House and Senate Leaders Differ on Property Tax Relief Proposals

This week, House Speaker Dade Phelan announced the filing of the House leadership’s property tax relief proposal – House Bill 2 by Ways and Means Chair Morgan Meyer. Representative Meyer also filed House Joint Resolution 1, which would put House Bill 2 on the Texas ballot if passed by the Legislature, leaving it up to voters to decide whether it is adopted as state law.

House Bill 2, also known as the Property Tax Relief Act, would lower school district property taxes by 28% through rate compression of school maintenance and operations taxes and reduce the limit on annual appraisal increases to 5% for all types of property in the state. House Bill 2 would result in the largest property tax cut in Texas history, saving homeowners in the state an average of $460 on their annual property tax bill in 2024, which would grow to $590 in 2025.

In the Senate, Lt. Governor Dan Patrick announced the filing of the Senate leadership’s property tax relief proposal – Senate Bill 3 by Senator Paul Bettencourt. Senator Bettencourt also filed Senate Joint Resolution 3, which would put Senate Bill 3 on the Texas ballot if passed by the Legislature, leaving it up to voters to decide whether it is adopted as state law.

Senate Bill 3 would raise the homestead exemption from $40,000 to $70,000. All Texas Senators signed onto the bill. The Senate’s proposal would provide a historic 75% increase in the homestead exemption that would provide an additional $341 in savings on average on a Texas homeowner’s school tax bill at the statewide ISD average tax rate of $1.136* each and every year.

The Lt. Governor and Speaker were quick to criticize each other’s plan.

Speaker Phelan told the Texas Public Policy Foundation’s Policy Summit Thursday, “We can talk about homestead exemptions all day long, and that is great. But what does that do for the small business? I have constituents who don’t even own a home, they pour it all back into their business, but when their values go up 200% and there’s nothing they can do about it… it’s not right. It’s not Texan, and the Texas House is gonna do something about it this session.”

On the same stage just hours later, Lt. Governor Patrick publicly shot down the Speaker’s property tax relief plan. “I think the intentions of the House are good. But that would be a disaster and undo everything we’ve done that has brought property tax relief,” Patrick said. “The appraisal cap will undermine what we’ve accomplished. And what did we accomplish? We’re controlling local government spending to three and a half percent by counties and cities, and two and a half percent in our school districts. That’s how you lower property taxes.”

Speaker Phelan Announces Additional Texas House Priorities for 88th Legislature on Economic and Workforce Development

Speaker Phelan announced additional key legislative priorities of the chamber that are aimed at defending the state’s economic growth over the past two years and creating an opportunity for even more development as population continues to expand at a rapid pace.

The following bills, which make up the Texas House’s broader legislative priorities package for the 88th Texas Legislature, were filed this week:

• House Bill 5 by Rep. Todd Hunter

• House Bill 8 by Rep. Gary VanDeaver

• House Bill 19 by Rep. Andrew Murr

House Bill 5 by Representative Hunter, also known as the Texas Jobs & Security Act, would provide Texas with a critical economic development tool to create additional jobs, investments and tax revenue, keeping the state competitive in drawing businesses to relocate or expand here. Under House Bill 5, the incentives would be targeted and temporary in attracting large-scale, capital-intensive projects related to the manufacturing, national security and energy infrastructure industries. Texas taxpayers would also have transparency into how those state incentive dollars are used, the number of jobs created and the full economic impact of such projects on communities.

House Bill 8 by Representative VanDeaver would establish a new funding model for community colleges in Texas that recognizes and rewards such institutions for the important role they play with associate degrees, non-credit workforce education programs and other credentials of value that will be required in more than 60% of jobs in the state over the next decade. House Bill 8 would also create a new scholarship program, increasing the opportunity for economically disadvantaged high school students to enroll in dual credit courses, and expand access to higher education opportunities across the state by creating new shared services for institutions through the Texas Higher Education Coordinating Board, enabling colleges to expand their range of offered academic and workforce programs.

House Bill 19 by Representative Murr would create a business court system in Texas, strengthening the state’s already strong pro-business reputation that has driven economic and job growth to the state. A specialized court system for complex business cases in the state would establish a new avenue for those companies to solve their legal matters in a fair, streamlined and consistent manner.

“We have a good thing going here in Texas, and I thank Representatives Hunter, VanDeaver and Murr for authoring measures that seek to continue that trend line in our state,” Speaker Phelan said. “As Texas continues to grow and attract even more business that creates jobs and spurs local economies, our state must ensure that we have the kinds of tools to keep us competitive with others on a national and global scale.”

“With so much job growth happening in our state, it’s also important that we have the necessary avenues that foster workforce development to keep up with demand,” Speaker Phelan added. “I look forward to working with my colleagues in the Texas House on discussing these three legislative proposals in the coming weeks and passing them out of our chamber.”

Additional legislative priorities of the Texas House will be announced next week.