AUSTIN –– Lt. Gov. Dan Patrick announced Thursday that of the $32 billion budget surplus, nearly $3 billion will be spent on expanding mental healthcare facilities across the state.
When questioned on his plans for property tax relief––which many believe the surplus should be used for––Patrick blasted House Speaker Dade Phelan and his plan to reduce appraisal caps.
“We can negotiate on just about everything, but I do not negotiate on bad math,” said Patrick.
Patrick touted Senate Bill 3 by State Sen. Paul Bettencourt (R–Houston), which would increase the homestead exemption from $40,000 to $70,000 and allow seniors or disabled adults to deduct an additional $30,000.
“Under the House bill, they get $0. From the Senate, they get $1,000 plus what we’re doing in compression. One thousand dollars––just on the homestead exemption for the rest of their lives. So, if they retired at 65 and they live in that house until they’re 85 or 90, that’s $20,000-$25,000.”
Jeramy Kitchen, executive director of Texans for Fiscal Responsibility, said the Senate’s proposed homestead exemption “will save taxpayers who qualify for the exemption about $340 per year at rates adopted in 2022.”
Meanwhile, House Bill 2 by State Rep. Morgan Meyer (R–Dallas) would lower the appraisal cap from 10 percent to 5 percent and apply it to all properties (residential and commercial). It would also compress school district maintenance and operations taxes by 15 cents––double what the Senate is offering in Senate Bill 4 (7 cents).
Kitchen says if HB 2 becomes law, “it is estimated that the owner of a $350,000 home in Texas would see a potential annual savings of about $1,300 over the course of the next two years” on account of the compression in the bill.
Patrick, however, criticized the House leadership’s focus on appraisal reform. Since a 2019 property tax relief package capped annual revenue growth at 3.5 percent for local governments and 2.5 percent for school districts, “appraisals essentially don’t matter anymore,” he argued.
“The math doesn’t work for the appraisal caps, and we will not pass those,” said Patrick, adding that Phelan is “wrong.”
“We’re not doing appraisal caps. Period. End of story,” Patrick concluded.
Kitchen said there are flaws with both proposals.
“While leadership in the Texas Senate and Texas House of Representatives continue to squabble over the menial tax relief provided in each of their property tax relief packages, albeit in different forms, it’s important to highlight that neither meets the criteria for the largest property tax cut in Texas history, as Governor Greg Abbott has promised on several occasions,” Kitchen told Texas Scorecard.
“Both approaches do nothing more than continue the failed strategy of merely slowing the growth, while the tax burden continues to stifle true prosperity for Texans,” said Kitchen.
Lawmakers have a historic opportunity to not only provide the largest property tax cut in Texas history but also to put Texas on a path to eliminate this immoral tax. Instead of squabbling, elected leadership should come together to provide Texas taxpayers the relief they deserve.
SB 3 and SB 4 both passed the Senate unanimously and await hearings in the Texas House.
HB 2 was initially approved Thursday by the Texas House in a vote of 140-9.