AUSTIN (CBSNewsTexas.com) - Governor Greg Abbott and Lt. Governor Dan Patrick dug in their heels Tuesday in what has become a rare and public showdown over how best to provide Texans with lasting property tax relief.
It comes one week after the House, led by Speaker Dade Phelan, and the Senate, led by Patrick, passed different bills aimed at lowering property tax bills during the first day of a special session called by the Governor.
At a news conference Tuesday afternoon, Patrick said, "I want to be clear, I'm not here to start or continue a fight with the Governor or the Speaker. What I am here to fight for is 5.7 million average homeowners who under the Governor's and House plan get less than under the Senate plan."
Under the bill passed by the House and backed by Governor Abbott, the state would reduce property taxes that are used to pay for public schools and instead use more state funding such as the sales tax and surplus money. Their plan is to keep doing that until the school district's maintenance and operations or M&O portion of your property tax bill is reduced to zero over a ten-year period.
At an unrelated news conference later in the afternoon, the Governor said, "Anytime we use money for an alternative strategy that's taking away money from a clearly articulated goal that Texans want and that's to eliminate the M&O tax forever."
The bill passed by the Senate and backed by the Lt. Governor also includes a provision to reduce the amount of property taxes used to pay for public schools and to use more state revenues, but the Lt. Governor said it's unrealistic to eliminate school property taxes altogether, especially if there's an economic downturn and sales tax revenues decline.
The Senate plan also increases the homestead exemption for most homeowners from $40,000 to $100,000 and from $70,000 to $110,000 for homeowners over 65. Patrick said their plan would give homeowners an extra $700 each year, nearly double homeowners' savings at least starting out.
"People say, 'Dan, can't you negotiate?'" Patrick said. "You want 100 percent, we'll give you 70 percent, give the homeowners 30 percent. That's a negotiation that we are not backing down from, ever in the Senate."
Governor Abbott said the state has tried this strategy before.
"No one has really felt the benefit of that for one simple reason," Abbott said. "Because of inflation of values of homes, that erodes the values of the homestead exemption. What taxpayers would benefit from even more is a complete elimination of that property tax rate altogether."
Abbott said more than two dozen business and tax groups support his plan. Lawmakers have already agreed to provide property owners $17.6 billion in relief, more than half of the state's budget surplus. But until the House and Senate pass the same exact bill, you and other homeowners and business owners are not going to see lower property tax bills.
Abbott said, "We're going to stay focused on this until a solution is reached and so I'll call special session after special session after special session until a solution is reached," Abbott said. "The legislature remains in its first called special session, which lasts 30 days.
The Lt. Governor criticized the House for adjourning last week and leaving the Capitol instead of discussing the legislation.
"They gave the bird to 5.7 million homeowners and said take it or leave it, we're not going to give you a homeowners' exemption."
During the special session, the Governor also asked lawmakers to increase penalties for smuggling people into Texas from Mexico and for operating stash houses.
The House passed its bill last week and the Senate is considering legislation Tuesday night. In response, Cait Wittman, Communications Director for Speaker Phelan issued a statement saying, "The Texas Senate is the only chamber that has not passed property tax reform."
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