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SJR 2 Legislative Priority

Proposing a constitutional amendment to increase the amount of the exemption of residence homesteads from ad valorem taxation by a school district.
Overall Vote Recommendation
Vote Yes; Amend
Principle Criteria
neutral
Free Enterprise
positive
Property Rights
neutral
Personal Responsibility
neutral
Limited Government
positive
Individual Liberty
In Layman's Terms

SJR 2 proposes a constitutional amendment to increase the school district homestead exemption from $100,000 to $140,000, reducing property taxes for homeowners. The state would reimburse school districts for the lost revenue if voters approve the amendment.

Digest
SJR 2 proposes a constitutional amendment to increase the residence homestead exemption from school district ad valorem taxes from $100,000 to $140,000. The resolution amends Section 1-b(c), Article VIII of the Texas Constitution, increasing the amount of a home's market value that is exempt from taxation for public school maintenance and operations. Existing constitutional provisions regarding the additional homestead exemption for Texans age 65 or older and persons with disabilities remain unchanged, as do provisions allowing the Legislature to define eligibility and provide school district funding formulas to offset lost local tax revenue.

The proposed amendment includes a temporary constitutional provision specifying that the increased exemption would apply beginning with the 2025 tax year, despite voter consideration occurring later in the year. The temporary provision would expire on January 1, 2027, after serving its implementation purpose.

If approved by the Legislature, the proposed constitutional amendment would be submitted to Texas voters at the November 4, 2025, constitutional election. The ballot proposition would ask voters whether to approve increasing the school district residence homestead exemption from $100,000 to $140,000, with the amendment taking effect only upon voter approval.
Author (29)
Co-Author (1)
Borris Miles
Sponsor (5)
Morgan Meyer
Trey Martinez Fischer
Greg Bonnen
Todd Hunter
Chris Turner
Co-Sponsor (101)

Contact the Author

Sen. Paul Bettencourt

Capitol Phone:
(512) 463-0107
Capitol Office:
CAP 3E.16
E-Mail:
[email protected]
Visit Official Website
Fiscal Notes

According to the Legislative Budget Board (LBB), approval of SJR 2 by Texas voters would reduce school district property tax revenue by increasing the school district residence homestead exemption from $100,000 to $140,000. Because the Texas school finance system provides state aid to offset a portion of local property tax losses, the reduction in school district revenue would result in a corresponding increase in state costs for partial reimbursement. The detailed fiscal impact associated with those tax changes is incorporated into the fiscal note prepared for SB 4, which serves as the implementing legislation for the constitutional amendment.

The fiscal note identifies one direct, measurable cost attributable to the resolution itself: $191,689 in state expenditures for the required publication of the proposed constitutional amendment before the statewide election. Aside from these publication costs, the resolution does not independently create additional fiscal obligations beyond those associated with implementing legislation.

For local governments, the principal fiscal effect would be a decrease in school district property tax collections resulting from the larger homestead exemption. As with the state fiscal impact, the Legislative Budget Board notes that the specific estimates for local school districts are provided in the fiscal note for Senate Bill 4 rather than in the fiscal note for the resolution itself. If approved by voters, the constitutional amendment would apply beginning with the 2025 tax year following the November 4, 2025, election.

Vote Recommendation Notes

While SJR 2 would provide some property tax relief for Texas homeowners by increasing the school district residence homestead exemption, it does not represent the most effective or durable approach to reducing Texans' property tax burden. Increasing homestead exemptions provides targeted relief to owner-occupied residences but excludes many taxpayers, including businesses, rental property owners, and other property owners. Over time, the value of a fixed-dollar exemption is also diminished by rising property values and increasing local government expenditures, requiring lawmakers to revisit the exemption periodically to maintain its effectiveness.

A more comprehensive approach would prioritize using available state surplus revenue to further compress school district Maintenance and Operations (M&O) tax rates. Rate compression lowers taxes for all property owners rather than a single class of taxpayers, reduces reliance on repeated increases in exemption amounts, and provides broader, more sustainable tax relief. Because lower tax rates apply uniformly across the tax base, this approach avoids shifting a greater share of the tax burden onto taxpayers who are ineligible for the homestead exemption while promoting a more neutral and equitable property tax structure.

Texas Policy Research recommends that lawmakers vote YES on SJR 2 while also considering amendments to strengthen the bill. Such amendments should direct a significant share of available state surplus funds toward permanent rate reductions and establish a legislative preference for broad-based tax relief over recurring increases in exemption amounts. This approach would preserve the immediate benefits of the resolution for homeowners while advancing a more sustainable, equitable, and fiscally responsible property tax policy for all Texans.

Free Enterprise
neutral
The measure has little direct effect on the competitive marketplace. While homeowners benefit from the increased exemption, businesses, rental property owners, and other commercial taxpayers receive no comparable relief. The resolution neither imposes new regulations nor meaningfully reduces barriers to commerce.
Property Rights
positive
Lowering the property tax burden on residence homesteads strengthens private property rights by allowing homeowners to retain more of the value of their property and reducing the ongoing tax obligation associated with ownership.
Personal Responsibility
neutral
The resolution neither expands nor diminishes individual responsibility. It provides tax relief but does not alter incentives related to work, savings, or personal decision-making, nor does it create a new public benefit or entitlement program.
Limited Government
neutral
The resolution does not create a new agency, regulatory program, or grant additional rulemaking authority. However, it requires the state to absorb additional costs to reimburse school districts for reduced property tax collections, expanding the state's fiscal commitment without reducing the underlying size or cost of government. As a result, the overall impact on limited government is mixed but ultimately neutral.
Individual Liberty
positive
By reducing the property tax burden on owner-occupied homes, the resolution allows homeowners to retain more of their income and reduces the government's claim on private property. It does not create new mandates, restrictions, or enforcement authority.
Amendment Recommendations
  • Prioritize rate compression over exemption increases
Committee Vote Information
  • Senate Committee on Local Government: 7Y/0N
  • House Committee on Ways & Means: 12Y/0N (1 Absent)
References
Related Legislation
View Bill Text and Status
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