(Austin) The Senate Property Tax Committee considered measures Tuesday that would increase the homestead exemption for local school property taxpayers by $10,000. SB 5 and SJR 71 by Houston Senator Paul Bettencourt would ask voters in November to approve an increase to the amount of property value that a homeowner can exempt from $25,000 to $35,000. He said this will cut the average property tax bill in Texas by about $125 per year. The state would cover the loss in revenue to school districts by using proceeds from oil and gas production taxes that would otherwise have gone into the Economic Stabilization Fund (ESF). Bettencourt believes the rainy day fund has enough in it to justify the diversion. “I personally view the ESF as full because we’re looking at values up to $15.66 billion at the end of the biennium without any withdrawals,” he said. The Legislative Budget Board estimates the measure will cost the ESF $1.6 billion in tax revenue through the 2023 biennium.
Bettencourt said that this is just one of several bills intended to deliver meaningful property tax relief to homeowners. The increased exemption would save homeowners what Bettencourt estimated to be about $4,000 in taxes over the standard 30-year mortgage period. Because rising property taxes and values eat into any tax cuts, however, reforms that limit that growth must be a critical piece of this strategy, he said. “The appraisal increases I’m hearing about are just astonishing, high single digits on homes in Harris county, all commercial property on average above 15 percent, every apartment over 25 percent…and that’s just one county,” said Bettencourt. He said he’s heard similar stories from all of the state’s major urban counties. Among several other property tax measures, Bettencourt is the author of SB 2, which would limit the amount a taxing entity can hike property tax rates each year to 2.5 percent. Anything more than that would require voter approval.