AUSTIN, Texas — On Thursday, the Texas House passed a $12 billion proposal aimed at providing property tax relief to property owners across the state.
House Bill 2, authored by State Rep. Morgan Meyer and backed by House Speaker Dade Phelan, passed the full House in an overwhelming 140-9 vote. It still needs to pass a final vote in the chamber before going to the Senate for approval – or disapproval.
The passage of HB 2 potentially sets up a property tax relief showdown between the House and Senate.
HB 2 proposes putting $12 billion into Texas school districts in order to lower their property taxes on homes and business owners. For those who own a home costing more than $350,000, the bill would result in more than $1,000 in savings.
The House proposal would lower appraisal caps from 10% to 5%. This would also apply business property owners, such as restaurants and apartment complexes.
Just prior to the House's initial passage of HB 2, Lt. Gov. Dan Patrick told reporters that tightening appraisal caps is not the answer. He claimed it wouldn’t benefit seniors whose appraisals are already capped.
"There's a handful of people who support lowering the appraisal caps, and the House Speaker is one of those and he's sticking to it," Patrick said. "Every now and then, you kind of have to acknowledge – maybe you were wrong. I have. I came in as a senator who thought appraisal[s] were the answer. I learned they weren't, and that's why we designed what we designed."
In the past, Phelan has countered the lieutenant governor's stance, arguing that lowering the cap is meant to ease property owners’ concerns over eye-popping property appraisal increases in recent years.
The Senate has its own property tax relief hopes in Senate Bill 3.
Unlike the House bill, SB 3, authored by State Sen. Paul Bettencourt, proposes to increase the state's homestead exemption – the amount of a home’s value that can’t be taxed by school districts – from $40,000 to $70,000. The exemption would lower the tax bill on a $300,000 home by about $664 a year and, for disabled homeowners and homeowners 65 and over, about $795 a year.
At the initial passing of HB 2 on Thursday, Phelan said "that, too, should send a message," presumably referring to what Patrick had said about appraisal cuts prior to the House's bill passing.
During debate on HB 2 on the House floor on Thursday, State Rep. Trey Martinez Fischer tried to tack on a boost in the homestead exemption that mirrors the Senate’s proposed increase. He also proposed cutting the appraisal cap to 7.5% for home and business owners. The amendment failed by 12 votes.
Cutting the state’s high property tax burden has been a top priority for Texas Republicans this legislative session.