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Texas lawmakers are moving closer to approving a sweeping property tax relief package to ease financial pressure on homeowners nationwide. On Tuesday, the Texas House of Representatives unanimously approved a set of bills that would substantially increase homestead exemptions for property taxes tied to public school funding, the single largest line item on many Texans’ tax bills.
The centerpiece of the proposed reforms, Senate Bill 4, would raise the state’s school tax homestead exemption from $100,000 to $140,000, a change that could translate into hundreds of dollars in annual savings for the average homeowner. A companion bill, Senate Bill 23, would boost the exemption for seniors and residents with disabilities from $10,000 to $60,000.
Both bills, authored by Republican Sen. Paul Bettencourt of Houston, are top priorities for Lt. Gov. Dan Patrick and must still pass a final House vote, which is expected Wednesday. Any House amendments will also require approval from the Senate before the legislation can reach Gov. Greg Abbott’s desk.
“This is a clear win for Texas homeowners,” said Bettencourt. “It’s meaningful, targeted relief that addresses a long-standing financial burden.”
Business Inventory Tax Cuts Also in the Mix
The legislative package includes relief for business owners as well. House Bill 9, sponsored by Rep. Morgan Meyer (R-University Park), would exempt up to $125,000 of business inventory from taxation by local governments. Texas is one of the few states that taxes business inventory, a policy many argue penalizes economic growth and competitiveness.
The Senate approved the bill last week, and the House followed suit Monday by endorsing changes proposed by the upper chamber. Lawmakers say the measure balances relief for homeowners with targeted business incentives designed to attract and retain employers across the state.
Negotiations and Compromises
Not all proposals made it into the final package. A push by more conservative House members to raise the standard homestead exemption even further to $160,000 was rejected. Advocates of the failed amendment argued that the state’s $24 billion budget surplus could have easily covered the additional cost.
However, more moderate lawmakers countered that the budget only allocates enough funds to support the $140,000 exemption threshold. Lawmakers estimate that under the current proposal, the owner of a $302,000 home, approximately the median home value in Texas, would save over $500 annually on school property taxes, combined with $3 billion in rate cuts in the upcoming two-year budget.
Voters to Have Final Say in November
Despite bipartisan support, no proposed tax changes will take effect unless Texas voters approve constitutional amendments in a statewide referendum this November. Legislative action alone is insufficient because property tax rules are enshrined in the state constitution.
“Ultimately, the people of Texas will decide whether this relief becomes reality,” said Rep. Meyer. “And I’m confident they’ll say yes.”
Long-Term Budget Questions Linger
While the short-term benefits of the tax plan are widely celebrated, questions remain about the long-term sustainability of the state’s aggressive tax-cutting strategy. Texas lawmakers plan to spend $51 billion over the next two years on property tax relief, raising concerns among budget hawks and fiscal watchdogs.
Some Republican legislators have expressed concern that dipping too deeply into the surplus to fund permanent tax cuts may create future shortfalls, especially during economic downturns.
“We’re making promises that may not be sustainable,” one Republican lawmaker noted privately. “We need to be careful about overcommitting.”
A More Unified Legislature This Time Around
This year’s consensus sharply contrasts with 2023, when efforts to pass a similar tax-cut package collapsed amid the House and Senate infighting. That failure forced Gov. Abbott to call two special sessions to hammer out a deal.
With elections looming and property taxes consistently topping the list of voter concerns, the current legislative session has seen more unity, urgency, and political will to get a deal done.
Texas homeowners could soon see tangible relief from rising property tax bills, pending final legislative steps and voter approval in November. As one of the most populous and rapidly growing states in the U.S., Texas continues to use its fiscal muscle to pursue bold, taxpayer-focused policies even as it navigates the trade-offs of long-term affordability and economic responsibility.
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