Gov. Abbott stands by plan to lower property taxes, impasse persists with Senate

AUSTIN (Nexstar) — Gov. Greg Abbott spoke unwaveringly in support Friday of his preferred plan to lower property taxes in Texas, which means the impasse holds over reaching a deal with what the Senate and Lt. Gov. Dan Patrick would like to do.

During a post-session chat at the Texas Public Policy Foundation, Abbott said he still supports the approach passed Tuesday by the Texas House of Representatives, which would direct the state to spend $12.3 billion on "compression." That simply means the state would buy down school district property tax rates and foot the bill for the taxpayer.

The governor said Friday this would help toward reaching the goal of driving down school property rates to zero. He noted the state is receiving increasing amounts of revenue from sales and franchise taxes due to population and business growth.

"Texans want to own their own property, not rent it from government," he said. "We must provide that by eliminating property taxes in Texas."

Abbott never mentioned Patrick by name Friday, but a public clash played out this week between the two top Republicans over their differing property tax proposals. At the very same venue Tuesday, Patrick gave a boisterous speech slamming House Speaker Dade Phelan and promising to "not back down" from the Senate's plan for property tax relief.

However, Abbott floated the possibility of bringing back lawmakers for multiple special sessions until his preferred plan is adopted.

"I can't tell you when property taxes will be resolved," Abbott said, responding to an audience member's question about whether the legislature will enact school choice measures this year.

The Texas Legislature, which finished its regular session Monday, already set aside $17.6 billion from the state's budget to give Texans property tax relief. However, ideological differences between the two chambers about how to deliver that stalled lawmakers Monday from adjourning. They inevitably gaveled out sine die, or indefinitely, without a deal.

Hours later, Abbott called them back for a first special session with demands for lawmakers to strike a deal on property tax relief by means of compression, as well as a call for action on border security legislation.

Tax rate compression

The Texas House agreed spending $12.3 billion on “compression", which, again, means the state would buy down school district property tax rates and foot the bill for the taxpayer. Combined with the approved state budget, the House plan would dedicate $17.6 billion to lower local tax rates by another sixteen cents.

Currently, school tax rates for maintenance and operations are $0.91 per every $100 of a home’s valuation. House Bill 1 of the first special session would drop that to $0.64 next year.

Homestead exemption increase

The Texas Senate unanimously passed legislation Tuesday to offer some tax compression in addition to raising the homestead exemption to $100,000. The homestead exemption refers to the amount of your home’s value you can deduct from the taxable value. For example, the current homestead exemption is $40,000, so an owner of a $300,000 home pays taxes on only $260,000.

The Senate argues this plan would prioritize homeowners over business property. The upper chamber's property tax guru, Republican Sen. Paul Bettencourt of Houston, anticipates it would save the average homeowner more than $2,500 over two years.

While Patrick and Phelan are known to have a fractured relationship, public disagreement between Abbott and Patrick is rare.

Of his relationship with Phelan, the lieutenant governor said Tuesday that the two legislative leaders hardly talk.

"I haven't talked to him in two years, except to say hi," Patrick said.

Tensions between Texas' top two Republicans came to a surface this week, with Patrick going on a media blitz making remarks against one another's plans on social media and talk radio. Abbott's social media comments were less pointed directly at Patrick, but he did boast about his compression plan over other proposals.

Phelan's move to adjourn the House sine die Tuesday for the special session left Patrick with two options — pass the House’s versions of the bills or pass nothing, since House members cannot meet for the rest of the special session after adjourning.

Education savings accounts

Abbott reiterated Friday that future special sessions will focus on finally enacting what he called "school choice." He said the bill he'd support would not only create education savings accounts, which are referred to often as school vouchers, but also eliminate the STAAR test. Efforts to pair those proposals failed to advance during the regular legislative session because of opposition from Democrats and mostly rural Republicans.

"I will never relent. I will never give up," Abbott told the crowd at the conservative thinktank. "We will have a special session coming up after —after — we get property tax reform fixed, where we will dive into and work on and pass school choice in the state of Texas."

This is a developing story, check back for updates. Capitol Correspondent Monica Madden will have a full report on KXAN at 5 p.m. Ryan Chandler contributed to this report.