SENATE ADDS TEACHER PAY INCREASE TO PROPERTY TAX PLAN FOR SECOND SPECIAL SESSION

(AUSTIN) — After the House and Senate failed to come to an agreement in the first called special session, Governor Greg Abbott called lawmakers back for an immediate session Wednesday to find a way to deliver billions in property tax cuts to Texans. Again, Abbott limited the agenda to bills that only use tax compression, where state revenue is used to buy down local school property tax rates, but added a second issue: legislation to put Texas on a pathway to eliminating school district maintenance and operations property taxes. The House advanced the same measures as last session, approving $17.4 billion in tax compression in committee, but unlike last session, the House didn't adjourn sine die and will remain in Austin to negotiate with the Senate on property tax plans. They'll also have to negotiate on another issue outside the governor's call in the form of teacher compensation.

Teacher pay raises passed the Senate overwhelmingly in the regular session, but again the chambers couldn't come to an agreement before session ended on Memorial day. The $5 billion to pay for it is already set aside in the upcoming budget, and an amendment added to the Senate property tax bill Wednesday by San Antonio Senator Roland Gutierrez would use some of that money to give a temporary bonus to Texas educators. The supplemental pay rates would apply through the next two school years and would equal the amounts approved by the Senate during the regular session. Teachers in urban districts would see an additional $2,000 each year and rural teachers would get a $6,000 supplemental payment. Next session, lawmakers can decide whether to make these increases permanent.

As far as property taxes, the Senate is still standing firm on the $100,000 homestead exemption, and with the exception of the new teacher pay amendment, approved measures identical to the ones passed as a final offer to the House in the last week of the first special session. In addition to the exemption increase, the bill includes further tax compression, and would exempt more small businesses from the state franchise tax. In all, the bills would spend $18 billion to lower taxes, which might be the largest tax cut in history according to Houston Senator and bill author Paul Bettencourt. He said the Senate plan would save the average homeowner more than $1200 in the first year, increasing to $1300 in the out years. Senior homeowners do even better and could see savings up to $1500 a year. "This is really eyepopping savings for the average homeowner," he said. Taken with the proposed pay increases, Bettencourt said this proposal will benefit millions of Texans. "I submit to the House, I submit to everyone in the state of Texas that this is a huge win for Texas taxpayers, it's a huge win for Texas homeowners,…it's a huge win for Texas businesses…it's a huge win for our Texas school districts…and now, it's an off the charts win for Texas teachers who are going to get a homestead exemption… and they're going to get a supplemental payment over two years of two thousand or six thousand dollars," he said. "It's astonishing work."

Before recessing until Friday, Patrick told members that he has already reached out to House Speaker Dade Phelan and House leadership about face-to-face negotiations. He said the two chambers will open those discussions next week. Still, Patrick called on the House to pass the Senate proposal. "We have been very clear, all of you, that we are not going to pass a bill on just compression. We must have that homestead exemption," he said. "We reach out to our friends in the House and we ask them to seriously consider this bill," said Patrick. "I look forward to talking to the Speaker, but I can't think of a better property tax bill that you could possibly pass." The Senate plan will require voter approval, meaning the bills must pass by mid-August in order to make it on the November ballot. The measures are structured such that if the voters approve, tax cuts would be backdated to apply to the current year's tax bill. If lawmakers can't come to a deal before this deadline, than any measure requiring a vote of the public will have to wait until 2024.

The Senate will reconvene Friday, June 30, at 10 a.m.

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