AUSTIN, Texas — The Senate has dropped its homestead exemption bill, a piece of legislation that could raise homestead exemptions from $40,000 to $70,000. 

All 31 senators have signed onto Sen. Paul Bettencourt’s, R-Houston, Senate Bill 3. It also has a companion Senate resolution, SJR 3, which means the exemption increase will go to Texas voters for approval.

“The fact that unanimously every Senator in the Texas Senate signed on to these Lt. Gov. Dan Patrick priority bills speaks volumes about the Senate’s commitment to property tax cuts,” Bettencourt said in an announcement about the bill. “This bill will save every homestead $341 a year on top of the existing exemption, $454, totaling $795 per year in these exemptions.”

Lawmakers in both chambers will likely approve the proposition, which will go on the November 2023 ballot. It follows ballot measures approved by Texas voters last May that increased homestead exemptions from $25,000 to $40,000.

Lawmakers passed a proposition to increase homestead exemptions from $15,000 to $25,000 during the 2015 legislative session.

On Thursday morning, Speaker Dade Phelan said the House would drop its own property tax exemption on Thursday afternoon. The House is proposing a 5% property tax cut to all property owners, including small business owners. 

School district property taxes are the biggest component of any property tax bill. By increasing the exemption, the state agrees to pick up a bigger portion of the cost of public education. 

Texas will spend about $71 billion on public education in the current budget. The cost of the increased property tax exemption is $3.5 billion, which will be an ongoing cost in future budgets. 

The homestead exemption increase will only benefit the 5.7 million homeowners in the state, Bettencourt said. The exemption does not apply to commercial buildings, meaning that apartment dwellers will not benefit from the exemption increase. 

An additional $30,000 on the state’s homestead exemption will save the average homeowner $10,000 in their lifetime. Bettencourt expects to file additional property tax legislation.