A new property tax relief proposal passed the Texas House unanimously on Friday.

Combining elements of property tax plans from both chambers of the state legislature, the measure represents a breakthrough in deliberations that until recently appeared to have been at a stalemate.

Senate Bill 3 by State Sen. Paul Bettencourt (R-Houston) is one of a series of bills in Lt. Gov. Dan Patrick’s property tax relief package. It passed the state Senate on March 22 but was not considered in the state House until May 12. The prolonged lack of movement was an indicator of disagreement between the House and the Senate over how to respond to Texans’ outcry over their ever-increasing property tax bills.

It appears lawmakers in both chambers agreed to a compromise. House Republicans quickly escalated SB 3 to the House floor, where it passed by a vote of 147-0.

The revised bill increases the homestead exemption for property taxes from $40,000 to $100,000 and adds another $10,000 for seniors and individuals with disabilities. It also lowers the appraisal cap (the limit on year-over-year appraisal growth) from 10 percent for residents with a homestead exemption to 5 percent for all property owners.

The original Senate plan raised the homestead exemption to $70,000 ($100,000 for seniors and people with disabilities) and didn’t change anything regarding appraisals, while the House plan was focused primarily on appraisal reform and didn’t touch exemptions.

State Rep. Morgan Meyer (R-Dallas), the House sponsor for SB 3, claims the proposal “provides immediate and permanent property tax relief and improves the predictability of the property tax system.”

“We must take advantage of this once-in-a-lifetime opportunity by sending the largest tax cut in our state’s history to the governor’s desk,” he added.

According to Meyer, SB 3 totals more than $21 billion in property tax relief, compressing local school maintenance and operations tax rates by 15 cents and increasing the state’s share of public education funding to 54 percent. It is projected to save the owner of a $350,000 house $1,325 in 2024 and $1,518 in 2025.

An analysis by Texans For Fiscal Responsibility largely supports these claims, with the exception of Meyer’s calculation regarding the total amount of relief, which includes $5.3 billion that would simply provide continued funding for relief legislators agreed to in 2019.

Two Democrat House members offered remarks representative of the differing perspectives on the best way to provide property tax relief.

State Rep. Terry Canales (D-Edinburg) said the appraisal cap is “a safety measure from the appraisal district raising the appraisal value to offset the break that we’re getting.”

State Rep. Trey Martinez Fischer (D-San Antonio), on the other hand, said appraisal caps “will certainly save money [but] will be very expensive to maintain over the course of future legislative sessions,” explaining he prefers homestead exemptions, which he described as “a big coupon that a taxpayer could use to save some money.”

Martinez Fischer previously tried to add an increased homestead exemption to House Speaker Dade Phelan’s (R-Beaumont) plan for property tax relief—House Bill 2 by Meyer—but his amendment was voted down during debate on the measure.

With a budget surplus of $32.7 billion to begin the session, state lawmakers were faced with an unprecedented opportunity to provide historic property tax relief. Gov. Greg Abbott has repeatedly said he wants the legislature to provide the “largest tax cut ever in the history of Texas,” which would be about $20 billion in inflation-adjusted dollars to surpass the $14 billion provided in 2006.

The Senate must approve changes to SB 3 before the bill can receive Abbott’s signature.

The legislative session ends May 29.

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.