Despite controlling both houses of the Texas legislature by comfortable margins, Republicans are fighting amongst themselves over what form the inevitable property tax break will take. It’s devolved into name-calling between the second and third-most powerful Republicans in the state: Lt. Governor Dan Patrick and House Speaker Dade Pelan (R-Beaumont).
“California Dade wants a California tax plan or a New Jersey tax plan,” Patrick, told Spectrum News on Tuesday. He then waved around a bunch of money like it was a Gallery Furniture commercial (ask your Houston friends).
Phelan is not from California, but invoking the Golden State is Texas Republican slang for high treason, liberalism, or both.
Here is the core of the disagreement. Texas has a $32 billion tax surplus for the fiscal year, largely because of sales tax revenue. Republicans want to spend a huge chunk of that on a property tax relief bill, a key gimme for their constituents who tend to be homeowners more than Democrats. This, they all agree on.
However, the House and the Senate have passed two very different bills. The Senate bill offers $16.5 billion in relief by raising the homestead exemption from $40,000 to $70,000. The House bill instead reduces appraisal caps from 10 percent to 5 percent. What that means is that the longer a person owns a home, the less property tax they will pay over time. New home buyers, though, could get saddled with enormous taxes.
Patrick isn’t completely out of left field in likening the House plan to California’s infamous Proposition 13 that passed in 1978. While it’s undoubtedly been good for people who want to buy and stay in the same home for the rest of their lives, as well as promoting neighborhood stability, it’s had the negative effect of delaying new homebuyers more people stay in their houses. Not surprisingly, the system has generally benefited wealthy white neighborhoods over those of people of color. In many cases, it is cheaper from a tax standpoint to stay in a mansion than to buy a three-bedroom house.
Despite the long history of study on the impact of Proposition 13, Phelan is standing by the House proposal.
“Our proposal is just as popular as the Senate’s proposal,” Phelan said after the House bill passed.
House Republicans have also accused Senate Republicans of falsely inflating the popularity of their property tax bill with surveys done by industry groups with deep ties to the bill’s architect, Paul Bettencourt (R-Houston). It is true that the way the survey was worded does seem to inflict bias on the responders, and the connections between Bettencourt and the survey’s conductors, the Texas Association of Property Tax Professionals, are verifiable.
Meanwhile, Patrick may be playing another game altogether. Stinging from the House rebuke of the school voucher bill he and Governor Greg Abbott have been championing in the Senate, Patrick has declared himself ready to hold up the necessary budget bills in order to get his way on vouchers. This means that the property tax issue, which is already very contentious, may also become a pawn in the fight to send taxpayer dollars to religious schools.