The Texas Senate has passed two bills aimed at cutting property taxes by increasing the Homestead Exemption for property owners. Senate Bill 4 and Senate Joint Resolution 2 would raise the exemption from $100,000 to $140,000 (or $150,000 for seniors), saving homeowners an average of $363.44 on their annual property tax bill. However, this would mean less money for already cash-strapped public schools.
The bills must be approved by 2/3 of the Texas House and then Texas voters in November to go into effect for this tax year, with the exemption being retroactive to 2025 tax bills if passed. SB 4 includes a provision for the state to make up any shortfall in tax revenue for school districts due to the higher exemption.
State Sen. Paul Bettencourt, author of SB4, hailed the bills as a win for homeowners while ensuring schools remain fully funded. Texas Lt. Gov. Dan Patrick highlighted the tax cuts homeowners and seniors would receive, including a 58.5% reduction in school district property taxes for seniors since 2023.
The bills are expected to receive bipartisan support in the House. The Texas school districts are funded by federal, state, and local taxes, with local taxes supporting maintenance and operations as well as capital projects through voter approval tax rate elections. Many districts are struggling due to lack of state funding since 2019, inflation, and unfunded mandates. Property owners are urged to carefully review ballot propositions to understand the impact on their tax bills.
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