Largest Tax Cut In Texas History

I am excited to report that the Texas House and Texas Senate have arrived at an agreement for an $18 billion tax cut for Texas taxpayers during this second called special legislative session. I was honored to spearhead these negotiations which will establish the largest tax cut in Texas history, larger than some states’ annual budgets.

As a part of the agreement, we passed an omnibus property tax relief and reform bill that features a constitutional amendment as well as a bill to reform the franchise tax system. The amendment provides the constitutional authority to implement this historic tax cut.

Senate Bill 2, which I joint-sponsored, represents $18 billion in tax cuts with nearly $13 billion in property tax compression. Tax compression, in this case, is simply the use of injecting funding to reduce a school district tax rate. The tax compression in SB 2 is replacing local revenue by injecting more state revenue to push down the local maintenance and operation tax rates, which will ultimately reduce what taxpayers owe. The legislation also raises the homestead exemption from $40,000 to $100,000 for all homesteads in Texas while maintaining the additional $10,000 homestead exemption for those 65 years of age and older or disabled. This means that Texans 65 years of age and older or disabled will receive a $110,000 homestead exemption. Notably, this legislation implements a three year pilot program for a 20% limit increase in taxable value for commercial properties under $5 million that expires on 12/31/2026.

SB 2 provides a $7.6 billion tax compression. Additionally, in the state budget there is already $5.3 billion accounted for in tax compression. Importantly, this legislation also provides for the election of three additional members to a county appraisal district board of directors. This will be a requirement for counties with a population of 75,000 or more in size. Going forward, the appraisal review board members will be appointed by the appraisal district board of directors, and at least two of the elected board members must approve an appointed ARB member as a part of a majority vote. This puts the ARB in the hands of the citizens.

I authored House Joint Resolution 2 which puts to the voters in November 2023 the constitutional amendment to enable all the provisions of the property tax relief and appraisal reform package that is contained in SB 2. This measure will provide the constitutional authority and create the fund to implement the largest tax cut in history!

This is a major property tax relief and reform plan that incorporates policies that I have fought for during each legislative session. As one of the main fighters for appraisal reform in the state legislature, I am happy to see that we now have a limited amount on the taxable value of commercial property which has never existed before. This is especially important since I have seen some properties’ taxable value increase by over 300%. We also now have elected members of the appraisal district board of directors who have the authority to appoint the ARB members.

We The People finally have a voice that is desperately needed. After facing major pushback from special interest groups against these policies, I am happy to see that we have taken a giant step in the right direction for all Texans in this important fight. This fight is not over and as your State Representative, I will continue to fight for the taxpayers of Texas.

Finally, Senate Bill 3, which I co-sponsored, was passed to reform the franchise tax system in a way which benefits our small businesses in Texas. As you know, the franchise tax is a tax imposed on the businesses within our state. SB 3 will double the current exemption from paying the franchise tax to a total of $2.47 million. It will also remove the requirement to file a “no-tax due” franchise tax return which is an unnecessary burden on our job creators.

My constituents send me to their state capitol to deliver meaningful and lasting results for them and their families. Delivering this package of historic tax relief and reform is exactly what has been accomplished. These policies will ensure that this state remains the best place to live, work and raise a family. Our great state will continue to be the envy of every other state in the nation.

I look forward to being back home in Montgomery County after the adjournment of the regular and two special sessions of the 88 th Legislature. We have had some true victories in your State Capitol. As always, please let me know if I may ever be of service to you. It is an honor to represent you in the State Legislature.

May God bless you, your family and the great state of Texas.

Will Metcalf
State Representative
House District 16