Abbott again called for the “largest property tax cut in Texas history,” a phrase he first used back in September. At the time, he wanted to use “at least half” of the then-projected $27 billion treasury surplus to compress local school district tax rates.
That estimate grew to $32.7 billion in the Texas comptroller’s update earlier this month.
In his speech, Patrick called for an increase in the business personal property tax exemption to $100,000 — providing a reduction in the taxable value of businesses’ inventory and other tangible property. That exemption currently sits at $2,500, increased in 2021 from $500 by Sen. Paul Bettencourt’s (R-Houston) Senate Bill 1449. Both officials have expressed their desire to ensure Texas remains a business-friendly state, and reforming business taxation is a central part of that.
But Patrick shed light on something not previously mentioned with any specificity: he intends to increase the state’s standard homestead exemption to $70,000. At his November press conference during which a broad priority slate was announced, Patrick stated the exemption should be increased — without giving hard numbers.
But now a concrete figure has been named. Since Abbott and Patrick first took office, the homestead exemption has grown from $15,000 to $40,000 and, if all goes according to Patrick’s plan, will nearly double later this year.
That would be on top of any reduction caused by state compression. In addition to funds appropriated from the projected surplus, the state earmarked $3 billion in federal coronavirus aid for compression this year.
Much of House Speaker Dade Phelan’s (R-Beaumont) property tax-related rhetoric has focused on shaking up the appraisal process.
Not mentioned at the inauguration was any concerted plan to move the state off of its current property tax-heavy system.
Abbott has previously indicated support for eliminating the school district Maintenance & Operations rate, the largest component of property tax bills in Texas. But so far there is little indication that reform beyond compression, exemption growth, and appraisal system shake-up is on the agenda.
Correction: A previous version of this article misstated the current business personal property tax exemption. We regret the error.
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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.