Lawmakers Negotiate Common Ground
on Property Taxes after 2023 Standoff
Capitol Inside
May 5, 2025
Texas House and Senate leaders leaders struck a deal on a property tax relief on Monday with a package that has a $4.6 billion price tag with homeowners as the biggest winners and businesses getting hundreds of thousands of dollars in breaks as well.
The Republican
chairmen of the tax-writing panels, State Rep. Morgan Meyer of Dallas and State Senator Paul Bettencourt of Houston, indicated that the tentative accord revolves on agreements to hold hearings and votes on proposals that originated in the opposite chambers including Senate Bill 4, Senate Bill 23 and House Bill 9.
SB 4 is the big ticket item in the plan with more than $2.7 billion earmarked for an increase in the annual homestead exemption for school taxes from $100,000 to $140,000. SB 23 would spend $1.2 billion to raise the mandatory exemption from $10,000 to $60,000 for homeowners who are 65 or older or disabled - bringing the total ad valorem break for older residents to $200,000.
HB 9
would provide an additional $566 million in relief during the next two years for a hike from $2,500 to $250,000 in exemptions on tangible personal property that is used to produce income.
The preliminary pact is less than half the size of the property tax reduction plan that the Legislature approved during a summer special session in 2023. But the handshake on a middle ground this time around should help legislators avoid a special session this time around after the regular session adjourns four weeks from now on June 2.
The passage of a historic school choice measure and another round of property tax slashing taxes have been lawmakers' top two consensus priorities that had to pass in regular session to prevent a return to the statehouse in June or later this year. But Governor Greg Abbott could consider calling lawmakers back for a special gathering - or threaten to do so - if they fail to negotiate a settlement on bail reform measures that have stalled in the House.
The 2025 regular session has been passive and predictable compared to the Legislature's biennial gathering two years ago when the House voted to impeach Attorney General Ken Paxton on its final weekend after several weeks of secret hearings. Lawmakers had thrown in the towel on property taxes at that point - however - and were prepared to return for a summer session the following month.
Republican Dade Phelan was leading the House until Speaker Dustin Burrows' election to the dais in January. After forcing an impeachment trial on the Senate, House leaders sought to pull a fast one on Lieutenant Governor Dan Patrick and the Senate when they had the chamber approve a tax compression measure on the first day of the first special session before adjourning abruptly for an entire month.
The House and Senate had been at loggerheads on the issue during the 2023 regular session - with Phelan's team pushing a plan with a mandated reduction in appraisal caps as the centerpiece. Patrick vowed to block a bill that relied on appraisal restrictions while touting a big homestead exemption jump as the heart of a package.
But House leaders essentially folded on appraisal caps during a second special session in a near total capitulation to Patrick and the Senate. With the Legislature flush with a $33 billion surplus at the state of the 2023 regular session, its members ponied up more than $13 billion for a record tax relief plan that summer.
Meyer chairs the House Ways & Means Committee while Bettencourt serves as the Senate Local Government Committee chairman.
more to come ...
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