88th LegislaturePoll on Dueling Property Tax Reform Plans Causes Stir in Texas Legislature Ahead of House Vote

Released by the Texas Association of Property Tax Professionals (TAPTP) — an organization whose goal is to “advanc[e] the professional practice of property tax consulting through education and high ethical standards” — the poll asked respondents about the Texas House and Senate’s competing plans to tweak the appraisal side of the property tax equation.

The Senate’s plan, authored by Sen. Paul Bettencourt (R-Houston), would increase the school district homestead exemption by $30,000, the elderly and disabled homestead exemption by $20,000, and the business personal property tax exemption by $22,500, along with the creation of a business inventory tax credit. Bettencourt’s strategy will require more state funding to continue raising the exemption, lest the appraisal increases over the years reduce the exemption increase’s impact.

Similar homestead exemption increases passed both the Legislature and the statewide ballot last year by a wide margin.

The House’s plan, authored by Rep. Morgan Meyer (R-Dallas), would lower the current year-to-year homestead appraisal cap from 10 percent to 5 percent and extend it to all property, including businesses. Under the bill, when a property is sold its taxable value is reset to the market value, at which point the cap begins again for the new owner.

The Senate’s proposal has already passed the upper chamber and awaits movement in the House, while the lower chamber’s blueprint is scheduled for its first floor vote on Thursday.

Both chambers have been locked in a tense dispute over which model to pair with the larger component of rate compression — with neither budging so far.

TAPTP, which is supportive of the Senate’s version, released the poll two days before the House will consider its plan.

Lt. Gov. Dan Patrick tweeted in response to the release, “A new poll shows Texans strongly prefer the Senate tax plan to increase Homestead Exemptions over the House’s plan to cap appraisals. Texans know the Senate plan will provide real, significant property tax relief for all taxpayers.”

Bettencourt told The Texan, “Trying to recognize the obvious, the public has already voted for homestead exemption increases 85 to 87%! It’s a historical fact so the polls 82% isn’t wrong. Everyone should see that clear as the bills passed unanimously.”

The association is also sending texts criticizing the lower chamber’s plan to House members’ districts and telling voters to call their representative’s office and ask them to vote against the bill. It opens with, “The Texas House is considering a vote on appraisal caps, modeled after California’s property tax system which has led to a massive housing shortage, skyrocketing home prices, increased homelessness, and among the nation’s highest cost of living.”

The poll, its questions, and the following advocacy texts rubbed members of the lower chamber raw.

“We can debate the preference on the preferred method of property tax relief, but what TAPTP is doing (robotexts into member’s districts) is over the top,” Burrows told The Texan, “and, you have to ask: Why?”

“Are they concerned if taxpayers have less of a reason to protest valuations under HJR1 then their members will lose money?”

TAPTP did not return a request for comment.

Various other House members and staffers echoed Burrows’ similarly fashioned tweet. Meyer did not return a request for comment but was among those who “liked” Burrows’ tweet.

In its release, TAPTP said the survey, conducted by pollster Mike Baselice, found “More than four out of five likely voters in Texas support SJR 3 — a measure to increase the Texas homestead exemption to $70,000, and to increase the exemption for seniors and disabled homeowners to $100,000.” 

Baselice is often contracted by Patrick’s campaign to conduct various polls, along with multiple other state officials.

“Specifically, voters support SJR 3 by a 70-point margin — 82% in favor to 12% opposed. At a smaller 42-point margin, voters support reducing the cap on appraisal increases to 5% in HJR 1 (67% in favor to 25% opposed).”

According to the poll, voters would overwhelmingly pass both proposals, and in its initial head-to-head question, the Senate’s plan topped the House’s by 7 points. 12 percent of respondents were unsure on the question.

The poll then asked the same head-to-head question in other variations that include projected tax bill savings estimates for each plan.

But according to pictures of the survey’s other questions obtained by The Texan, the wording was more loaded.

One prompt about the House’s plan reads, “This measure adopts California’s property tax law which led to the largest divide between rich and poor in the nation with older, higher income property owners getting the biggest tax breaks while lower income and younger people pay significantly more in taxes than they otherwise would without an appraisal cap.”

It then asks the respondent to gauge whether that statement alters their position on the plan.

“This measure cuts $10 billion from school budgets and will result in Texas students falling behind students in other states,” another prompt reads.

And another posits, “This measure violates important protections in the Texas constitution that require property taxes to be fair and uniform. Under this measure, people who own similarly valued properties will pay dramatically different property taxes.”

These were all arguments made by opponents of the House plan during the chamber’s lengthy committee hearing back in March. The full array of businesses, industry lobbyists, and activists weighed in on the two plans during that hearing, coming down on different sides of the debate.

The disagreement has burned hot over a relatively small but significant component of the overall property tax relief item.

Proponents of the Senate’s version estimate passage of their plan will save the average Texas homeowner $798 after it’s implemented, compared with what their tax bill would have been without the increase.

Proponents of the House’s version estimate it will result in $542 in savings for the average homeowner, again compared to what their bill would have been without the reform. Speaker Dade Phelan (R-Beaumont) penned an op-ed in the Houston Chronicle defending his chamber’s plan.

Opponents of the Senate plan criticize it for continuing the current practice of excluding businesses from the appraisal cap, whose values rise and fall commensurate with the actual market value of their property. While year-to-year home values can only rise up to 10 percent — seriously limiting the fluctuation in taxable value in a chaotic market — businesses have no such limitation.

They also say that while exemption increases must be followed up subsequently to account for rises in appraisals, the cap is permanent and doesn’t require an influx of state dollars to compensate for the reductions in the school finance system like does the exemption strategy.

Rather than the cap expansion, the Senate’s plan would increase the business exemptions and provide for a $400 million per year total inventory tax credit.

Opponents of the House plan say that the cap extension shifts the school finance burden toward homeowners, more so than they currently face, and that it “distorts” more of the real estate market by untying most tax payments from the actual value of the property — using California as an example of the issues it may cause.

Rep. Chris Turner (D-Grand Prairie), the only “no” vote on the House’s plan in committee, said he opposes the option because the cap’s reset provision would “shift the burden to [first] time homebuyers.” Under the plan, two neighboring homes largely commensurate in market value could draw substantially different tax bills depending on the time of ownership.

It’s a dispute that’s drawn many fierce arguments for and against, but it’s moved from a policy difference to something more.

Both sides are sticking to their guns, and a compromise must be reached by May 29 when the Legislature’s 88th Regular Session adjourns. Otherwise, the possibility of a special session significantly increases.