Texas Senate Bill SB12

Texas 2021 - 87th 2nd C.S.

Caption

Relating to the reduction of the amount of a limitation on the total amount of ad valorem taxes that may be imposed by a school district on the residence homestead of an individual who is elderly or disabled to reflect any reduction from the preceding tax year in the district's maximum compressed rate and to the protection of school districts against the resulting loss in local revenue.

Impact

The passage of SB12 will directly impact state laws pertaining to the taxation of homesteads by school districts, particularly those belonging to elderly or disabled individuals. This legislation will codify the requirement for school districts to calculate tax increases based on the maximum compressed rate from the previous year, thereby preventing significant tax hikes for vulnerable populations. Additionally, to guard against revenue loss due to these limitations, the bill allows school districts to seek additional state aid to compensate for the financial shortfall resulting from the changes.

Summary

Senate Bill 12 (SB12) establishes provisions for the reduction of ad valorem taxes imposed by school districts on the residences of individuals who are elderly or disabled. The bill modifies existing laws to ensure that the limitation on taxes reflects reductions in the school district's maximum compressed rate from the previous tax year. This change aims to provide financial relief for eligible individuals by adjusting their tax liabilities in accordance with fluctuations in district rates. The law will come into effect on January 1, 2023, pending voter approval of a related constitutional amendment.

Sentiment

The sentiment surrounding SB12 appears largely positive among its supporters, especially those advocating for the elderly and disabled communities. Proponents argue that the bill is critical for ensuring that these individuals are not disproportionately affected by rising property taxes. However, the measure may also face scrutiny from those concerned about its long-term implications for school funding, as it may reduce the overall tax revenue available to school districts, potentially leading to budget strains.

Contention

Notable points of contention include concerns about the adequacy of state funding to offset potential losses in local school revenues that may arise as a result of this legislation. Critics may argue that while the bill aids individuals, it poses a challenge for school districts that rely on property taxes as a primary funding source. The debate around SB12 underscores the balance between providing necessary financial relief to specific demographics while ensuring schools have sufficient resources to maintain quality education.