In the third attempt this legislative cycle, Phelan and Patrick continue the battle over property tax relief and Abbott introduces a new(ish) topic to the debate.

The clash between the east and west chambers of the Texas Capitol has officially entered its second called special session, as the Senate and House continue their fight over the best approach to providing Texans with long-overdue property tax relief. 

After the first called special session ended on Monday with the Legislature failing to pass property tax relief, Governor Abbott called a second special session on Tuesday in the hopes that another 30 days might bring the issue to rest.

Once again, Abbott charged the Legislature with passing legislation to provide property tax relief “solely” through compressing the school Maintenance and Operation (M&O) property tax rate, something Texans for Fiscal Responsibility and many other fiscal watchdog organizations have been calling for. It should be noted that Abbott left this legislative charge unchanged from the previous special session, despite claims from Lt. Gov. Dan Patrick that Abbott would sign legislation more focused on exemptions.

And in another apparent rebuttal of Patrick, Abbott included a new charge for the Legislature to provide a pathway to eliminating school M&O property taxes altogether — something Patrick has previously described as a fantasy.

In the East Chamber

Despite the governor’s clear insistence that the Legislature pass relief through compression only, and now also provide a path to M&O elimination, Patrick continues to hold fast.

On Tuesday, Patrick issued a statement saying the Senate “will insist upon a homestead exemption” and “pass the same bill that we passed to the House last week.” That bill, now in the form of SB 1, includes raising the homestead exemption from the current $40,000 to $100,000 (temporary savings that, unfortunately, can easily be wiped out with rising inflation and rising appraisals, and which is technically not germane to the governor’s call). SB 1 also compresses school M&O taxes by 10 cents and provides new franchise tax exemptions (also not germane to the call). And in typical fashion, the Senate filed and passed out the bill to send it to their sparring partners on the other side of the Capitol dome, all on the first day of the special session.

One of the only major changes came in the form of an amendment to SJR 1 (the accompanying constitutional amendment for SB 1), which added supplemental pay for public school teachers: $2,000 for teachers in urban areas and $6,000 for rural teachers (another aspect of the Senate plan which is not germane to the governor’s call).

In the West Chamber

Not to be outdone, on the first day the Texas House promptly filed and passed out of committee their property tax plan: HB 1, which is identical to their legislation passed during the first special session. HB 1 is a school M&O compression-only plan, fulfilling the governor’s charge, which provides $12.36 billion in new property tax relief. It still awaits passage out of the full House.

Several members of the House have also filed legislation aimed at eliminating school M&O property taxes, in an effort to fulfill Abbott’s second item on the agenda. One of these is HJR 6 by State Rep. Terry Wilson (R-Georgetown), which would eliminate school M&O taxes after the 2038 tax year.

Other measures aimed at property tax relief and elimination have been filed, such as HB 16 by State Rep. Briscoe Cain (R-Deer Park), which seeks to use surplus state revenue to further compress school M&O property taxes. It remains to be seen if these or other proposals will make it through the House.

Winner?

It appears the two chambers are still deadlocked in their disagreement about property tax relief: Lt. Gov. Patrick insisting on homestead exemptions, while Speaker Phelan and the House press forward with Abbott’s compression, with no end in sight. 

If there is a victory in this, it not only comes in the form of M&O compression being championed by the chief executive, but now property tax elimination receiving the public support and promotion that it deserves. Texans have a right to own their homes, and elimination through compression is the way to get there. 

The question is, how long will the Texas Legislature keep them waiting?