Texas Lawmakers Fail To Reach Last-minute Deal To Cut Property Taxes

May 30, 2023- After weeks of public bickering, chaos and a stalemate, Republicans in the Texas House and Senate ran the clock out Monday without coming to terms on a key GOP priority: using a large part of the state’s historic surplus to lower property taxes for Texas homeowners and business owners.

And then Gov. Greg Abbott immediately called lawmakers to a special session to make a deal on property taxes.

The final hours of this year’s regular legislative session came with drama on property taxes — with Gov. Abbott and Lt. Gov. Dan Patrick taking negotiations public to Twitter and lawmakers waiting on a potential deal for hours after they otherwise would’ve left Monday afternoon. The last day of the session is typically more ceremonial — not filled with tough negotiations on leaders’ top priorities.

After hours of suspense, Texas House Speaker Dade Phelan gaveled out Monday — adjourning the chamber for the session, though he told House members to expect Abbott to call them back soon.

Texas Republicans came to Austin this year with a big promise to use a large portion of the state’s nearly $33 billion budget surplus to cut property tax bills for homeowners and business owners. Abbott made property tax cuts a pillar of his reelection campaign last year and vowed that the state would put half of its surplus toward tax cuts. But for months, lawmakers couldn’t come to terms on just how to do so.

For much of the session, the heart of the dispute was Phelan’s proposal to tighten the state’s appraisal cap and extend the benefit to owners of business properties like grocery stores, apartment complexes and movie theaters. Phelan backed the idea in response to complaints from homeowners and business owners about their rising appraisals, which they fear will result in higher tax bills.

The appraisal cap proposal also horrified tax policy experts from across the political spectrum who warned that the idea would have substantial negative side effects while doing little, if anything, to actually lower property owners’ taxes. Tightening the appraisal cap, critics added, would lead to major inequities among homeowners and business owners, plus higher housing costs.

But the House ended up dropping the cap proposal by the last day.

The biggest stumbling block to a final deal was the Senate’s refusal of any agreement that didn’t include an increase in the state’s homestead exemption on public school taxes — the portion of a home’s value that can’t be taxed by school districts. The idea was popular in both chambers but was left out of the final proposal under the $12.3 billion plan backed by Abbott and the House.

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Author: Ethan Klein

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