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March 27, 2015 (512) 463-0300

WEEK IN REVIEW

TAX CUT PACKAGE CLEARS SENATE

(Austin) — The Senate approved a series of bills Wednesday that would reduce taxes by $4.6 billion, delivering on Lt. Governor Dan Patrick's early session promise to cut property and franchise taxes. Because Texas doesn't have a statewide property tax, legislators can't reduce the rates directly, but Senator Jane Nelson of Flower Mound authored two measures that would raise the homestead exemption. The value that homeowners can deduct from their yearly property tax bill hasn't been changed since it was set at $15,000 in 1997, and Nelson said now is the perfect time to fix that. "When our economy is healthy, when we have billions of dollars in our coffers, I feel like we ought to give some of that back to the people that sent it to us," she said.

Her bills, Senate Bill 1 and Senate Joint Resolution 1, would tie the homestead exemption to home prices and would allow homeowners to write off 25 percent of the average home price in Texas in any given year. The Legislative Budget Board would set this amount every February. In 2016, that would mean a homestead exemption of more than $30,000. This is projected to reduce property taxes in the state by $2.1 billion over the next two years. Because this change in the law will require an amendment to the state constitution, voters will get a chance to decide on this issue in September.

The other two bills would reduce the franchise tax. SB 7, also by Nelson, directly reduces the overall rate by 15 percent and cuts the EZ Rate, which businesses that make less than $20 million can file under, by 40 percent. The second bill, SB 8 by Georgetown Senator Charles Schwertner, will exempt businesses that make less than $4 million in annual revenue from the franchise levy. Currently, only businesses with less than $1 million in revenue are exempt, but Schwertner said his bill will remove another 61,000 small businesses from the franchise tax rolls while only reducing revenue from that tax by 8 percent.

All four tax measures now head to the House.

Several major issues were before Senate Committees this week. One bill before the Criminal Justice Committee Tuesday would open the door for the use of body cameras worn by police officers statewide. SB 158, by Dallas Senator Royce West, would set forth guidelines and create a grant program to help local police departments pay for the equipment. Some of the guidelines include provisions requiring officers to activate the cameras during any confrontational interaction with members of the public, and mandating that video evidence be retained for 90 days. West said he has worked closely with police, civil rights advocates and other stakeholders in crafting palatable legislation and pledged to continue to work with all interested parties as the legislation moves forward.

The Senate Education Committee considered bills Thursday aimed at creating school choice programs, where public revenue is used to help parents pay for private or parochial education. SB 642, by Houston Senator Paul Bettencourt, would allow businesses to write off donations to non-profit organizations that provide K-12 scholarships to poor- and middle-income families. SB 276, by Senator Donna Campbell of New Braunfels, would create a grant program whereby qualifying families can receive up to 60 percent of the average daily cost of educating a child in public school, about $5200, and apply that to private school tuition. Lt. Governor Dan Patrick appeared before the committee to argue in favor of the bills. "We'll always support public schools," he said, but children in low-income families must have a chance to escape failing public schools just like the children of rich families. Both measures remain before the committee.

The Senate will reconvene Monday, March 30 at 2 p.m.


Session video and all other webcast recordings can be accessed from the Senate website's Audio/Video Archive.

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