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San Antonio council eyes homestead exemption on city property taxes

February 28, 2019

As state lawmakers in Austin weigh property tax reform, San Antonio Councilmen John Courage and Clayton Perry are pushing a tax relief measure at the local level.

The two North Side council members filed a request last week that would direct city staff to research the impact on tax revenue and future budgets if San Antonio were to offer a homestead exemption.

“I think we need to have the city lay out the procedure that we could follow and what some of the options are in order for the council to actually act,” Courage said.

Council members Art Hall, Rebecca Viagran and Manny Peláez also supported the request, which requires five signatures. Mayor Ron Nirenberg said Wednesday he also supports it. Courage and Perry plan to discuss it at a Municipal Plaza press conference Thursday.

The request will now head to the city’s governance committee, where it could be forwarded to another committee or sent to the council for a briefing or a vote.

Perry said the initiative has its roots in budget discussions at City Hall over the past two years. He pushed for an exemption on both occasions, to no avail. Councilman Greg Brockhouse also supported those measures, Perry said.

“Basically, everybody’s taxes keep going up…We’re the only major Texas city that does not offer a homestead exemption,” Perry said.

San Antonio hasn’t increased its property tax rate in years, but rising appraised values have kept its average tax bill consistently on the rise.

Homestead exemptions allow homeowners to decrease the taxable value of their primary residence by a percentage or a fixed amount and, as a result, lower the taxes owed. Courage and Perry’s request would also examine whether the city can increase its existing exemptions for seniors and disabled homeowners.

Taken together, San Antonio currently offers the lowest total exemptions among the five largest cities in Texas, partly because it’s the only one that does not offer a homestead exemption. San Antonio’s exemptions for those 65 or older ($65,000) and disabled people ($12,500) are also lower than most in that group. The city, however, freezes property tax payments for seniors and only Austin has a lower tax rate.

Houston offers a 20 percent homestead exemption, along with $160,000 exemptions for disabled people and those over 65. The discounts are 20 percent and $90,000 in Dallas; 10 percent and $88,000 in Austin; and 20 percent and $40,000 in Fort Worth.

Courage and Perry’s request doesn’t commit to a specific figure. Instead, it gives staff the discretion to research what would be workable for San Antonio.

A staff presentation from last year’s budget cycle reported a homestead exemption would have cost the city anywhere from $6 million — for the minimum, $5,000 exemption — to $44 million for the maximum, 20 percent exemption in the 2018 fiscal year. Most of the lost revenue would have impacted the general fund, which provides city services.

The tax savings varies with the value of a home. The analysis said a flat, $5,000 exemption would have saved San Antonio homeowners an average of $27.91 on their tax bill. A 20 percent exemption would save someone who owns a $200,000 home about $223.31.

Both Courage and Perry said they envision an exemption that would gradually increase over a few years to what other cities offer, to reduce the strain on city finances.

The city’s decision will ultimately be influenced by what happens on the state and federal levels, he said. But both councilmen said they’d like to see an exemption built into the next budget.

Nirenberg emphasized those external factors in a statement supporting the measure.

“While San Antonio homeowners have the second lowest property tax rate of any big city in the state, we need to do more,” he said. “And we especially need to insist that the Legislature stop shifting more and more of the burden for public school funding onto the shoulders of local (school) districts and homeowners.”

In the past decade, the state’s share of funding public schools has dropped from nearly 50 percent to 38 percent, according to the Legislative Budget Board, shifting the burden to school district property taxes. Generally speaking, school districts account for a majority of property tax bills, according to Bexar County Tax-Assessor Collector Albert Uresti. The city accounts for about a fifth of the average bill in San Antonio.

The city must submit a request to the state if it wants to create an exemption in next year’s budget, according to Perry. The deadline to do that is July 1.

Dylan McGuiness covers City Hall and local politics in San Antonio. Read him on our free site, mySA.com, and on our subscriber site, ExpressNews.com. | dylan.mcguinness@express-news.net | Twitter: @DylMcGuinness