Patrick and Phelan remain at odds over property tax relief, making a special session of the Texas Legislature increasingly likely

Lt. Gov. Dan Patrick and House Speaker Dade Phelan agree on raising homestead exemptions, but they’re diametrically opposed on reducing appraisal cap increases.

By Andrew Schneider, Houston Public MediaMay 23, 2023 10:11 am, ,

From Houston Public Media:

With the regular session of the 88th Texas Legislature in its final week, the House and Senate have yet to agree on terms for one of the governor’s top priorities: property tax relief. A fundamental disagreement between the House speaker and the lieutenant governor could force the governor to call a special session if he wants to keep a promise to deliver the largest property tax cut in the state’s history.

Last week, House Speaker Dade Phelan announced a floor vote on the Senate’s leading property tax bill, Senate Bill 3. Strictly speaking, though, this wasn’t the same bill that passed out of the Senate. It’s what’s called a committee substitute, new language passed in this case by the House Ways and Means Committee. A committee substitute can mean anything from a slightly amended version to a complete rewrite.

Committee chair Morgan Meyer explained that, in his version, the Senate would get considerably more of something it clearly wanted, raising the homestead exemption on residential property.

Screenshot / Texas Legislature

House Ways and Means Committee Chairman Morgan Meyer laying out the committee substitute for Senate Bill 3.

“The Senate’s version of SB 3 increased the ISD mandatory homestead exemption from $40,000 to $70,000. Members, our substitute doubles this increase to $100,000. Under SB 3 all homeowners will have $100,000 of home value that is not taxable. And seniors and people with disabilities will have $110,000 of home value not taxed,” Meyer said.

But that sweetener was used to cover something the Senate was sure to find sour: lowering the amount that the appraised value of a property can increase in a given year.

“SB 3 retains the House’s reduction of the appraisal increase cap from 10% to 5% and an expansion of that cap to all real property,” Meyer said.

In other words, the House was adding a provision to the Senate’s bill from its own property tax relief bill that Lieutenant Governor Dan Patrick had already rejected.

Patrick told the Dallas-Fort Worth ABC affiliate that lowering appraisal caps would ultimately hurt Texas taxpayers, and he said he wouldn’t negotiate on what he called “bad math.”

“California Dade over there wants to give us a tax plan like California and New Jersey and other blue states that skyrocket the tax rate, and property taxes under their plan will actually go up in several years,” Patrick said in the interview. “So, we’re not going to let that happen.”

Theoretically, there’s still time for the two sides to iron out their differences in a conference committee. But it’s more likely that this legislation which Governor Greg Abbott had made such a high priority is dead for the regular session.

“I wouldn’t bank on this being the last we hear of it,” said Republican strategist Jessica Colón. “If this, for some reason, doesn’t get done this regular session…it will certainly come back in a special.”

If so, it would hardly be the first time in recent history that a fundamental disagreement between state leaders led to lawmakers spending the summer in Austin. Sherri Greenberg was a Democratic state representative for a decade. She now teaches at the University of Texas at Austin’s LBJ School of Public Affairs.

“Over the past decade, we’ve seen, increasingly, leadership at loggerheads — the lieutenant governor and the speaker, or the governor and one of them of this kind of triumvirate — and we’ve seen the result of that be additional special sessions over the summer,” Greenberg said.

Juan Carlos Huerta teaches political science at Texas A&M University Corpus Christi. Huerta said part of the reason Patrick and Phelan weren’t seeing eye to eye was that they were responsible to different constituencies.

“The lieutenant governor is elected in a statewide election,” Huerta said. “Whereas the speaker of the House is a House member. And so, you know, they represent a district, and they’ve got to build a consensus amongst all the House members to get their position and leadership.”

Huerta put the conflict between Patrick and Phelan in historical context. “It strikes me that it’s better than it was with Speaker (Joe) Straus, maybe not quite where it was with Speaker (Dennis) Bonnen,” he said.

Straus, who led the Texas House from 2009 to 2019, was elected in part with the help of House Democrats. He generally steered a centrist course, which frequently put him at odds with the more socially conservative Patrick. Among other measures, Straus opposed a bill Patrick supported restricting transgender bathroom access.

Bonnen, who succeeded Straus as speaker, was more closely aligned with Patrick on issues such as banning so-called sanctuary cities and expanding gun rights. He wound up stepping down as speaker after one term and declining to run for reelection to the House, after secret recordings came to light of Bonnen seeking to trade media access for help in targeting his political opponents.

Jessica Colón said Phelan and Patrick have worked together more frequently than not. “We’ve seen a lot of legislation come through the Texas House under Speaker Dade Phelan’s leadership, particularly in 2021, that had been waiting for a while to get accomplished,” Colón said.

The two chambers have until the end of the day on Friday to reach an agreement. At that point, it will be up to Governor Abbott to decide whether to call a special session to resolve the impasse. Juan Carlos Huerta said the governor has been reluctant to wade into the fight up to now.

“Governor Abbott has been using a lot of his political capital when it comes to that program that can get vouchers for students to attend private schools,” Huerta said. “And so, it may be a case that that’s where the Governor has chosen to put his political capital, figuring, look, I’ll let these two guys work it out, something’s going to pass.”

Governor Abbott has already signaled he’s ready to call a special session if, as expected, the House doesn’t pass legislation enacting the Senate’s school vouchers plan.

Senator Paul Bettencourt is the lead author of the Senate’s property tax bill. Asked whether he was anticipating a summer in Austin, Bettencourt laughed. “Oh, I do have plans for the summer,” he said. “I just don’t know where I’m going to be.”

Sergio Martínez-Beltrán

State Senator Paul Bettencourt, R-Houston, explaining the Senate’s property tax reform package.

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