These new proposals from the committee represent a very different approach than what was taken by the Senate when it approved its version of SB 1 in late September. Here are some of the key provisions in each chamber’s proposal:
- The committee’s substitute for SB 1 uses $3 billion in federal stimulus dollars to send a check to each owner of a residence homestead. According to a statement from Chairman Meyer’s office, this would come out to around $533 per homeowner.
Broadly speaking, using stimulus dollars to offset tax cuts is prohibited under federal rules. Legislators are hoping that sending the relief funds to homeowners as a check, rather than a lower property tax bill, remains compliant with this requirement.
- HB 90 would require the state to dedicate 90% of any general revenue received above statutory spending limits to property tax compression beginning in FY 2026. This amount would vary, but one scenario highlighted by the LBB put that amount as high as $11.4 billion for one biennium.
Tax compression under this bill would be permanent. No prohibitions on TREs are included.
- The Senate’s version of SB 1 would use $2 – $4 billion to provide temporary M&O rate compression of 6.6 – 13.2 pennies in the 2022-23 school year.
The exact amount of additional compression would depend on a future increase to the state revenue estimate from the Comptroller’s office.
The state compression percentage would again return to being calculated under current law once the bill’s provisions expired, likely resulting in a tax rate increase for many districts.
- The bill also includes a provision that would prohibit TREs in 2022-23 and would make changes to ballot language in TREs going forward.
SB 1 and HB 90 will now go to the full House for approval.