TEXAS, USA — Texas lawmakers have been promising for months to deliver tax relief, and Monday, after months of disagreement, they reached a deal.
“You know, it took a while," Lt. Gov. Dan Patrick said. "It’s a serious piece of legislation impacting every Texas property owner and so we wanted to get it right."
Patrick said the biggest piece of the deal that's worth about $18 billion is giving $12 billion from the state surplus to Texas school districts to reduce property tax rates.
“The average homeowner will see their school property taxes cut by a whopping 41%," Patrick said. "Nothing like that has ever happened before.”
On top of that, homestead exemptions will increase from $40,000 to $100,000, which means the value of your home that can be taxed will be lowered.
So what does that mean for you?
The cost of an average home in Texas is $331,000. With both of those measures, Patrick said homeowners could save anywhere between $1,260 to $1,460 per year.
Over the course of a 30-year mortgage, that can be a lot of money.
“That’s huge," Patrick said. "That’s a college education for maybe one of their children. That’s a great vacation. It’s an extra nest egg when you retire.”
The plan also includes measures that will save money for businesses.
Patrick said businesses will see an average cut of 23% in school tax rates. There will also be franchise tax savings for small businesses and in a new three-year pilot program, lawmakers are testing what they call a "circuit breaker," which Patrick said for any property that doesn't fall under the homestead exemption -- that's less than $5 million -- the appraisal of the property can't go higher than 20% in a year.
Speaking of appraisals, the bill could also add elected seats to local appraisal boards.
“At least the people will feel like they have a voice that they can go to who wasn't appointed, but they are elected," he said.
The deal still needs to pass the House and the Senate before it makes it to the governor's desk for signature.
After that, it will need voter approval in November.