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Welcome to the official website for the
Texas Senate
March 14, 2023
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(AUSTIN) — Texas homeowners would see the largest cut to their property taxes in history according to lawmakers at a Tuesday press conference as the Lt. Governor and members of the Senate unveiled the chamber's plan for tax cuts this session. The three bills presented represent $16.5 billion in tax savings across Texas. "It's important to know that we're touching every taxpayer, every homeowner, every business owner, with needed tax relief," said Houston Senator Paul Bettencourt. "We're spending the money as wisely as we can to get the maximum tax relief possible - and this plan has eyepopping numbers."

TSN photo

Houston Senator Paul Bettencourt said the $16.5 billion property tax relief package is the largest in state history.

Senate Bill 3, by Bettencourt, would raise the homestead exemption - the amount of value a homeowner can write off before taxes - by 75 percent up to $70,000. This was the plan announced by Lt. Governor Dan Patrick earlier in the session, but Bettencourt revealed Tuesday that a second component will triple the senior property tax exemption for homeowners 65 years of age and older to $30,000. Combined with the increase in the base exemption, Texas seniors would qualify for an exemption of $100,000, said Bettencourt. Based on the average home value, he said homeowners would see a reduction in their property tax bill of around $800 in the first two years. For senior homeowners, Bettencourt said they would see savings above $1000 each year. "It's an astonishing number," he said. Two-point-two million homesteads, about 40 percent of the state total, are owned by seniors.

Senate Bill 4, also by Bettencourt, would buy down local school property taxes by another $5.83 billion on top of on-going rate compression from 2019's education reform bill for a total of $10.68 billion in school property tax rate reduction. Senate Finance Committee chair and bill co-author Joan Huffman said that the legislature will ensure the state will cover any lost local revenue. "Where this empties the bucket, the state is going to continue to fill up the bucket," she said.

The third bill, SB 5 by Flower Mound Senator Tan Parker, is aimed at business taxes, and would increase the exemptions for the tax on business personal property up from two-and-a-half to twenty percent, and would reduce inventory taxes by 20 percent. "We hear so much from the business community about the importance of reducing the inventory tax," said Parker. In all, the bill would represent $1.5 billion in tax reductions for Texas business owners.

The Senate plan focuses on exemptions, said Bettencourt, because that's the best way to deliver lasting cuts to taxpayers. "An exemption is permanent," he said. "These permanent exemptions will be there year after year to save Texas homeowners and Texas business owners the money they need plus [tax rate] compression." He said that combination has led to the reduction of the property tax burden across the state. Because the state capped local government spending growth in 2019 - 3.5 percent for counties and cities and 2.5 percent for schools - when appraisal values go up, the taxing entity must lower their tax rate to stay under the spending cap. This has largely disconnected appraisal growth and property tax growth, said Patrick. "We all got calls about appraisals going up, but we didn't get calls in October when the bills went out," said Patrick. "The real key to saving Texans' taxes is limiting the size of government." It's the state's cap on its own spending, combined with record revenue projections and a record budget surplus, said Patrick, that's driving the size of the relief package. Bettencourt agreed. "We’ve never had $16.5 billion to throw at property tax relief, and that is a record number," he said. "It is well spent and I believe it's going to be well received by the citizens and taxpayers of the great state of Texas."

The Senate will reconvene Wednesday, March 15th at 11 a.m.

Session video and all other Senate webcast recordings can be accessed from the Senate website's Audio/Video Archive.