SB 23 proposes increasing the school district homestead exemption for elderly or disabled homeowners from $10,000 to $60,000. While it purports to offer meaningful property tax relief, particularly to Texans on fixed incomes, it ultimately reinforces a policy framework that is politically expedient but economically flawed. The bill would cost the state over $1.2 billion in the upcoming biennium, backfilling lost local revenue through state aid in a way that further expands state obligations without any corresponding reforms to local spending or school finance.
This exemption expansion continues a concerning trend of narrowing the property tax base by carving out relief for politically favored constituencies, in this case, seniors, who statistically possess the most accumulated wealth. While disabled Texans deserve thoughtful, targeted support, blanket exemptions for all seniors, regardless of income or need, distort the fairness of the tax system and shift a greater burden onto younger, working families who already face high housing costs and inflation pressures. Rather than solving the structural issues driving high property taxes—namely, excessive local spending and a bloated school finance model—this bill merely masks them.
Moreover, SB 23’s “hold harmless” provisions for school districts effectively shield local governments from the consequences of tax base erosion, removing incentives for efficiency or spending restraint. This results in a troubling dynamic where the state assumes a larger financial role without demanding accountability or reform in return, growing government obligations while pushing the burden onto future taxpayers.
Texans need real tax reform, not just relief. That means flattening the playing field, broadening the tax base, and controlling government spending at its source. SB 23 does none of that. Instead, it further entrenches a system that picks winners, expands state fiscal obligations, and shifts costs to those without exemptions.
For these reasons, Texas Policy Research recommends that lawmakers vote NO on SB 23. While the intent to help vulnerable Texans is laudable, this bill is not the way to achieve lasting, equitable, and responsible tax reform.
- Individual Liberty: At first glance, the bill appears to support individual liberty by reducing the property tax burden for elderly and disabled homeowners, helping them retain more control over their financial choices and property. However, this benefit is undermined by the broader effect of cost shifting, as exempt groups pay less, non-exempt groups (mainly younger, working Texans) pay more. That redistribution of the burden erodes individual liberty for those not receiving the exemption, limiting their ability to control their own financial destiny.
- Personal Responsibility: By “holding schools harmless” and committing the state to cover lost revenue regardless of local spending behavior, the bill dilutes institutional accountability. Local governments and school districts are insulated from the consequences of their spending decisions, relying on state subsidies rather than living within their means. This approach erodes the principle of personal—and institutional—responsibility by rewarding unsustainable behavior and shifting the cost to the broader public.
- Free Enterprise: While the bill doesn’t directly regulate or interfere with commerce, the broader economic implications may negatively affect enterprise. The bill narrows the tax base and shifts costs to property owners who are not exempt, including small business owners and younger households who are often in their most economically vulnerable and formative years. The distortion of tax fairness can discourage growth and investment, particularly in communities where new entrants are disproportionately affected.
- Private Property Rights: The bill does provide enhanced protection for property rights, for some. Elderly and disabled homeowners gain relief from rising tax obligations, which can help them stay in their homes. But this selective defense of property rights comes at the expense of others whose tax rates must rise or whose state services are crowded out to backfill school district losses. True respect for private property should apply equally, not favor one class of owner over another based on political popularity.
- Limited Government: This is where the bill most sharply violates liberty principles. By dramatically increasing state expenditures—over $1.2 billion in the next biennium—to prop up a flawed local finance model, the bill expands the role and financial footprint of the state. It locks in future obligations without correcting the underlying causes of high taxes. Rather than shrinking or reforming government, it grows it, while giving the appearance of relief.
