FOX 7 Focus: Breaking down Texas Legislature's property tax cut deal

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FOX 7 Focus: Breaking down property tax deal

In this week's FOX 7 Focus, John Krinjak sits down with Harvey Kronberg, publisher of TheQuorumReport.com, to break down the recent deal in the Texas House and Senate on property tax reflief.

The Texas House and Senate recently reached a deal on property tax relief following a months-long impasse and two special sessions.

The bill is now headed to Gov. Greg Abbott's desk.

In this FOX 7 Focus, Harvey Kronberg, publisher of The Quorum Report, sat down with FOX 7 Austin's John Krinjak to break down what's in the compromise legislation, what it means politically and what it means for Texans.

JOHN KRINJAK: As someone who watches Texas politics, what was your reaction when you heard about this deal between the House and the Senate on property tax?

HARVEY KRONBERG: Totally unsurprised. We knew there was going to be a deal. We knew most of the elements that were going to be in the deal. And frankly, I would make the argument that most of the problems were not in the proposals. They were in the personalities. The governor had not participated until the very end. You have a speaker and a lieutenant governor who don't like, I mean, frankly don't like each other. And you had gotten to the point where the lieutenant governor was going on talk radio and on television, trash talking him on all kinds of conservative media. More of the delay was attributed to personality than to legitimate, substantive issues.

JOHN KRINJAK: When you look at the substance of what's actually in here, $12 billion for reducing the school property tax rate, a $100,000 homestead exemption, as well as this 20% circuit breaker as it's all coming. First of all, what is all that and how much it accomplishes?

HARVEY KRONBERG: Well, the $12 billion in paying down property tax reduction is a one time, well, it's one time, they'd have to reauthorize it again next cycle. So they've raised the bar as to what the baseline is going forward. And we just have to hope the economy is sufficient to support that. But if by putting more money into schools, they put less pressure on schools to have to raise their property taxes, that's called compression. The thing that is going to be most durable for most homeowners is, and which is not dependent on the economy, is raising the homestead exemption from $40,000 to $100,000. And for most middle class folks, they will feel that that'll be about on average, about $400 bucks or something like that. And it's not going to be contingent on future budgets and the 20% cap on increasing nonresidential property in places like Austin, where you saw nine homesteads double in the last three years, that that can be pretty consequential, but nobody knows that. To my knowledge, nobody knows what that's going to cost yet. So it lets everybody get out of town claiming that they have done something about property taxes.

JOHN KRINJAK: What is the impact for the average Texas homeowner or are they going to feel this in short order?

HARVEY KRONBERG: Somebody with a half million dollar home is only going to be, that is not over 65, is going to watch their taxable value of their house dropped from $500,000 to $400,000. That means their property tax reduction is going to be meaningful. It's not going to reach renters and it's not going to affect rental properties per se. But for the average Texan, this may be the first property tax reduction that most people will actually feel.

JOHN KRINJAK: What do you feel like the political optics are here? Do any of the big three come away looking good at it?

HARVEY KRONBERG: Well, I don't know how much the public was paying attention to this, but from essentially an insider's perspective, no, nobody comes away looking graceful. It represents a pretty large dysfunction. I've been here since Bill Clements was governor. Bill Clements back in 1989 was personally engaged in negotiations. Ann Richards was personally engaged. George W Bush was definitely engaged. Rick Perry was engaged. This governor was not engaged. And he left it to the devices of two people who don't like each other. It was Sam Rayburn, former speaker of both the Texas House and speaker in Congress, who said most people think it's Democrats and Republicans are the enemy, that it's the House versus the Senate.