Texas Senate Bill SB55

Texas 2021 - 87th 2nd C.S.

Caption

Relating to an increase in the amount of the exemption of residence homesteads from ad valorem taxation by a school district, a reduction in the amount of the limitation on school district ad valorem taxes imposed on the residence homesteads of the elderly or disabled to reflect the increased exemption amount, and the protection of school districts against the resulting loss in local revenue.

Impact

The bill stipulates that school districts will receive additional state funding to offset potential revenue losses resulting from these tax exemptions. Starting from the 2023-2024 school year, school districts are entitled to additional state aid if their local revenue decreases due to the enforcement of these new homestead exemption regulations. This is particularly significant as it ensures that local school districts are not adversely affected by the resulting tax changes, thereby maintaining a steady flow of funding for education.

Summary

Senate Bill 55 seeks to amend the existing Texas Tax Code to increase the amount of the exemption for residence homesteads from ad valorem taxation by school districts. Specifically, it raises the exemption from $25,000 to $35,000 for qualified homeowners while also implementing a reduction in the limitation imposed on ad valorem taxes for the elderly and disabled in line with this increased exemption. This legislative change aims to provide additional financial relief to vulnerable populations by lowering their property tax burdens.

Contention

One notable point of contention surrounding SB55 is the potential long-term impact on school district funding amidst rising property values. Critics argue that increasing property tax exemptions for select groups could lead to disparities in funding across school districts. The bill's dependence on voter approval for the underlying constitutional amendment also raises questions about its future implementation. Thus, while the bill is framed as a progressive reform to assist the elderly and disabled, it raises concerns regarding equitable funding and the financial sustainability of local education systems.