Senate package ups the ante on tax cuts

The march toward statewide property and business tax relief is speeding up in Austin — and it looks like a race to see who can return the most money to taxpayers.

Senate leaders held a news conference — their second on the subject — on Tuesday to detail their intentions. They added close to $600 million to what they previously had said would be $4 billion in tax cuts.

A day earlier, the chairman of the House Ways and Means Committee, Angleton Republican Rep. Dennis Bonnen, said the House would deliver more than $4 billion in tax relief.

And two weeks ago, Gov. Greg Abbott said in his State of the State address that his proposed budget includes $4.2 billion in tax cuts.

Texans would do well to remember that this is the part of the legislative session when grand ideas are launched, described as glorious and then watched closely to see whether they soar or fall.

The difference is in the detail, and the Senate deserves credit for putting its plan on public display. Sen. Jane Nelson, R-Flower Mound, said her Finance Committee will hold hearings next week on other tax cut proposals from individual senators.

The proposal unveiled Tuesday would cut school property taxes by $2.5 billion, Nelson said, by sharply increasing the homestead exemption.

The exemption, which has stood at $15,000 since 1997, would change each year to 25 percent of that year’s median home value across the state.

The current estimate for the 2016 exemption would be $33,625, Nelson said. In Fort Worth ISD, that would mean an additional tax savings of $246.22 compared to the current exemption.

That savings would be the same for modest homes as for mansions, but it would be higher in districts with higher tax rates. It would require voter approval of a constitutional amendment.

Another Senate proposal would cut business franchise tax rates by 15 percent, delivering $1.5 billion in tax relief. A third bill provides more than $380 million in tax breaks by exempting businesses with up to $4 million in revenue from the franchise tax.

This story was originally published February 24, 2015 at 5:47 PM with the headline "Senate package ups the ante on tax cuts."