He said, "You can't get there. You only have sales tax to prop up a state of 30 to 35 to 40 million people the next decade. What happens when we have a decline and sales taxes go down? You'll have no money to pay your bills. You can't be a one-legged horse."
Ginn disagreed. "The Comptroller said we're going to have about $27 billion in the rainy-day Fund. The rainy-day fund is there to cover unforeseen revenue shortfalls which would be exactly this sort of situation."
Abbott said 30 business and other groups support his plan.
The Leglers said because they're seniors, they prefer the plan from Patrick and the Senate. "Everything's gone sky high and when people can't get the medications they need, which is not our case, but many people we know, or they can't afford groceries, a loaf of bread at the grocery store, we got a problem."
Both the House and Senate have approved different legislation, and until they pass the same bill, the Governor cannot sign it into law.
Abbott will speak Friday about this, and other issues related to the regular and special legislative sessions.
