$16.5 Billion Property Tax Relief Bill Soars Through Texas Senate Unanimously

Gov. Texas Lt. In a series of majority votes, Dan Patrick’s$ 16. 5 billion property tax reduction plan, which may result in significant savings for millions of homeowners and business owners, soared through the Senate.

Because all 31 Senators are aware that Texas homesteaders and business owners require real property tax relief, the Senate’s Property Tax Relief package passed through the chambers like a bullet train 124 – 0. However, Republic State Sen. Tom Bettencourt said that the relief this package provides to Texans is permanent, off the record for taxes.

According to Texas Comptroller Glenn Hegar, Texas has a report$ 33 billion surplus, which is the Lonestar state’s largest money residual ever.

Hegar stated in a news release earlier this year that” we are unlikely to have another chance like this.” ” This budgeting time is truly a once-in-a-lifetime opportunity.”

Senate Bills 3, 4, and 5 are included in the republican tax relief system, along with Senate Joint Resolution 3, a proposed Texas Constitutional amendment that would require voter approval before the home increase could go into effect.

” I have been very clear that a significant portion of that surplus must be returned to the taxpayers before committing to any new spending ,” according to Patrick,” since the Comptroller stated in 2022 that Texas would have budget surpluses for the bienniums ( 2022 – 2023 ).”

In comparison to the current$ 40, 000, SB 3 would increase the homeowner’s homestead exemption to$ 70,000, or 75 %. Homeowners may save hundreds of dollars annually with the freedom. ( pdf )

Additionally, school district exemptions for homeowners 65 and older or disabled would increase from$ 10 000 to$ 30 000, bringing their total to$ 100 000 for the rest of their lives. The estimated annual savings for qualified homeowners would be$ 1, 062.

SJR 3 may be put on the November ballot for voters to choose whether to improve the home deduction if the bill is approved by the House. ( pdf )

To Become Retrospective

The proposal will go into effect for 2023 property tax expenses if approved by voters.

If given the chance, Bettencourt and Parker stated in a cooperative statement,” We are confident that the government will vote for this unparalleled property tax relief system.” ” On January 1st, it will go retrospective, and tax bills may be reduced in 2023!”

Voters overwhelmingly approved Propositions 1 and 2 in May of last year to raise the homestead exemption from$ 25, 000 to$ 40,000 and lower the property tax limit for school maintenance and operations taxes imposed on elderly or disabled homes.

SB 4 would reduce the number of districts needed to pay recapture, also known as Robin Hood, and provide an additional$ 5.38 billion in tax rate compression. ( pdf )

According to the release, rate compression” benefits all taxpayers and reduces recapture by funding addition Maximum Compressed Rate ( MCR ) compression in school finance formulas.” ” School districts will be able to lower their M & O ] maintenance and operations ] tax rate further by expanding the school finance equity band.”

A portion of the school taxes on the property tax bill would be reduced by about 7 cents per$ 100 valuation for homeowners.

SB 5 would provide businesses with$ 1.5 billion in tax relief. ( pdf )

The business inventory income would be reduced by 20 % as a result. Additionally, it would raise the personal property exemption from$ 2,500 to$ 25,000.

Smaller businesses are the cornerstone of our economy, and report inflation has had a significant negative impact on them, according to Parker. ” SB 5 will give companies in Texas significant tax reduction, assisting them in staying afloat, opening up more employment opportunities for Texans, and maintaining Texas’ position as the eighth-largest economy in the world.”

Why a Budget Surplus, You Ask?

Hegar credits the benefit to the nation” vigorous economic development” since the COVID-19 pandemic ended, rising energy prices, and the” highest amount of common cost inflation in 40 years.”

The state receives funding from more than 60 different fees, charges, and analyses.

In 2024 – 25, sales tax collections will account for 53 % of the state’s GR– R revenues. According to Hegar, the” biennial revenue estimate” projects sales tax revenues will rise by 9.1 percent from the 2022 – 23 biennium, reaching$ 87.9 billion for the next 25 years.

A condition cannot impose a state income tax, according to the Texas Constitution.