Texas Senate Bill SB278

Texas 2015 - 84th Regular

Caption

Relating to an increase in the amount of the residence homestead exemption from ad valorem taxation by a school district and the increase of the exemption amount in subsequent years to reflect inflation, a reduction of the limitation on the total amount of ad valorem taxes that may be imposed by a school district on the homestead of a disabled or elderly person to reflect the increased exemption amounts, and the protection of school districts against the resulting loss in local revenue.

Impact

This legislation aims to provide financial relief to homeowners, particularly elderly and disabled individuals, by limiting the amount school districts can tax their homesteads. It specifically prohibits any increase in the total amount of ad valorem taxes imposed on the residence homesteads of individuals over 65 or disabled beyond the tax rate of the first year they qualified for the exemption. This element is expected to stabilize the financial obligations of vulnerable homeowners against the pressures of potential tax increases in subsequent years.

Summary

SB278 proposes an increase in the amount of the residence homestead exemption from ad valorem taxation imposed by school districts. The bill mandates an initial exemption increase, specifically raising the exemption from $15,000 to $25,000 for the 2016 tax year. Furthermore, subsequent exemption amounts will be adjusted annually based on the rate of inflation, ensuring that the benefits of the exemption keep pace with rising costs. The adjustments are to be calculated by the state's comptroller each year, and the newly established exemption amount will be published in the Texas Register by March 15 each year.

Contention

While SB278 is designed to benefit homeowners, it has been met with concerns regarding its impact on school districts' revenue. The bill includes provisions for the protection of school districts against financial losses that may result from the higher exemption rates. Proponents argue that the exemption changes are essential for supporting low-income and fixed-income homeowners, whereas critics express worry that reduced local revenues could hinder school funding. The bill's approach to compensating districts with additional state aid complicates the discussion, as stakeholders weigh the benefits to homeowners against potential pitfalls for local education budgets.