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Texas Legislature 2019

As Texas House tackles property taxes, here's what to know and how to watch

The lower chamber was expected to debate House Bill 2, legislation that aims to slow rising property taxes in Texas.

Texas State Capitol, June 12, 2017. State Capitol in the late afternoon on June 12, 2017.

Texas Legislature 2019

The 86th Legislature runs from Jan. 8 to May 27. From the state budget to health care to education policy — and the politics behind it all — we focus on what Texans need to know about the biennial legislative session.

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Last Thursday was supposed to be when the Texas House tackled its much-anticipated proposal for slowing the growth of property taxes in what could have been one of the lengthiest — and most heated — debates of the 86th legislative session. But that never came to fruition, as House leadership opted to postpone debate to Monday while the Senate worked out their own property tax game plan. You can find our write-up of what went down Thursday here.

House Bill 2 is a top priority for Gov. Greg Abbott. It would attack rising property taxes from two angles. First, the bill aims to retool the property appraisal process and the way that landowners protest those values. Second, it would lower the amount of tax revenues many local governments can collect before seeking voter approval.

HB 2 is about tax reform — not tax relief.

That means it’s not designed to lower Texans’ property tax bills, but to constrain how quickly property taxes grow. The latest version of the bill would require voter approval if a local government like a city or county wants to increase its property tax collections by 2.5 percent or more compared to the prior year.

But language added to the bill would also let government entities to go above that threshold in any given year — as long as they average below 2.5 percent during a rolling five-year period.

The Senate’s companion has key differences but has been languishing.

The upper chamber seemed to be moving at breakneck speed on its version of property tax reform earlier this session. But more than two months after a Senate panel approved Senate Bill 2, the upper chamber toyed with taking up the measure on Thursday, though Senate leadership couldn't whip enough support to bring it to a floor vote.

Meanwhile, the House has retooled its bill to exclude community colleges, hospital districts and emergency service districts. The House also stripped language that would apply the election trigger to school districts, which levy the bulk of property taxes across Texas.

Property tax relief could still be coming.

HB 2 is expected to work in tandem with House Bill 3, a school finance bill that compresses school districts’ property taxes by 4 cents statewide.

Lawmakers are also backing other bills that would lower property taxes by increasing the amount of exemptions for which landowners qualify. And the state’s three top leaders — Abbott, Lt. Gov. Dan Patrick and House Speaker Dennis Bonnen — announced Wednesday that they are also backing legislation that would increase the state’s sales tax by 1 cent to finance a decrease in property taxes.

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