HOUSTON – After months of debate, Texas lawmakers announced a deal Monday for a record-breaking $18 billion property tax cut to homeowners.
Millions of Texans could see the savings as soon as this fall if the plan authored by State Sen. Paul Bettencourt clears both chambers and gets the governor’s signature.
“This is off the charts positive for everybody involved in school taxation in Texas,” Sen. Bettencourt said.
The $18 billion will come from the state budget surplus of $32.7 billion. The homestead exemption will increase from $40,000 to $100,000 for every homeowner.
“That exemption will stay with you wherever you go for as long as you own the home,” Sen. Bettencourt said.
If approved by lawmakers and the governor, in November, Texas voters will have to approve a constitutional amendment to raise the homestead exemption.
The tax cut plan also brings a nearly 24% reduction to school district maintenance and operation tax rates for the next two years.
Based on estimates from Sen. Bettencourt’s office, the owner of a median-priced $331,000 home would see a property tax bill savings of around $1,300, or more than $100 per month.
“About half of the homeowners are literally, you know, on paycheck to paycheck status. They’re budgeted that tight. So for them to get over $100 a month tax-free is really an important thing,” Sen. Bettencourt said.
Lawmakers have been debating a deal since the beginning of the year, reaching an impasse as each chamber had different approaches to solving the same issue.
“Republicans began to look increasingly ridiculous in that this was a top priority for all Republicans back in January. They agreed that property tax relief should be passed,” Rice University Political Science Professor Mark Jones said. “This is a positive development for all Texans and especially for Texas Republicans and in particular for the lieutenant governor, because Lieutenant Governor (Dan) Patrick held firm to his position that he was not going to pass legislation without a homestead property tax exemption increase.”
After two special sessions on the topic, the plan will have to pass the House and Senate before going to Gov. Greg Abbott, who tweeted Monday: “I look forward to signing into law the largest property tax cut in Texas history.”
Sen. Bettencourt said the legislation could reach the governor’s desk by Friday.
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