Texas Lt. Gov. Dan Patrick Says ‘Largest Property Tax Cut In Texas History’ Would 'Destroy Everything'
Texas House Speaker Dade Phelan is championing a property tax bill calling for $17B in cuts and a stricter cap on how much school district taxes can go up each year — a cap that would apply to commercial as well as residential real estate. But not everyone is applauding the legislation.
Texas House Bill 2 was introduced late last week by Rep. Morgan Meyer, a Dallas Republican, and endorsed by Phelan. The bill would lower school district property taxes by 28% and lower the cap on annual school district tax increases from 10% to 5%.
The passage of the bill would “result in the largest property tax cut in Texas history,” a statement from Phelan said. For the owner of a $350K home, the cuts would save more than $1K in the next two years, the Texas Tribune reported.
The changes would apply to all property types in the state, which Phelan says should shield homeowners, small-business owners and other property owners from what its advocates say could often be unsustainable sudden increases in property values.
Meyer also filed a joint resolution that would put HB2 on the ballot if passed by the legislature, so Texas voters would decide whether it is adopted as state law.
The Senate version of the bill doesn’t jibe with the appraisal cap cuts, with Texas Lt. Gov. Dan Patrick saying lowering the 10% cap passed in 1997 would “destroy everything we just accomplished,” the Texas Tribune reported.
“I think the intentions of the House are good, but that would be a disaster and undo everything we’ve done,” Patrick said at a Texas Public Policy Foundation gathering, according to the Tribune.
Patrick and Sen. Paul Bettencourt, a Houston Republican, have instead proposed putting $3B toward raising the state’s homestead exemption, which is the dollar amount of a home’s value that can’t be taxed. The Senate plan calls for raising the exemption from $40K to $70K.
Tax and real estate industry experts say lowering the appraisal caps could have “severe ripple effects” on the housing market and property taxpayers, the Tribune reported. A Texas comptroller’s office report found that the 10% cap disproportionately benefits wealthier households.
The House bill would also shift higher tax bills to newer owners of homes while keeping longtime homeowners' bills lower, Texas Association of Realtors Chairman Marcus Phipps told the Tribune.
“You shift the burden from the long-term owner to the new owner,” he said. “And who are the new owners of real estate? They’re typically going to be your younger population.”