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Gov. Abbott, Lt. Gov. Patrick clash over property tax bills | Texas House adjourns after passing their version

The move, basically telling the Senate to take the House bill or leave it, could exacerbate already heightened tensions at the Capitol.

AUSTIN, Texas — After weeks of bickering over whose proposal to cut Texans’ property taxes is better, House Speaker Dade Phelan sent a clear message to Lt. Gov. Dan Patrick, his Senate counterpart, on Tuesday: Take our pitch or leave the special session with nothing.

That message was delivered when the House abruptly adjourned Tuesday after swiftly passing bills on property tax relief and migrant smuggling — the sole items that Gov. Greg Abbott demanded from a special session that began Monday night.

Soon after the vote, Abbott appeared to back the House’s move, while Patrick signaled he wasn’t ready to back down.

The adjournment means the chamber can’t meet for the rest of the special session, leaving the Senate to accept the version of the bills the House passed or not pass any bill this session.

That bold legislative gambit appeared to be an effort to force the Senate to accept two House bills — one that would increase the minimum sentence for someone convicted of smuggling people and operating a stash house to at least 10 years under state law, and another that would use $12.3 billion in state funds to reduce school property taxes across the state.

For the smuggling bill, that might not be a huge hurdle. A similar version has been filed in the Senate.

But for property taxes, it would require Patrick, who presides over the Senate, to essentially accept what Phelan is pushing without making any changes. And given how Patrick and Phelan have clashed over property taxes for most of the year, that might be a tough pill to swallow.

Abbott, who was silent on property tax cuts during the regular session, ended up siding with Phelan over Patrick shortly after the vote on the House bill.

“It provides more cuts to property tax rates than any other proposal at this time," he said. "It is supported by the most respected tax think tank in the state, as well as more than 30 homeowner, consumer, and business groups across the state. I look forward to signing it when it reaches my desk.”

But Patrick was not ready to concede to Abbott and Phelan. In a statement released Tuesday night, Patrick said Abbott was misinformed about the roles of the governor and the Legislature, arguing that Abbott cannot dictate the language in a bill. Patrick repeated a statement he made earlier in the day on the Senate floor that the upper chamber's legislation was germane to the focus of the special session.

“Governor Abbott has finally shown his cards. He chooses to give homeowners 50% less of a tax cut, nearly $700 a year, to give corporations more. This is not what homeowners expected when they voted for him," Patrick's statement read.

The Republican heads of each legislative chamber have been at odds about how exactly to direct the $12.3 billion they set aside for property tax cuts over the next two years. The House proposal, which sailed through the chamber Tuesday with no floor debate, would lower the taxes that property owners pay to the state’s school districts, essentially spreading out the savings to all property owners, including businesses who own commercial property, investors who own rental properties and people who own their primary residence.

Notably absent from the House version and Abbott’s special session call was an expansion of the state’s homestead exemption, which allows Texans who own their primary residence to subtract a large chunk from the taxable value of their homes.

Boosting the exemption was Patrick’s biggest tax-cut priority this year. He and the Senate have insisted on concentrating more of the tax-cut savings on homeowners, who make up more than 60% of adult Texans. But Abbott left a homestead exemption proposal off of his agenda for a special session. Only Abbott can call a special session and only he can determine which legislation lawmakers take up.

Before the Senate gaveled out for the special session the Senate filed, passed through committee and then unanimously approved Senate Bill 1, which would lower school district property tax rates and expand the homestead exemption. The chamber then recessed until Friday.

“I have been crystal-clear that taxpayers deserve to receive the largest property tax cut in Texas history, and SB 1 delivers on that promise sustainably and responsibly,” Patrick said in a statement following the vote.

Phelan swiftly rejected SB 1 and a companion resolution when they arrived in the House, arguing the bills fell outside of Abbott's agenda for a special session and refused to let it move in the chamber. Instead, the House quickly passed its own proposal and adjourned.

The current homestead exemption allows homeowners to deduct $40,000 from their home value before paying school district taxes. During most of the regular legislative session that ended Monday, the Senate proposed raising the school district homestead exemption to $70,000. In the Senate's latest proposal passed Tuesday, they raised the proposed exemption to $100,000.

The Senate proposal would direct $12.1 billion to pay for the homestead exemption hike and to help school districts lower their tax rates, according to a fiscal analysis of the proposal. It's unclear how an additional $200 million already allocated for new tax cuts would be used.

After going most of the year without wading into the property tax-cut debate, Abbott emerged in full force Tuesday. In a Tuesday press release, he touted the support of several business lobbying groups for his proposal to focus on trimming down school districts' tax rates. Later, a collection of more than 30 business groups — including the Texas Oil & Gas Association, the Texas Association of Business and the Texas Association of Builders — threw their weight behind the proposal in a letter to Abbott, Patrick and Phelan.

“Rate compression ensures everyone wins and is treated equally, from businesses to homeowners,” said Glenn Hamer, president and CEO of the Texas Association of Business. “This is another example as to why Governor Abbott is the most business-friendly governor in the country.”

In the morning, Patrick, who presides over the Senate, used a speech before a conservative think tank to criticize Phelan and promote his preferred approach to property taxes. Patrick declared that his counterpart in the House runs a “dysfunctional chamber.”

“It’s time to call some of these things out, because things have to change,” Patrick told a gathering of the Texas Public Policy Foundation in downtown Austin.

Patrick all but accused Phelan — a real estate broker and partner in a real estate investment firm bearing his name — of trying to benefit himself with the cap proposal.

“In one of those meetings, he said, ‘I own a lot of property, not that it's about me,’” Patrick said. “Now, anytime anyone says it's not about me, it's usually about them. … Now, I'm not saying he was doing that to benefit himself. But I could never figure out why he wanted to do that.”

Addressing Abbott’s other priority for the special session — border security — the House also approved a bill that would increase prison time for smuggling people or operating a stash house — locations commonly used by smugglers to hide or hold undocumented immigrants.

House Bill 2, sponsored by state Rep. Ryan Guillen, R-Rio Grande City, would increase the minimum sentence for someone convicted of smuggling people or operating a stash house to 10 years under state law. That would drop to 5 years if the defendant cooperates with police or if a person convicted of smuggling is related to the person being smuggled, but it could jump to a minimum of 15 years under certain circumstances.

The full House approved the bill on a 90-53 vote. The bill now goes to the Senate, where Sen. Pete Flores, R-Pleasanton, filed similar legislation.

People smuggling is currently a third-degree felony under state law, carrying a punishment of two to 10 years in prison — although the sentence can increase under certain circumstances, such as if the person being smuggled is under 18 or becomes the victim of a sexual assault from being smuggled.

It’s already illegal to smuggle people across the border and hold them in stash houses under federal law, which carries a maximum punishment of 10 years in prison for “alien smuggling.”

Roberto Lopez, senior advocacy manager with the Texas Civil Rights Project, said increasing criminal penalties won’t stop people from smuggling immigrants and would lead to overcrowding at state prisons.

“With that sort of mandatory minimum approach, we don’t believe that it’s going to be a significant deterrent. Data from the war on drugs and decades of that sort of approach has shown that these things don’t work,” Lopez said. “Instead, we would prefer that the state take on as equally enthusiastic of an approach to just welcome people humanely at the borders, so that way, they don’t get kidnapped, extorted or they don’t have to resort to coyotes to get across.”

The Legislative Study Group, a House caucus made up of mostly Democrats that provides nonpartisan analysis and recommendations on bills before the chamber, didn’t recommend approving HB 2, saying it would cost the state a lot of money to implement and it could target people the proposal doesn’t mean to target.

“While targeting human smuggling is an understandable goal, HB 2 could subject more than 5,200 Texans to 10-year mandatory minimum offenses annually at enormous cost to taxpayers,” the group wrote in its analysis. “The offense of smuggling of persons is extremely broad because of changes made by the legislature in 2021. For example, church vans with tinted windows could be deemed to be ‘concealing’ a person with the driver subject to a mandatory minimum [sentence]. HB 2 further penalizes these broad offenses.”

During the regular session, the House tried multiple times to pass an effort to create a new state border police unit to address the record number of crossings at the Texas border. Bills aimed at securing the border — an Abbott priority — also included provisions to create a new state crime for entering the state anywhere between a port of entry and create a mandatory 10-year minimum sentence for human smugglers.

William Melhado, Stephen Simpson and Patrick Svitek contributed to this story.

This story comes from The Texas Tribune, a nonprofit, nonpartisan media organization that informs Texans - and engages with them - about public policy, politics, government, and statewide issues.

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