Is there REALLY Property Tax Relief Ahead? Let's DO THE MATH!
Want to know just how much the House and Senate plan to SAVE YOU on your property taxes with the bills they have proposed this session? Read on for the bill list and I'll break down the math.
The Senate has 3 bills, SB 3, 4, and 5, aimed at property tax relief, which would 'cost' 16.5B of the 34B budget "surplus" (a.k.a. OUR MONEY). STATUS - as of 5/12, all have passed the Senate and are waiting for hearings in House Committees.
Senate Bill 3 - Homestead Exemption
SB 3 raises the homestead exemption another 30K for all homeowners, plus an additional 10K for those over 65. Sounds like THOUSANDS OF DOLLARS right? But no - you may "only" pay a 2% tax on those thousands of dollars - so you need to do the math to see what you REALLY will be saving.
THE MATH: If your total tax rate is 2%, you will save $60, or $80 (if you are over 65) annually. (the THOUSANDS of dollars sure sounds better than less than $100 you will ACTUALLY save, right? guess which amount is in the press releases?)
Senate Bill 4 - School Property Tax Rate Cut
SB 4- Cuts school property tax rates by 0.07 for every $100 house value.
THE MATH - For every 100,000 your house is appraised - you save $70. So, a 300K house saves $210, a 600K house saves $420.
(are you feeling the RELIEF yet? Don't get me wrong - I will take all of my money back that the legislature is willing to give me - I would just like to see more of it! How about you?)
Senate Bill 5 - For Businesses
SB5 - is for businesses - raising the exemption on personal property taxes from $2,500 to $25,000 - so - does not apply to homeowners.
Senate Joint Resolution 3: Puts these provisions on the November ballot
All three of these bills are encompassed in Senate Joint Resolution 3 (SJR3) - which will put them on the ballot in the November general election, and we get to vote whether to add this "relief" to the Texas Constitution.
A press release quoted a Senator who said “I believe the public will vote for this unprecedented river of property tax relief if given the opportunity.”
Shall we break that down too?
First: Unprecedented? Given the history of our recent legislature's "tax cuts", I will grant you that this is UNPRECEDENTED. Even HISTORIC. But only because the "relief" that came before, was even SMALLER in comparison.
Next: RIVER? More like a sad, sorry little trickle! Your house has to be appraised at $600,000 before you can even "SAVE" $500 a year on your property taxes!
Let me tell you what a river is like: THOUSANDS - not hundreds of dollars!
Plans have been floated to completely erase the School Property Tax over a 10-year period. And yet, none of those plans were proposed in bills by the current legislature.
What would YOU consider a "river"?
I don't know about you, but school property taxes are a full SEVENTY FIVE PERCENT of my tax bill -(your mileage may vary).
How about ELIMINATING the School tax? Now THAT, my friend, would be an UNPRECEDENTED RIVER. For you too, I'd wager.
What about the House Bills this session?
Not to leave out the House - they are taking a slightly different tactic - HB 2 drops your school tax rate 0.15 for every $100 in house value. AND, it caps your appraisal value from rising to 5% a year (it is currently capped at 10% a year). STATUS - as of 5/12, HB2 passed the House and is waiting for a hearing in a Senate Committee.
THE MATH - For every 100,000 your house is worth, you would save $150. If your house is appraised at 300K, you save $450. If your house is appraised at 600K, you save $900.
No UNPRECEDENTED RIVER HERE EITHER, FOLKS!
Which version will pass this session, the House or the Senate?
Will either of them pass? Well, we sure won't get both. In fact the leaders of the House (Dade Phelan) and Senate (Dan Patrick) have been speaking out about this with each side preferring their own approach.
Remember, any bill has to pass both chambers before becoming law - so the House and the Senate are going to have to compromise.
Which do you prefer, the homestead exemption or the appraisal cap? The cap might sound great until you realize - the taxing entities get the appraisals BEFORE they set our tax rates each year. So they can set the "rate" anywhere they want it, to get the revenue they need. (And remember, if your taxing entity, be it a MUD, PID, City, County, or School District, sets the rate ANYWHERE other than the "no new revenue rate" - you just got your taxes raised, friends! For more about Texas property taxes, go here.
We will see what we end up with at the end of the session. But does anyone think either of these deals will get BETTER as the two chambers work through a compromise?
Yeah, me neither.
When the session ends - Remember this:
Just remember - when your elected officials come home triumphantly crowing about yet another session that delivered HISTORIC PROPERTY TAX RELIEF, please feel free to let them know you are NOT BUYING THAT B.S. FROM THEM THIS YEAR. Call them on it!
Want some REAL property tax reform next session?
When I am elected as your next State Representative for District 33, I pledge to work to deliver ALL TEXANS property tax relief their wallets will actually notice.
But I need your help! Contribute here - no amount is too big, and no amount is too small. Your contribution will help get the word out that District 33 will have a choice at the ballot box.
So, how do YOU feel about the proposed relief? Do you like the House or the Senate package better? Are you happy with what is being proposed down in Austin? Go drop a comment on my Facebook page on this topic and sound off!