Texas Lt. Governor Dan Patrick (R) and House Speaker Dade Phelan (R) recently announced and passed an agreement this week to provide Texans billions in property tax relief, ending a months-long stalemate. Lt. Gov. Patrick and Speaker Phelan issued a joint statement at the beginning of the week announcing the agreement which includes the following:
- Over $12 billion in state funds will be spent on reducing the school property tax rate for all homeowners and business properties.
- Each of the approximately 5.7 million homeowners in Texas will see their homestead exemption rise from $40,000 to $100,000.
- Non-homesteaded residential and commercial properties, valued at $5 million and under, will receive a 20% circuit breaker on appraised values as a 3-year pilot project.
- A $1.47 million increase in the Franchise Tax Exemption to $2.47 million.
- The creation of elected positions on local appraisal boards.
Speaker Phelan said in the joint statement that, “reducing property taxes, providing relief to small business owners, and reforming our appraisal system will ensure economic growth and prosperity, and this agreement is a significant victory for all Texans.”
“Speaker Phelan and I worked diligently together over the last week on the final bill,” Lt. Gov. Patrick added. “It may have taken overtime, but the process has produced a great bill for homeowners and businesses.”
“I promised during my campaign that the state would return to property taxpayers at least half of the largest budget surplus we have ever had,” Abbott said earlier this week. “Today’s agreement between the House and the Senate is a step toward delivering on that promise. I look forward to this legislation reaching my desk.”
ATR commends Governor Greg Abbott with Lt. Governor Dan Patrick, Speaker Dade Phelan, and other Texas lawmakers for their efforts to agree on a large property tax cut plan that will benefit homeowners, renters, and employers. Moving forward, however, ATR hopes Texas lawmakers can do a better job of growing government spending at a more modest pace, which will allow Texas lawmakers to provide greater tax relief, something that is needed in the Lone Star State, which is currently home to the nation’s sixth highest average property tax burden.
“Texas lawmakers, who had an extraordinary opportunity to substantially reduce burdensome school property taxes with a massive surplus, ultimately provided the second largest tax cut in the state’s history and largest in the country,” said Vance Ginn, a Texas-based economist and a senior fellow at ATR. “But there could have been much more in relief had the state not passed the largest spending increase in Texas history.”
“I commend Lt. Governor Patrick, Speaker Phelan, and their colleagues for reaching a deal to provide billions in property tax relief,” said Grover Norquist, president of Americans for Tax Reform. “With this property tax relief package, Governor Greg Abbott and Texas lawmakers are demonstrating once again – as Florida and Tennessee did earlier this year – that even in no-income-tax states with a relatively low overall tax burden (Texas has the nation’s sixth lowest average state and local tax burden), state lawmakers are not resting on their laurels and are continuing to find ways to make their tax code more competitive and less burdensome.”