Texas voters decide on homestead exemption increases in constitutional election
AUSTIN (Nexstar) -- On the top of each ballot this election are 17 constitutional amendments voters will need to decide on. A majority of those propositions are related to the state's tax code.
Two of the propositions, 11 and 13, would increase the homestead exemption from $100,000 to $140,000 for the average homeowner, and up to $200,000 for those 65 and older or disabled. The homestead exemption reduces the value of a home that is taxed by local school districts.
The Texas legislature has proposed three separate homestead exemption raises in the past ten years. Each time, Texas voters have approved those increases. In 2015, the homestead exemption was just $15,000.
Raising the homestead exemption is seen as a more equitable way of reducing the property tax burden on Texans. State Sen. Paul Bettencourt, R-Houston, proposed the exemption increase during the regular session this year.
"This is real money buying down real property taxes, and Mr. President, they'll have this for the rest of their lives," Bettencourt said back in February on the Senate floor. He added that schools will not feel the impact if these exemptions are approved. The state would use its budget surplus to offset the nearly $3 billion loss of revenue to schools. He estimates it will save the average homeowner about $363 annually.
Proposition 11 would add an additional exemption amount for seniors and disabled Texans who are living on a fixed income. Some experts have been quoted during legislative hearings that, if approved, the homestead exemption changes would allow between 80% and 90% of seniors to pay $0 on property taxes.
On the first day of early voting, which started Monday, some Texans headed to the polls early to cast their ballot. Sandy and Paul Wattles, a husband and wife from Austin, both brought little slips of paper with them to the poll called their "cheat sheet" that showed how they wanted to vote for the propositions. They both offset each others vote when it came to Prop 13.
Sandy voted yes to the homestead exemption increase because she feels it will help people financially. "I think it helps the unaffordability issue in Austin," Sandy reasoned.
Paul, however, fears it would create a new burden elsewhere. "It's just shifting the tax burden on to other segments of society and they may not be expecting it, and it may hurt overall public services," Paul said.
Some analysts agree with Paul. Chandra Villanueva, the director of budget and policy at Every Texan -- a non-profit that analyzes policy to improve equity in healthcare, education, financial security, and food security -- said creating a permanent exemption in the state constitution could create problems in the future if there is an economic downturn.
"If we see an economic downturn in the future and the state is unable to maintain its commitment to schools, will we be looking at cuts to our school funding," Villanueva questioned.
She said the overarching concern in her eyes is the state weakening its sources of revenue. She compares taxation in other states as a three-legged stool: income tax, property tax, and sales tax. Texas does not have an income tax.
"When you start shaving away at the property tax over and over again, it just puts a greater reliance on the sales tax. The sales tax is our most regressive tax and it's the most volatile," Villanueva explained. She also added none of the 10 propositions on the ballot that deal with taxation help renters.