Story by Jeremy Wallace
Most senior citizens won’t pay a penny of school taxes if they own homesteaded property under a pair of bills that have already cleared the Texas Senate and are essentially one vote away in the Texas House from almost certainly becoming law.
But that one vote is far from a slam dunk and could take weeks to sort out as the Texas Legislature enters its final month of its regular session.
Already about 45% of seniors and disabled residents in Texas don’t pay any school property taxes thanks to years of property tax reforms passed by the Legislature over the last six years. But if the House adopts a plan crafted by state Sen. Paul Bettencourt and Lt. Gov. Dan Patrick, both Houston Republicans, that could grow to an estimated 75%.
Bettencourt said the effort will reduce the burden on seniors and disabled Texans, “many of whom are living on modest Social Security or disability checks, or low income.”
It’s a two-part effort. First, the Texas Senate passed SB 4 to increase the exemption for all homesteaded properties from $100,000 to $140,000. Then last week, the Texas Senate passed SB 23 which increases the homestead exemption for disabled Texans and people 65 or older from $10,000 to $60,000.
The exemptions act as a discount by reducing the appraised value of a home. If both bills pass the Texas House and get approved by voters in November in a statewide vote, the exemption would be $200,000 – close to or more than the average taxable value of homes for seniors and the disabled in most of the state’s 254 counties.
But while lawmakers are eager to hand out property taxes breaks, some warn it could hurt businesses, renters and even seniors who don’t own homes because of how the plan shifts the state’s tax burden. Under the tax relief efforts, the state will send over $1 billion to school districts to cover lost property tax revenue from senior homeowners.
State Sen. Nathan Johnson, D-Dallas, said that means a senior who rents a home is getting no break from the new tax cuts, plus ultimately has their sales taxes helping pay down the property tax bill of seniors who can afford a home.
“This bill would provide some financial relief for people over 65 who own their homes and nothing for that larger cohort of people over 65 who are renting and struggling with housing costs,” he said.
There are other questions about whether the Legislature can really afford the tax break long term. In the future, if there are economic downturns or budget short falls, covering the lost property taxes for schools could become a real problem for future legislatures, according to an analysis from the conservative Texas Public Policy Foundation.
Politically, getting homestead exemptions though the House have historically been a bigger lift. In 2023, a split between the two chambers killed a property tax cut during the regular session and resulted in two more special sessions before they could come to terms.
This year, the House has proposed its own package of tax cuts, but those don’t include increasing homestead exemptions. House Speaker Dustin Burrows, R-Lubbock, hasn’t said much on the specifics of homestead exemptions lately but made clear he supports a House plan that focuses more on broader tax cuts.