SAN ANTONIO – An effort by two North Side councilmen to provide San Antonio homeowners some additional tax relief failed to get the support needed to move forward this year.
During a goal-setting session for the FY 2022 budget on Friday, District 9 Councilman John Courage and District 10 Councilman Clayton Perry unsuccessfully pushed to increase the city’s homestead exemption from 0.01% to 5%. A homestead exemption reduces the taxable value of the house you live in, in turn creating a lower tax bill.
The city’s homestead exemption only applies to its share of residents’ property tax, though, and does not affect how much homeowners have to pay other taxing bodies, like school districts or the county.
And because there’s already a $5,000 minimum for its current homestead exemption, city staff say boosting it to 5% would only save the average San Antonio homeowner an extra $27 each year, based on the average homestead value of $195,730.
On the opposite side of the balance sheet, the exemption would mean taking in $7.3 million less of revenue for the city, according to an analysis by Chief Financial Officer Ben Gorzell. Of that amount, $2.8 million would come out of the fund the city uses to pay back its debts and would be enough to cover $45 million-$50 million in debt capacity, he said.
Several council members showed reluctance to provide what could be seen as a token amount of relief in exchange for taking that money out of the budget.
“I really wanted to be supportive of it, but looking at the impacts that it would have on, you know, our social services, our ability to provide for the working class people -- provide for. I don’t know that I can, in good conscience, that I can yet be supportive,” said District 2 Councilman Jalen McKee-Rodriguez.
“The last time we did this, you know, we were lambasted for months for bringing home a $4.30 saving per month,” District 8 Councilman Manny Pelaez said, referring to the unanimous 2019 council vote to create the 0.01% homestead exemption, which saves most homeowners $28 per year. “It was an insult to a lot of people, and, because it wasn’t meaningful or impactful. The same anger that we saw flare up after, you know, CPS offered an $8 rebate.”
Perry championed the original homestead exemption and told KSAT that a 5% homestead exemption isn’t the end goal. It’s just another step toward reaching the maximum exemption allowed by state law -- 20%.
“Can we afford that jump in one year? Absolutely not. I agree,” Perry said.” But why not make that incrementally over the years to get up to 20%?”
The District 10 councilman thinks the city should work to convince other taxing bodies, such as school districts, to increase or institute homestead exemptions for their portions of property tax bills, too.
Then the level and combination of exemptions “would be very, very meaningful to homeowners here,” he said.
In a statement after Friday’s budget session, Perry admitted defeat for the moment, saying, “Unfortunately, it did not gain support from the majority of Council and will not move forward as we hoped.”
However, he and Courage’s office said the two councilmen will continue to push for property tax relief in years to come.
Though the other three big Texas cities have higher homestead exemptions than San Antonio -- 20% for Houston and Dallas, and 10% for Austin -- the others do not have the senior tax freeze that San Antonio uses for seniors.
Once San Antonio homeowners turn 65, the city portion of their bill does not increase, so long as they don’t make substantial improvements to the home. Many other local taxing bodies, including school districts and the county, also use such a tax freeze for their portions of the property tax bill.
According to numbers presented by Gorzell on Friday, 45% of the city’s homestead properties have a tax freeze in place.
The city also provides additional exemptions for seniors and people with disabilities, though Austin, Dallas, and Houston’s equivalents are higher.