Texas Scorecard By Luca Cacciatore February 13, 2025
Senators voted unanimously to send the measure to the House.The Texas Senate swiftly passed its first budget item, approving billions in new property tax relief through the homestead exemption and tax rate compression.
Senators voted 30-0 to pass Senate Bill 4 by State Sen. Paul Bettencourt (R-Houston) to provide property tax relief under the Senate’s preliminary budget proposal, SB 1.
Just two days earlier, lawmakers on the Senate Committee on Local Government heard testimony on SB 4 before unanimously sending it to the full Senate.
The measure passed Thursday alongside its companion, Senate Joint Resolution 2, a proposed constitutional amendment that would codify the changes made by SB 4 if voters approve it in November.
“This follows on the passage of SB 2 in 2023—the now record $22.7 billion property tax reduction passed by the Texas Legislature … which included an increase to the current homestead exemption level of $100,000,” said Bettencourt. “It was approved by the voters by an astonishing 83 percent of the vote in 2023. So, we’re back with another increase.”
SB 4 would raise the homestead exemption to $140,000 for adults and $150,000 for seniors and those with disabilities, for an estimated $3 billion in relief designated as contingent in SB 1.
In addition, the measure would approve another estimated $3 billion for school districts already outlined in SB 1 to reduce their tax rates, bringing the average school district tax rate from $0.9766 to $0.9086.
Known as tax rate compression, the process involves “paying down” the school district tax rate with state revenue—largely state sales taxes. For SB 4, this is done to disincentivize tax rate hikes on homeowners in response to the increase in the homestead exemption.
Bettencourt’s office estimates that SB 4’s homestead exemption increase and rate compression would save the average Texas home around $496 in annual school property taxes.
More:
https://texasscorecard.com/state/texas-senate-passes-billions-in-new-property-tax-relief/
