Texas voters will decide on a second homestead tax exemption increase in two years in November

On July 13, the Texas State Legislature finalized a constitutional amendment and adopted implementing legislation designed to lower property taxes before adjourning its second special legislative session of the year. The amendment, which voters will decide on in Nov., would:

  • increase the homestead tax exemption from $40,000 to $100,000;
  • authorize the state legislature to limit the annual appraisal increase on non-homestead real property;
  • exclude appropriations made to increase state education funding from the state appropriations limit; and
  • authorize the state legislature to provide for four-year terms for members of the governing body of an appraisal entity in counties with a population of 75,000 or more.

Texas last voted to increase the homestead tax exemption from $25,000 to $40,000 in May 2022. It was approved by nearly 85% of voters. In 2015, Texas voters approved Proposition 1, which increased the homestead exemption from $15,000 to $25,000. It was approved by 86% of voters. Prior to that, Texas voters had last increased the exemption in 1997 with the passage of Proposition 1, which increased the homestead exemption from $5,000 to $15,000. It was approved by a vote of 93.83% to 6.17%.

After the state legislature did not adopt a property tax plan during the regular legislative session that adjourned on May 29, Gov. Greg Abbott (R) called a special legislative session. Nine amendments were filed for consideration, but none passed both chambers. On June 27, Gov. Abbott called a second special legislative session. Thirteen amendments were filed with one passing both chambers and heading to voters, bringing the total number of amendments on the ballot in Nov. 2023 to 14 — the most since 2007 which featured 17 measures.

The amendment passed in the House by a vote of 132-5 with 13 absent and in the Senate by a vote of 31-0. Five Democrats voted against the amendment in the House.

The tax plan was endorsed by the Texas Association of Builders, Texas Realtors, and the National Federation of Independent Business of Texas. In a statement following the plan’s passage, Gov. Abbot said, “The Texas House and Senate fulfilled our promise with an agreement that delivers a comprehensive, long-lasting solution to increasingly burdensome property tax bills. I thank my partners in the Texas Legislature for coming together to honor the best interests of hardworking Texans who want to own their property—not rent it from the government.”

Texas voters will decide on 13 other amendments this November that address topics including special state funds, cost-of-living adjustments for beneficiaries of the teacher retirement system, the mandatory retirement age of state judges, a wealth tax prohibition, and a right to farming, ranching, and wildlife management.

During all three legislative sessions this year, legislators filed 319 constitutional amendments. With 14 measures certified for the ballot, this is a 4.4% certification rate.

In Texas, a total of 175 ballot measures appeared on statewide ballots between 1995 and 2021. One hundred and sixty ballot measures were approved, and 15 ballot measures were defeated.

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