On property tax impasse, Gov. Greg Abbott appears open to House-Senate compromise

Gov. Greg Abbott speaks about the recent regular session of the Legislature at the Texas Public Policy Foundation offices in Austin on June 2, 2023. (Evan L'Roy/The Texas Tribune, Evan L'Roy/The Texas Tribune)

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State lawmakers, entering a third week of special-session gridlock over property taxes, are looking for new ways to break the impasse and get a bill to Gov. Greg Abbott that he would sign.

Abbott appears to have softened on his insistence that lawmakers focus only on a method of property tax relief known as compression — sending state funds to school districts so they can lower their tax rates. Instead, he has been encouraging the House and Senate to strike a deal that can reach his desk, raising the prospect of broader legislation.

That’s been welcome news for the Senate, which has insisted from the start of the special session that any property-tax measure include an increase in the homestead exemption as a way to directly help homeowners.

And in the House, Abbott’s latest comments have revived talk of tightening appraisal caps, which was the chamber’s preferred method in the regular session before it swiftly obliged Abbott’s compression-only demand at the start of the special session.

Asked Monday about the property-tax negotiations, Abbott said he has talked in recent days with Lt. Gov. Dan Patrick and House Speaker Dade Phelan to stress the need for a compromise. He did not mention the compression-only strategy that is currently on his call for the special session.

“One thing I let both of them know — the only way that legislation gets to the governor’s desk to be signed into law is for the House and Senate to work together,” Abbott said during a bill-signing news conference in Austin. “The good news is they understand that and they are working together. The most important thing is that they work together to hammer out their differences and get a bill to my desk as quickly as possible.”

Minutes after Abbott’s news conference, Patrick tweeted that he “met with [Abbott] last week and he assured me he would sign a property tax bill if both the Senate and House agreed to it.” Asked about Patrick’s tweet, Abbott’s office pointed to his earlier comments at the news conference.

Lawmakers are about halfway through a 30-day special session that has languished since the early days, when the House quickly passed Abbott’s preferred legislation on property taxes, as well as harsher penalties for human smuggling, then left town. The Senate has remained in session and insisted on an increase in the homestead exemption, fueling a rare public showdown between Patrick and Abbott, who had firmly sided with the House.

While Abbott has continued in his public comments to promote the idea of sending money to school districts so they can lower their tax rates, he has not ruled out signing a property-tax package that includes an increase in the homestead exemption. That has kept Patrick hopeful that there remains a chance he can get his way.

Patrick, who presides over the Senate, held a news conference Tuesday in Houston where he said he met with Abbott for an hour and a half. He suggested he left the meeting hopeful.

“The governor has not said that he would veto a homestead exemption, and he hasn’t said he’s for it,” Patrick said. “But I think I know this governor pretty well. There's no way in hell this governor’s going to veto [that].”

House Republicans are taking notice that more property-tax proposals may be back on the table. A group of GOP freshmen issued a statement Monday that raised the possibility of the kind of compromise lawmakers weighed at the end of the regular session — a mix of compression, an increase in the homestead exemption and a reining in of appraisal caps.

“If a compromise is necessary to get this critical legislation across the finish line, we also continue to support the elements of SB 3, which the House passed during the regular session — significant compression with additional funds for a homestead exemption, as long as it includes an appraisal cap in order to keep our values in check,” the statement said.

The statement was signed by 16 members.

The pitch by the Republican freshmen came hours after the far-right House Freedom Caucus proposed its own compromise plan that included an increase in the homestead exemption but no tightening of appraisal caps. That irked some other House Republicans.

“I guess y’all have abandoned appraisal caps,” tweeted Rep. Dustin Burrows, R-Lubbock, a member of House leadership. “Disappointing.”

Currently, Abbott’s special-session proclamation calls for legislation to provide property tax relief “solely by reducing the school district maximum compressed tax rate.” He can choose to revise the proclamation — something the Freedom Caucus suggested he do — but Patrick has argued that the Senate can pass whatever it wants related to property taxes. Abbott has dismissed that as legislative process talk that taxpayers do not care about.

In recent days, Abbott has spoken optimistically about the property tax negotiations, calling the House and Senate “very close” despite little public evidence of that. He has said all they need to do is sit down and hash out their differences, much like they did with “a lot of bills” in the final hours of the regular session.

“That just needs to be repeated for all of the bills on the special session call,” Abbott said.

One thing Abbott has made clear is that lawmakers are in for a long summer if they remain in a stalemate.

“We’re going to stay focused on this until a solution is reached,” Abbott said last week. “And so I’ll call special session after special session after special session until a solution is reached.”

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