What the Texas Homestead Exemption bill would mean for property taxes and school funding
AUSTIN – It is now in the hands of the Texas House to decide what to do about a new property tax cut plan. The author of the Senate's plan calls it the largest exemption increase in state history. While it could save many people hundreds of dollars on property tax bills, that money typically would go to funding schools.
Homeowners already saw a property tax cut in 2023. The Texas Senate is taking it a step further this week by approving a bill to increase the homestead exemption from $100,000 to $140,000 for many property owners.
State Sen. Paul Bettencourt, the author of the bill, said it would save the average homeowner about $360 a year, and as many as nine out of 10 seniors in Texas would pay no property taxes.
"It's going to particularly help people of lesser means who have homes that are less valuable than some of the big houses. I voted for it because, in reality, in many instances, home prices may have tripled over the past couple of decades," said State Sen. Nathan Johnson, D-Dallas County.
Property taxes are one of the three main sources of funding for Texas public schools. The legislature's plan is to use state sales tax and other revenues to pick up the cost of spending for public schools.
The Senate's plan includes setting aside about $3 billion to cover the anticipated lost revenue for schools from the $24 billion surplus, but Johnson still has concerns about school funding.
"I do not ever want to see a school district have to not hire a teacher or fire a teacher because we're giving people property tax relief this session," Johnson said.
It's now up to the Texas House to approve the legislation, and if it's signed by the governor, voters will have to approve the changes during an election in November before it can go into effect.
