School Districts Looking To Rescind Extra Homestead Exemption

It looks like we’ve got something else to get the property tax relief crowd in an uproar:

Trustees of cash-strapped Texas school districts are being forced by budget deficits to consider the thorny issue of rescinding a local-option homestead exemption that some of them granted to homeowners during easier times.

Across Texas more than 200 districts grant the extra exemption — as high as 20 percent of the residential property value on top of the standard $15,000 homestead allowance — and can legally cancel it without a community vote.

Although eliminating the additional tax break during tough economic times would be unpopular, a letter from Texas education officials has some school districts thinking it might be necessary to make ends meet.

Robert Scott, Texas Education Agency commissioner, told the districts last month that the state — which has often refunded some additional homestead money to the districts — may not be able to afford future returns.

“School districts should not expect automatic continued adjustment and should plan accordingly,” the letter reads. “There is no certainty that a surplus of appropriations will exist in future years and even less likelihood in the first year of a state fiscal biennium.”

The exemption in question, of course, is on top of the mandatory exemption. And, no doubt, it will give the folks who build their political campaigns around property tax relief something to be upset about (Rick Perry, Dan Patrick, et al).

The problem with the continued efforts at “property tax relief” in Texas–like this additional exemption–is that they are quick fixes designed to be able to let politicians tell the public that they got them “tax relief.” Never mind that the bogus “tax relief” measures enacted aren’t usually such that they will survive an economic downturn (such as the one mentioned here). And, of course, never mind the fact that this kind of tax relief benefits wealthier taxpayers more than middle class tax payers.

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