The Senate Finance Committee will hold a hearing Wednesday on the chamber's main three bills aimed at reducing property taxes. The combined proposals, if passed, would account for just over half the state's record surplus of $32.7 billion.
Houston Senator Paul Bettencourt said the combined tax relief from Senate Bills 3, 4, and 5 would reach $16.5 billion. The major components would include an increase in the homestead exemption to $70,000 up from the current level of $40,000. Bettencourt said seniors would get even more relief.
"We're now going to triple the over-65 exemption for school taxes from $10,000 to $30,000," Bettencourt said. "They're getting $100,000 of exemptions, and that's going to stay with them for the rest of their lives."
Senator Tan Parker of Flower Mound laid out additional tax benefits to small business owners.
"The business personal property tax, which we are taking that de minimis exemption, which is at $2,500 today, we are taking up to $25,000, so an extraordinary increase that will benefit so many businesses," Parker said. "And then, we hear so much from the business community about the importance of reducing the inventory tax, and in fact, we're doing that as well." Parker said businesses would see their inventory tax bill decrease by 20% under SB 5.
Bettencourt and Lieutenant Governor Dan Patrick criticized the main House property tax bill, House Bill 2 as counterproductive. HB 2 aims to provide more than $12 billion in property tax relief by capping the growth in the appraised values of real property at 5% per year, down from the current limit of 10%.
"If you lower the appraisal cap," Patrick said, "The tax rate will go up, and in a few years, we will have destroyed everything we've done."
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