An Aerial image of a suburban neighborhood in San Marcos on October 18, 2021. Credit: Jordan Vonderhaar for the Texas Tribune

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With only hours left in the third special legislative session, Texas lawmakers started from scratch on new legislation intended to lower homeowners’ property tax bills — a key priority of the state’s Republican leadership.

The bill would ask voters in May to approve a constitutional amendment raising the state’s homestead exemption from $25,000 to $40,000 for school district property taxes, netting the average homeowner about $176 in savings on their annual property tax bill, according to Houston Republican Sen. Paul Bettencourt, the proposal’s author.

Senate lawmakers fast-tracked the proposal immediately after it was filed Monday evening. In the span of less than an hour, the bill sailed through a key committee and wound up back on the Senate floor where it passed unanimously — all before the text of the legislation became publicly available and without an opportunity for public comment.

Legislators have to wrap up their work on Tuesday.

The tax relief would cost the state about $660 million a year out of the state’s general fund. For now, that amount would come out of the state’s $4.4 billion surplus, Bettencourt. But it wasn’t immediately clear how the state would pay for the tax cut in the future.

“People see the need for property tax relief, and Texans are going to cry out for that continuously,” Bettencourt said on the Senate floor. “This is a great way to bring that home to all of the taxpayers of Texas.”

Bettencourt’s property tax proposal — normally a pet issue for Texas conservatives — won support from the chamber’s Democrats.

“Do you know that this is probably the best bill that’s come out of what is otherwise a bad legislative session?” state Sen. Royce West, a Dallas Democrat, asked Bettencourt on the floor.

The 11th-hour mad dash came as the House and the Senate had not yet produced a final compromise of the Senate’s priority property tax legislation — a $2 billion tax-cut bill that would temporarily reduce school property taxes and net the average Texas homeowner about $200 in savings on their tax bill next year.

That bill, also authored by Bettencourt and deemed a top priority of Lt. Gov. Dan Patrick, got a substantial overhaul in the House, where lawmakers completely gutted and reworked the bill to instead send $525 checks to homeowners — paid for with $3 billion out of the federal American Rescue Plan Act, the $1.9 trillion stimulus bill intended for pandemic relief.

That idea made it out of the House — but garnered criticism for excluding renters and perhaps skirting a federal rule that bans the use of stimulus dollars for tax cuts.

As of Monday evening, it was unclear whether the House and Senate would be able to come to an agreement on the final version before the session ended.

Cassi Pollock contributed to this report.

The Texas Tribune

The Texas Tribune is the only member-supported, digital-first, nonpartisan media organization that informs Texans — and engages with them — about public policy, politics, government and statewide issues.

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