Today Lt. Gov. Patrick and several Senators held a press conference regarding SB 1, SB 7 and SB 8, relating to tax relief measures. Sen. Nelson, author of SB 1 & SB 7, and Sen. Schwertner, author of SB 8, were joined by Sens.: Paul Bettencourt, Brian Birdwell, Konni Burton, Troy Fraser, Joan Huffman, Lois Kolkhorst, Larry Taylor, Van Taylor, and others voicing their support for the measures.
Before introducing Sen. Nelson to discuss the legislation she filed, Lt. Gov. Patrick also spotlighted there would be a similar package, in terms of dollars, in the coming weeks that would be presented that would address pensions, teacher retirement/health care, facilities and other key issues.
SB 1 and SB 7, together would provide approximately $4 billion in tax relief during the 2016-2017 biennium. SB 1 raises the homestead exemption to 25 percent of the home median market value. SB 7 reduces the state's business franchise tax rate by 15 percent.
SB 1 includes nearly $2.5 billion in property tax relief by setting the homestead exemption to 25 percent of the state's home median market value. For FY2016, the median home market value is projected to be $134,500, resulting in an exemption of $33,625. For FY2017, the projected value is $143,915, so the exemption would be $35,979. In future years, SB 1 provides that the exemption will rise or fall along with property values in the state. This will be put before voters under SJR 1, also filed by Senator Nelson today. SJR 1 also constitutionally prohibits the establishment of any tax on real estate sales.
SB 7 provides $1.5 billion in business tax relief by reducing the business franchise tax rate, also known as the margins tax, by 15 percent.
SB 8, Sen. Schwertner, relates to the total revenue exemption for franchise tax. The bill would raise the current $1 million revenue exemption to $4 million and will completely eliminate the business tax for over half of the businesses currently subject to the tax. By raising the current exemption, the Comptroller estimates it will result in an 8% decrease in franchise tax revenue.
Senate Finance will begin hearing these tax relief bills next week.