ELECTION Q&A: PROPOSITIONS 1 & 2
Proposition 1 will benefit individuals with an over 65 or disabled exemption on their homestead:
• If an individual has an over 65/disabled exemption on their home and this proposition passes, they will receive a reduction on school district property taxes.
• HB 3 from the 86th Legislature compressed school maintenance and operation tax rates across the board except for over 65/disabled because their rate was already lower than the new compressed rate for everyone else.
• This amendment will provide for the same percentage reduction in an individual’s school district tax rate that everyone else received in 2019.
• There are 1.8 million over 65 exemptions and 180,000 disabled exemptions, on average these households will see a $110 reduction the first year and $125 reduction in the second year; the reduction will continue to grow each year.
• If there is additional school M&O tax rate compression provided by HB 3 in the future, individuals with an over 65/disabled exemption will receive the same percentage tax rate deduction automatically if this amendment passes.
• This amendment will become effective as of Jan. 1, 2023, if it passes.
Proposition 2 will increase the homestead exemption by $15,000:
• If this amendment passes the state homestead exemption for school district taxable value purposes will increase from $25,000 to $40,000.
• On average, the 5.67 million homesteads in Texas will see a $175 savings in their school district tax bill at the current average statewide school property tax rate.
• This amendment will be effective as of January 1, 2022, if it passes, so homeowners will see the savings when they receive their property tax bill this fall.
• This exemption increase is a permanent and ongoing benefit to homeowners.
If one or both of these amendments passes, no school district will lose any revenue they are entitled to receive from the school funding formulas. State dollars will replace any local dollars that a school district would otherwise lose from the passage of these amendments.