Flanked by a dozen Republican senators, Lt. Gov. Dan Patrick on Tuesday announced a slate of legislation he said would provide lasting tax relief to businesses and homeowners in Texas.
"At the end of the day, the Texas economy stays strong if people have more money in their pocket, if businesses have more money to create jobs," said Patrick, a Republican.
Patrick said three recently filed bills — Senate Bills 1, 7 and 8 — would deliver a combined $4.6 billion break from the state's property and business taxes.
About $2.5 billion of that total would go toward increasing homestead exemptions from school property taxes. Currently set at $15,000, they would instead be 25 percent of the median home market value in the state. In 2016, when the median home market value is projected to be $134,500, that could mean as much as a $33,625 exemption.
Another $1.5 billion would stem from reducing the state's franchise tax on businesses by 15 percent.
State Sen. Jane Nelson, the Flower Mound Republican who chairs the upper chamber's finance committee, is carrying both of those measures, along with a resolution that would send a constitutional amendment to voters to enact the property tax break. Nelson said the resolution would also prohibit any future sales tax on real estate.
Yet another proposal, from state Sen. Charles Schwertner, R-Georgetown, would allow more small- and medium-sized businesses to qualify for exemptions from the franchise tax. It exempts businesses with a total revenue of $4 million or less from paying the state's franchise tax, which Schwertner said would apply to 52 percent of the businesses in the state.
Patrick said the proposals represent an initial step toward what he said would be further tax breaks — though he declined to say whether they would come during this legislative session. He also emphasized Gov. Greg Abbott's support of the measures.
"We are so close shoulder-to-shoulder you couldn't put a piece of paper between us," said Patrick, who also noted that a bipartisan group of 24 of the chamber's 31 senators has signed on to the tax relief package.
But there are signs that it may encounter opposition from within Patrick's own party.
“We have got to deal with the major problems of this state before we commit to tax cuts," state Sen. Kevin Eltife, R-Tyler, said in an interview after the announcement. “We have some big ticket items that we can actually resolve this session. I think those needs come first.”
Eltife said he wanted to see a long-range plan to fix the significant shortfalls in state-funded pensions and deferred maintenance on state facilities.
“I think it’s the cart before the horse. We need to go through the budget process and make sure we have those needs addressed in our budget before we commit to cutting $4 billion a year in revenue out of the state budget," he said. "It might work down the road, but I want to see a plan of action for the needs of this state before I commit to cutting taxes.”
Ryan McCrimmon contributed reporting to this story.
