If passed by voters, 5.72 million Texas homeowners will see 41.5% average cut over next two years School District property tax bill
AUSTIN, Texas (Texas Insider Report) — "TAXPAYERS WIN! All residential and commercial real property taxpayers WIN! 5.72 million Texas homesteaders WIN – with an eye-popping 41.5% average savings of $1,373 year after year!” exclaimed State Senator Paul Bettencourt earlier today, as he filed the largest property tax cut bill in Texas history after Lt. Gov. Dan Patrick and Speaker Dade Phelan cleared the way for House & Senate agreement after months of negotiations.
The $18 billion property tax reduction plan was announced by Lt. Governor Patrick and Speaker Phelan this morning during the 2nd Special Session called by Gov. Greg Abbott to address the property tax issue.
Senator Bettencourt’s SB 2 will increase every Texas' homestead exemption to $100,000 for School ISD property tax bills.Additionally, SB 2 will have $7 billion worth of Maximum Compressed Rates (MCR) compression of ISD Maintenance & Operations (M&O) Tax Rates levied by districts to fund the operations & maintenance of schools, amounting to property tax rate cuts of 23.8%.
Non-homesteaded real property valued at $5 million and under will receive a 20% circuit-breaker on appraised value increases as a 3-year pilot project.
Bettencourt also filed SB 3 with Senator Tan Parker (at far right, R-Flower Mound) as joint-author that will double the Franchise Tax Exemption and result in an estimated 67,000 Texas businesses no longer paying a franchise tax.
The chart below details the expected SB 2 savings for 5.72 Million Texas Homeowners on their ISD Tax Bill:
The agreed upon legislation will also eliminates the so-called “Nuisance-Tax” for 1.7 million taxpayers who file "No-Tax-Due" forms for franchise taxes, saving businesses both time and money.
School districts are held harmless on the changes included in SB 2 as well. ISD’s will receive $642 million on their Interest & Sinking (I&S) Tax Rate levied to pay for existing bond debt with the $100,000 Homestead Exemption, said Bettencourt (right, R-Houston.)
County Appraisal Districts (CAD) governance, however, is also addressed in SB 2.For the first-time ever, three county citizens will be elected county-wide to each CAD board of directors in non-partisan positions. In addition, the CAD board of directors will now select Appraisal Review Board (ARB) members in each county with a population of more than 75,000.
The Constitutional Amendment for SB 2 & SB 3 has been filed as a House Joint Resolution, HJR 2 by primary author Representative Will Metcalf (R-Conroe).
"Not only does Senate Bill 2 and 3, plus HJR 2 contain a record $18 billion dollar property tax relief, it has a huge $100,000 Homestead Exemption proposed Constitutional Amendment that must be voted on by the public to get 5.72 Million Texas homeowners an eye-popping savings of an average 41.5% cut over the next two years on their school district property tax bill,” Bettencourt stated.
“Plus, the public will be asked to approve the 20% non-homestead real property ‘circuit-breaker’ and a ‘catch-up’ for over-65 and disabled for the $15,000 homestead exemption increase adjustment from May 2022 state-wide election,” he concluded.
“Plus, the public will be asked to approve the 20% non-homestead real property ‘circuit-breaker’ and a ‘catch-up’ for over-65 and disabled for the $15,000 homestead exemption increase adjustment from May 2022 state-wide election,” he concluded.
Both the Property Tax Relief Bill and the Franchise Tax Relief Bill will originate in the Texas Senate, and the Constitutional Amendment will be introduced in the Texas House of Representatives as a House Joint Resolution (HJR).
The Senate and House will file legislation today with the goal of passing the bills later this week.
