Austin, TX – Senator Paul Bettencourt (R-Houston) explains two propositions that will be on the May 2022 ballot across Texas as set by Governor Abbott. Voting for Proposition 1 supports amending the state constitution to authorize the state legislature to reduce the property tax limit for school maintenance and operations taxes imposed on the homesteads of elderly or disabled residents to reflect any tax rate reduction enacted by law from the preceding tax year. The effective date will be January 1, 2023, contingent on voter approval of the constitutional amendment prop 1. Voting for Proposition 2 supports increasing the homestead exemption for school district property taxes from $25,000 to $40,000. The effective date will be January 1, 2022, contingent on voter approval of constitutional amendment prop 2.
“Property tax relief has been one of my top priorities since I was elected to the Texas Senate in 2014. These bills will provide over $600 million in relief per biennium to homeowners for first year homestead exemptions and those over 65 or disabled freeze value. These propositions will be voted on by the public on May 7, 2022,” stated Bettencourt.
Proposition 1 ballot title is as follows, “The constitutional amendment authorizing the legislature to provide for the reduction of the amount of a limitation on the total amount of ad valorem taxes that may be imposed for general elementary and secondary public school purposes on the residence homestead of a person who is elderly or disabled to reflect any statutory reduction from the preceding tax year in the maximum compressed rate of the maintenance and operations taxes imposed for those purposes on the homestead.” The intent is to give property owners over the age of 65 and or disabled the benefits of the state’s compressed tax rate for school maintenance and operations (M&O). If approved by voters, this amendment would reduce the approximate 2 million exemption holders school tax bill, on average, $110 the first year and by $124 the second year. If this Constitutional amendment is approved, the provisions of Senate Bill 8 (SB 8) of the 2nd special session would become effective. SB 8 would amend Chapter 48 of the Education Code so that school districts would not lose revenue. The bill would recalculate school district tax limitations (tax ceiling) on residence homesteads for individuals who are over 65 or disabled to reflect reductions in school district maximum compressed tax rates for 2019 and subsequent tax years. School districts, ISDs, would be entitled to additional state aid to the extent state aid under the current formulas does not fully reimburse them for the tax revenue losses. Because of the complexity of the over 65 and disabled exemptions, some homeowners with the over 65 or disabled exemptions won’t see the full benefits until additional legislative action is taken in 2023.
“People see the need for property tax relief. On behalf of the 4.5 million homeowners of Texas, I want to thank Lieutenant Governor Patrick for making these Senate bills a priority,” said Bettencourt.
Proposition 2 ballot titles is as follows, “The constitutional amendment increasing the amount of the residence homestead exemption from ad valorem taxation for public school purposes from $25,000 to $40,000.” The intent is to help homeowners by increasing the homestead exemption amount by $15,000 per year. The average homeowner will pay $180 less in school property taxes using the statewide average rate of $1.21/$100 of value as a result. This amendment would raise the homestead property tax exemption from $25,000 to $40,000. This amendment, if approved by voters, would amend the Tax Code to increase the mandatory homestead exemption for ISDs. This proposition would amend the Education Code to entitle school districts to additional state aid to the extent that a district’s combined state and local revenue used to service eligible debt after the homestead exemption increase would be less than the state and local revenue that would have been available for debt service had the homestead exemption not increased.
Senator Bettencourt appreciated working with the House Ways and Means Chairman, Representative Morgan Meyer, for his support as House Sponsor of both sets of bills.