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Gov. Greg Abbott signed an $18 billion tax cut for Texas property owners and sent the proposal to voters for approval later this year.
The policy would allocate $12.6 billion of the state's historic budget surplus to reduce school taxes for all property owners, lowering property taxes by more than 40% on average for approximately 5.7 million Texas homeowners. , which offers entirely new tax savings to small businesses and other businesses. Commercial and non-homestead real estate.
Mr. Abbott on Saturday signed into law Senate Bill 2, the property tax cut bill, and Senate Bill 3, the franchise tax cut bill, passed by the Texas House two weeks ago after months of negotiations by top Texas Republicans. Ta.
A third bill, House Joint Resolution 2, will be presented to voters in the November constitutional election. Voters must approve the package for the cuts to take effect by the end of the year.
The effort is part of Abbott's 2022 re-election campaign, although the state has some of the highest property taxes in the nation and lawmakers are under intense political pressure to alleviate the economic hardships of their constituents. It became the basis of most state legislators' campaigns.
The centerpiece of the package is a $5.3 billion expansion of the state's homeownership exemption, the amount of a home's value that cannot be taxed for public school tuition, from $40,000 to $100,000. The new exemption, combined with the school tax cut, would save homesteaders (Texans who live in homes they own) an average of $1,300 a year in property taxes, said the bill's sponsor, Republican Paul Paul from Houston.・State Sen. Bettencourt said. Senate.
It also offers additional cuts to seniors and disabled property owners, saving them an average of about $170 a year, Bettencourt said.
The most innovative part of the plan, introduced publicly for the first time on Monday, is an idea that would create the first-ever temporary 20% cap on assessed value increases for properties valued at $5 million or less that are not considered homesteads. That's what it is. These include second homes, vacation homes, rental homes, and commercial retail or business properties.
Including more than $5 billion approved four years ago, the law also allocates nearly $12.6 billion to reduce the school property tax rate for all homeowners and commercial properties by 10.7 cents per $100 of valuation. .
These billions of dollars could be sent to school districts, reduce taxes for all property owners, and shift some maintenance costs to the state. But the policy provides no new funding for schools, and critics point out that Texas ranks near the bottom in education funding per student compared to other states' spending. This has become a troubling point.
Tax cuts for the state's 3.7 million renter households are excluded from the proposal that passed both chambers.
House Democrats have tried unsuccessfully to push through their own tax cuts, including one sponsored by Dallas Rep. John Bryant that would give tenants cash refunds worth up to 10% of the rent they paid in the previous year. did. It would also increase Homestead's exemption by $200,000, doubling the exemption amount in the current bill, and also include increased teacher pay and additional school funding.
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