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Lt. Gov. Dan Patrick defiantly refused to exclude a homestead exemption from the Senate’s property tax cut plan Tuesday — even though the House adjourned a week ago after rejecting the provision. The protracted impasse on property tax relief means the odds grow dimmer every day that the Senate will send legislation to the governor’s desk by the end of the special session later this month.
“This fight’s over,” Patrick, a Republican who presides over the GOP-dominated Senate, told reporters in a news conference at the state Capitol on Tuesday. “That’s a negotiation that we are not backing down from, ever, in the Senate.”
His comments came hours after a Senate committee signaled that it would reject a Texas House bill targeting human smuggling that passed a week ago, which could effectively kill that bill, too. Property taxes and immigration are the sole topics Gov. Greg Abbott wants lawmakers to tackle during the current special session.
Patrick spoke amid escalating tensions with House Speaker Dade Phelan and Abbott in the second week of the special session, triggered by differences on how to dole out $12.3 billion in new money set aside for property tax cuts in the upcoming two-year state budget.
Abbott wants a plan that spreads the entire tax cut among all property owners in Texas, including businesses, and does not include a homestead exemption. He outlined such a plan in his requirements for any property tax bill that lawmakers send to his desk during the special session.
In spite of those instructions, the Senate unanimously passed its own plan last week that spreads 70% of the money among all property owners, then puts the rest of it toward a bump in the homestead exemption, which would lower the amount of a home’s value that can be taxed to pay for public schools and cut homeowners’ tax bills. The current homestead exemption on school taxes is $40,000. Patrick wants to raise it to $100,000.
Both plans would save landowners money on property taxes. The Senate plan offers more relief to people who own their primary residence than the House plan does. The House helps businesses and higher-income property owners more than the Senate plan does. It’s unclear how renters would benefit from either proposal — if at all.
Time is more of an issue with the Senate plan. Homestead exemptions are protected by the Texas Constitution, so their proposal would need to go to voters in November for it to become law for the next tax year — and therefore it needs to be passed with enough time to get it onto the ballot, Patrick said.
“There’s a time limit,” he said. “We have to get this done.”
Rather than stick around to negotiate, however, the House passed bills that mirrored Abbott’s instructions last Tuesday — and then adjourned and went home for the rest of the 30-day session.
Because the House needs to be in session to approve any changes the Senate makes to their bills, that left the Senate with the choice of either passing the House bills untouched or adjourning and going home themselves — which would almost certainly trigger a second special session.
Although Texas has a reputation as a low-tax state, Texans’ property tax bills are the sixth-highest in the country, according to the conservative Tax Foundation.
With a massive $32.7 billion surplus at their disposal, Republican lawmakers made big promises this year to throw billions of dollars into property tax relief — with Abbott pledging to use half of the surplus for tax cuts.
In the budget for the next two-year cycle that starts in September, lawmakers set aside $12.3 billion for new property tax cuts and $5.3 billion to pay for cuts already passed in the last session.
On Tuesday, as the Senate sent strong signals that neither of the House bills would go anywhere as long as the House was away, Patrick declined to fold.
“They can come back. I encourage them to come back,” Patrick said.
Speaking at a bill signing Tuesday afternoon, Abbott again called on the Senate to follow the House’s lead and pass his preferred property tax plan.
The governor declined to answer whether he would accept a compromise with the Senate that includes some form of increased homestead exemption, but said he would keep legislators in Austin for as long as necessary to strike a deal.
“I’ll call special session after special session after special session until a solution is reached,” Abbott said.
The refusal of the Senate to rubber stamp the bills described by Abbott and passed by the House jeopardizes both pieces of legislation because the House has to be in session to approve any changes to their bills.
“Today, for example, we’re working on the border bill, the smuggling bill, and there are some flaws in that bill that we have to send back to the House to fix so we can send it to the governor,” Patrick said. “But we have no one to work with. The Senate continues to work and the House continues to stay home.”
Last Tuesday — the only day House members met in a floor session — the House approved House Bill 2 by state Rep. Ryan Guillen, R-Rio Grande City, to increase the minimum sentence for someone convicted of smuggling people or operating a stash house to 10 years under state law. That would drop to five years if the defendant cooperates with police or if a person convicted of smuggling is related to the person being smuggled, but it could jump to a minimum of 15 years under certain circumstances.
The only path for that bill to get to Abbott’s desk without the House returning to the Capitol is the one of zero resistance from the Senate.
But on Tuesday, Sen. Brian Birdwell, R-Granbury, the chair of the Senate Border Security Committee, said during a committee meeting that HB 2 has “significant challenges” and it’s “not my intent to vote it” out of committee.
In the hearing, senators said they took issue with a provision the House included in the bill that dropped the minimum sentence to five years for defendants who are related to the person being smuggled.
The Senate committee then voted 4-1 to send Senate Bill 5 by Sen. Pete Flores, R-Pleasanton, to the full upper chamber. That bill is similar to HB 2 but without the provision that caused committee members to balk.
Cait Wittman, a spokesperson for House Speaker Phelan, tweeted on Tuesday that the Senate had previously approved the same measure during the regular session.
“They were for it then, why not now?” Wittman tweeted.
On Tuesday evening, Birdwell's committee met again and, in a 3-1 vote, passed a substituted version of HB 2 that did not include the lowered sentence for defendants accused of smuggling family members. Yet with the House adjourned, the bill is dead on arrival.
The committee also passed two other immigration bills.
Senate Bill 2, which passed on a 3-2 vote, would make it a state crime to illegally cross the Texas-Mexico border between ports of entry. Senate Bill 8, which passed on 3-2 vote, would create a border force made up of commissioned law enforcement officers to target smuggling of migrants and drugs along the Texas-Mexico border.
Those bills also have no chance of becoming law because the House did not pass similar legislation and isn’t in session to consider those bills.
After Patrick’s comments Tuesday, in which he said the Senate would never support the House property tax plan without adding a homestead exemption, Wittman blamed the upper chamber for holding up property tax relief for Texans.
“The Texas Senate is the only chamber that has not passed property tax reform and border security legislation in a way that is germane to Governor Abbott’s special session call,” Wittman said. “The House has passed the largest property tax cut in state history three times this year. In the special session the House came to work, passed its bills with bipartisan support — and adjourned. The Senate is keeping Texans waiting.”
Wittman, speaking for Phelan, also declined to back down — challenging the Senate to pass the House plans the way they received them.
“We encourage the Senate to follow the House’s lead so that Texans can have the property tax relief and the secure border they deserve,” she said.
Zach Despart and William Melhado contributed to this report.
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