Texas lawmakers have allocated $6 billion to ease property tax bills, but they’re split on whether homeowners or businesses should benefit most.
While the Texas Senate focused its efforts on providing larger tax cuts to homeowners, the Texas House of Representatives is pursuing a broader approach that includes tax relief for homeowners and businesses in the state, the Texas Tribune reported.
The House plan focuses heavily on lowering school district tax rates, the largest part of property tax bills for homeowners and businesses. The House would dedicate $3 billion to help school districts reduce these tax rates — a method known as “compression” — which would lower tax bills for commercial and residential property.
The House proposal would allocate an additional $2.8 billion to further reduce tax rates. A typical homeowner with an average home value of $302,000 could see a savings of roughly $204, or a 10 percent reduction in school taxes, if the proposed cuts were enacted.
The House plan does not stop with homeowners. Its proposal would introduce significant relief for businesses by proposing an increase in the exemption for business inventory, raising it from $2,500 to $250,000. To offset the cost of the exemption, $700 million would be allocated to school districts to cover the lost tax revenue.
Senate Bill 4, introduced by state Sen. Paul Bettencourt, R-Houston, calls for increasing the homestead exemption from $100,000 to $140,000, which would reduce the taxable value of a home and lower future property tax bills.
Proponents argue that the homestead exemption is the most equitable way to provide relief, as it applies universally to homeowners regardless of their property’s value.
Along with the increase in the homestead exemption, the Senate’s plan includes $3 billion to lower school tax rates, which would further reduce tax bills for homeowners. If enacted, homeowners with an average home value of $302,000 could save more than $500 on their school taxes.
The singular focus on homeowners has drawn criticism from business groups, which argue that their members are not receiving enough relief. The Senate has allocated just $500 million in cuts aimed at businesses, far less than the House’s proposal.
— Andrew Terrell
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