After weeks of reportedly contentious negotiations between Texas House and Senate leaders, terms of a $3.8 billion tax relief package impacting homeowners and businesses has been announced.
Both the House and Senate must still pass the measure prior to the legislative session’s June 1 adjournment. It will also require voter approval in November, but the measure is ultimately hoped to provide an estimated $126 annual school property tax break for the average homeowner and a more significant tax reduction for businesses.
Provisions of the package specifically include:
- 25 percent permanent reduction in the business Margins Tax
- $10,000 increase in the Homestead Exemption
- a 60 percent vote of the governing body of any taxing unit wishing to adopt an increase in property taxes that exceeds the effective tax rate
“Texas leaders have come together to advance conservative principles that will improve the lives of Texans and continue to make Texas the model for doing business,” Gov. Greg Abbott said in a statement. “Every dollar businesses and homeowners pay in taxes is a dollar that could be invested in new jobs, higher wages and stimulating the Texas economy.”
Lt. Gov. Dan Patrick termed the agreement “a major achievement” on a “broad spectrum of significant legislation” while Speaker Joe Straus noted how it “will allow the House to vote on tax relief that encourages economic growth.”
Members of the Conservative Texas Budget Coalition shared their views.
Americans for Prosperity-Texas characterized the package as creating “an environment for Texas to remain the beacon of economic freedom.”
“We are pleased that the largest portion of the package follows our research showing that cutting the onerous business franchise tax most benefits Texas from more prosperity and jobs,” Texas Public Policy Foundation Center for Fiscal Policy Director Talmadge Heflin said. “The package also includes much needed relief for homeowners who face the 14th most punitive property tax nationwide. Combining this with a requirement that governing bodies statewide must have a 60 percent vote to raise property taxes above the effective rate, homeowners will benefit from lowering the mounting burden of property taxes.”
“It’s crucial that Texas policy makers continue to invest in growth by keeping taxes low and regulations minimal,” Institute for Policy Innovation President Tom Giovanetti said. “Having done so, we have every reason to expect that the economic future will continue to be bright in Texas.”
“Texas families will benefit from each reform that reduces the scope and size of government,” Texas Eagle Forum President Cathie Adams said.
“We look forward to continued efforts toward lasting property tax reductions and total repeal of the franchise tax,” Grassroots America Executive Director and Chair of the TX Legislature’s TEA Party Caucus Advisory Committee JoAnn Fleming said. “This was a significant first step.”