Texas Democrats Open Up A $20.9 Billion Tax Relief Plan

House Democrats on Thursday unveiled a $20.9 billion plan to deliver property tax relief to Texans through tax compression, increasing the homestead exemption and offering renters annual rebates. The new plan would also build annual teacher pay raises into the state’s school financing system.

Part of an omnibus package touching on many of the property tax proposals that lawmakers have discussed but couldn’t come to terms with during the regular and first special sessions, the bill proposed by Rep. John Bryant, D-Dallas, combines ideas from the previous House and Senate plans, adds renters to the mix, and looks to shore up teacher pay.

In a news conference Thursday announcing House Bill 62 and its companion joint resolution, House Democrats said the proposal would allow for continued and sustainable relief for homeowners as well as for teachers.

“Our effort is one that recognizes that you can’t talk about property taxes without talking about public education,” Bryant said of his proposal to raise the state’s basic allotment for school funding by $1,000.

The allotment increase, which would be tied to and move with inflation, also directs that future increases to the allotment continue to account for raising teacher pay. Thus, Democrats said, the plan would result in a permanent annual raise of $4,300 for teachers through a $15 billion expenditure.

Last week, the Senate advanced a tax proposal that would increase the homestead exemption to $100,000 and give a $2,000 pay increase to teachers in urban districts and a $6,000 increase to teachers in rural areas over the next two years.

However, Bryant said of his House proposal, “It results in a permanent increase in teacher salaries of $4,300 a year, not a temporary one-time proposal for a certain amount for one type of school district and more for another type of school district.”

Like the Senate’s tax proposal, the newly proposed House package also addresses a homestead exemption, something the lower chamber has been hesitant to support and ultimately unwilling to pass this year in favor of reducing the cap on annual property appraisal increases and compressing tax rates.

Under the property tax package, homeowners would be eligible for a homestead exemption of $100,000 or an amount equivalent to 25% of their home’s value — though that exemption would be capped at $200,000 — whichever figure results in the higher savings.

Lt. Gov. Dan Patrick, who has been unabashed in advocating for a $100,000 homestead exemption as opposed to other plans, did not respond to an American-Statesman request for comment.

However, the most notable difference between the plan proposed Thursday and previously considered property tax bills is that renters, who make up 38% of Texans, would now be offered a slice of the pie.

Through Bryant’s bill, those who have rented their primary residence from the same landlord over a 12-month period would be eligible for a tax rebate of 10% of the annual rent they have paid.

“We cannot ignore the fact that renters have been left out of this conversation from the very beginning,” Rep. Christina Morales, D-Houston, said at the news conference. “Renters deserve to receive their fair share of tax relief especially as rents have skyrocketed in the past few years.”

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