Property tax relief is one of the agenda items Gov. Greg Abbott included for the current special legislative session, which ends Aug. 19. In June, Abbott told reporters local governments are imposing too high of property taxes on homeowners.
Abbott cited Harris County’s 2024 tax increases and a proposed 24% tax increase in Austin as examples the bill aims to curb.
The details
Senate Bill 9, by Sen. Paul Bettencourt, R-Houston, would reduce property tax growth from 3.5% to 2.5% and require voter approval for a tax rate exceeding the 2.5% cap. The bill would only affect the maintenance and operations portion of a tax rate.
New construction added to tax rolls would not be affected by the bill, nor would cities and counties with a population under 75,000.
Bettencourt said county and city property taxes are growing about 3% more than school districts’. He added many areas have combined city and county property taxes exceeding school tax bills.
“We’re asking [taxing entities] to tighten your belts,” Bettencourt said during an Aug. 1 committee hearing. “The taxpayers are being pushed to the brink on taxation.”
He also said reducing tax rates could entice more businesses to relocate to Texas, growing property tax bases through economic growth.
The bill is similar to one passed and signed by Gov. Greg Abbott in 2019 that limits property tax collections school districts can levy to 2.5%. Also in 2019, the Legislature reduced property tax growth from 8% to 3.5%.
“This reform slowed the growth of local government revenues and property taxes across the state,” Lt. Gov. Dan Patrick said in an Aug. 6 news release. “Unfortunately, some local governments have exploited taxpayers for more revenue by raising taxes beyond the limits set by the Legislature.”
During the Aug. 1 committee hearing, Jennifer Rabb, president of the Texas Taxpayers and Research Association, supported the bill, saying it would bring greater focus to property tax rates.
Rabb said SB 9 tax rates would appear on voter ballots more often, which could curb increases.
“Tax rates determine tax bills,” Rabb said Aug. 1. “Not appraisals. ... Until we can make the tax rate as clear as appraisals ... I think we will see tax rates continue their upward climb.”
Glenn Hamer, CEO of the Texas Association of Business, supported the bill, saying it encourages smarter budgeting, greater accountability and a more intentional approach to growth.
“We believe this bill encourages local governments to grow their tax base through economic growth, not by raising rates,” Hamer said during the Aug. 1 hearing.
John Zagurski, chief financial officer for the town of Flower Mound, said Aug. 1 the town’s council supports the bill but wants lawmakers to include an exemption for public safety measures such as competitive pay for police officers and firefighters.
On the other side
During the Aug. 1 committee hearing, Hays County Judge Ruben Becerrra said a “one size fits all” solution isn’t the correct solution for property tax relief, and targeted approaches would be more beneficial.
Adam Haynes—policy director for the Texas Conference of Urban Counties, which includes Harris, Dallas and Collin counties—said the bill should allow revenue increases without triggering a tax rate election in years with over 2.5%.
Shannon Halbrook, a fiscal analyst for the progressive nonprofit Every Texan, said local governments rely on property tax revenue for services and need flexibility to respond to community needs.
“We all share the benefits of the services,” Halbrook said Aug. 1. “And therefore we also all share the cost.”
During an Aug. 4 Richardson City Council budget workshop, City Manager Don Magner said if SB 9 becomes law, property tax collections would be reduced by about $750,000. Magner said Aug. 4 that about 42%, nearly $77 million, of the fiscal year 2025-26 budget comes from property taxes.
“The city opposes any measure that compromises its ability to responsibly manage the resources entrusted to it by Richardson residents and businesses,” Magner said in an email. “To that end, we oppose any legislation that seeks to impose a lower revenue cap or otherwise restrict overall expenditures to maintain local control.”
What’s next
SB 9 was sent to the House, which as of press time cannot currently pass bills because of a lack of quorum after more than 50 Democrats left the state to fight an effort to redraw Texas’ congressional districts. This left the 150-member chamber without enough members to conduct official business, and all bills must be approved by both chambers before going to the governor.
Voters will see three proposed amendments to the Texas constitution on the November ballot aimed at providing additional property tax relief passed during the regular legislative session that ended June 2.
Senate Joint Resolution 2 would increase the school district residence homestead property tax exemption from $100,000 to $140,000. Senate Joint Resolution 85 would increase the homestead exemption for elderly and disabled homeowners from $10,000 to $60,000. This measure, combined with SJR 2 would raise exemptions for elderly and disabled individuals to $200,000.
House Joint Resolution 1 would increase the Business Personal Property exemption from $2,500 to $125,000.
Hannah Norton contributed to this article.
