As Texas House tackles property taxes, here’s what to know

By Texas Tribune staff

texastribune.org

The Texas House is expected to tackle its much-anticipated proposal for slowing the growth of property taxes Thursday in what could be one of the lengthiest — and most heated — debates of the 86th legislative session.

House Bill 2 is a top priority for Gov. Greg Abbott. It would attack rising property taxes from two angles. First, the bill aims to retool the property appraisal processand the way that landowners protest those values. Second, it would lower the amount of tax revenues many local governments can collect before seeking voter approval.

Here’s everything you need to know about the legislation:

HB 2 is about tax reform — not tax relief.

That means it’s not designed to lower Texans’ property tax bills, but to constrain how quickly property taxes grow. The latest version of the bill would require voter approval if a local government like a city or county wants to increase their property tax collections by 2.5 percent or more compared to the prior year.

But language added to the bill would also let government entities to go above that threshold in any given year — as long as they average below 2.5 percent during a rolling five-year period.

The Senate’s companion has key differences, but has been languishing.

The upper chamber seemed to be moving at breakneck speed on its version of property tax reform earlier this session. But more than two months after a Senate panel approved Senate Bill 2, the upper chamber has not taken up the measure.

Meanwhile, the House has retooled its bill to exclude community colleges, hospital districts and emergency service districts. The House also stripped language that would apply the election trigger to school districts, which levy the bulk of property taxes across Texas.

Property tax relief could still be coming.

HB 2 is expected to work in tandem with House Bill 3, a separate school finance bill that compresses school districts’ property taxes by 4 cents statewide.

Lawmakers are also backing other bills that would lower property taxes by increasing the amount of exemptions for which landowners qualify. And the state’s three top leaders — Abbott, Lt. Gov. Dan Patrick and House Speaker Dennis Bonnen — announced Wednesday that they are also backing legislation that would increase the state’s sales tax by 1 cent to finance a decrease to property taxes.

Lots of uncertainties loom.

The lower chamber could be dramatically more divided on the legislation than it was with its proposed state budget and attempt to reform school finance. House members have filed 180 amendments, meaning the bill could change in some key ways Thursday. And the Senate could still move on its own version of the legislation, or wait for the lower chamber’s bill and make its own big changes.

The Texas Tribune is a nonpartisan, nonprofit media organization that informs Texans — and engages with them – about public policy, politics, government and statewide issues.

 

This story has been edited for length.

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