House Adjourns Special Session, Remains At Odds With Senate on Property Tax Relief

The first of several special sessions ended almost as soon as it began, as the House and Senate remain divided on the issue of property tax relief (one of two items on the special session agenda), leading the House to adjourn Sine Die.

While House and Senate leadership went back and forth over which strategy for property tax relief would be most effective during the regular session, Gov. Greg Abbott remained particularly silent on the issue.

Now, he has directed the Legislature to focus “solely” on “reducing the school district maximum compressed tax rate,” or the maximum tax rate school districts can impose on property owners to fund their operating expenses.

Moving with considerable speed, the Senate on Tuesday passed Senate Bill 1 by State Sen. Paul Bettencourt (R–Houston), which would increase the homestead exemption to $100,000 and provide 10 cents (per $100 of appraised value) of tax rate compression, totaling $12.1 billion in property tax relief. 

When the bill was sent over to the House, however, Phelan said he would not refer it to a committee, as he did not believe it was germane to the governor’s call.

Instead, the House approved House Bill 1 by State Rep. Morgan Meyer (R–Dallas), which would reduce the maximum compressed rate by 16.2 cents and provide around $12.4 billion in relief, significantly less than its final $16.3 billion proposal from the regular session.

That legislation was passed immediately. The House then later adjourned Sine Die, meaning the Senate can take or leave the proposal.

Texans for Fiscal Responsibility thanked the governor for “demanding compression … and being honest about the real amount of new relief offered in the [regular] session.” They added, “We still want a path to M&O elimination,” referring to maintenance and operations school district property taxes.

Abbott noted in his special session announcement that $17.6 billion had been allocated for new property tax relief. Throughout the regular session, House and Senate leaders touted inflated figures regarding the amount of property tax relief their proposals would have provided, both of which included around $5.3 billion to fund the tax rate compression the Legislature agreed to in 2019.

New tax rate compression was a component of both the initial House ($12 million) and Senate ($5.4 million) proposals, which otherwise sought to provide property tax relief through vastly different approaches, with reduced appraisal caps being favored by House Speaker Dade Phelan (R–Beaumont) and an increased homestead exemption being the preference of Lt. Gov. Dan Patrick.

Tim Hardin, TFR’s CEO, said any proposal less that $21 billion would fall short of Abbott’s promise to provide the largest property tax cut in Texas history. He added that anything less than $16.3 billion—the amount contained in a compromise package embracing both strategies that was passed by the House—would be a “non-starter.”

Despite Abbott’s limiting the special session agenda to legislation that would provide property tax relief solely through compression, Patrick insists that any plan passed into law should increase the homestead exemption.

At a Tuesday press conference sponsored by the Texas Public Policy Foundation, Patrick argued that a homestead exemption is permanent, whereas a future Legislature could decide not to continue funding tax rate compression.

However, TPPF CEO Greg Sindelar says compression “is the best form of property tax relief.”

Don Huffines, a former state senator and the founder of the Huffines Liberty Foundation, agrees, calling efforts to increase the homestead exemption “a political stunt.”

The Senate is adjourned until Friday, June 2.

Darrell Frost

Since graduating from Hillsdale College, Darrell has held key roles in winning political campaigns, managed a state legislator's Capitol office, and taught at a classical charter school. He enjoys participating in outdoor activities, playing the harmonica, and learning about the latest scientific developments.