The comments were made Tuesday to the press and are his first since the Senate released its draft budget last Thursday; that draft contains $15 billion for cuts, including $3 billion to raise the homestead exemption from $40,000 to $70,000.
The rest is presumed to be for compression of local rates, something the state has done in the last two sessions. The Legislature also itemized $3 billion in federal coronavirus aid last session for compression this session.
“I of course will be pushing for even more,” Abbott said of the upper chamber’s blueprint.
The governor has previously called for the “largest property tax cut ever in the history of Texas” using at least half of the projected budget surplus to compress rates. That comment was made in September when the surplus estimate was $27 billion; it has since grown to $32 billion.
The big question surrounding property tax cuts is how they can be done without busting the roughly $12.5 billion spending cap. One suggestion, confirmed as an option by Lt. Gov. Dan Patrick on Tuesday, is the creation of a Property Tax Fund that exists outside of the General Revenue fund. That would create an end-around the cap and allow the one-time appropriation of this surplus sum for this specific purpose. A similar mechanism exists with the State Water Implementation Fund for Texas that divvies out dollars for water infrastructure projects.
Even with that possibility, the actual course down which the Legislature will go remains to be seen. About those options, Abbott said Wednesday, “As it concerns the strategies used to provide that relief, that’s something that we’ll work on during the course of the session.”
“The main thing that taxpayers need to know is that they will receive the largest property tax cut ever in the history of the State of Texas.”
The other wrinkle to this debate is that while $15 billion eclipses the 2006 tax cut and would be the largest ever in terms of raw dollars, accounting for inflation moves that record closer to $20 billion.
Speaker Dade Phelan (R-Beaumont) has focused a lot of his rhetoric on reforming the appraisal system on the back end.
Due to the large surplus, property taxes are once again at the forefront of the Texas Legislature’s session agenda. But this session, the budget bill begins in the House as the two alternate every other biennium.
###
Disclosure: Unlike almost every other media outlet, The Texan is not beholden to any special interests, does not apply for any type of state or federal funding, and relies exclusively on its readers for financial support. If you’d like to become one of the people we’re financially accountable to, click here to subscribe.
Brad Johnson
Brad Johnson is a senior reporter for The Texan and an Ohio native who graduated from the University of Cincinnati in 2017. He is an avid sports fan who most enjoys watching his favorite teams continue their title drought throughout his cognizant lifetime. In his free time, you may find Brad quoting Monty Python productions and trying to calculate the airspeed velocity of an unladen swallow.
