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Financial Assistance 2


Recommendation

Texas should amend state law to grant an exemption from school district property taxes for military reservists called to active duty.


Summary

The Texas Legislature should grant a mandatory $20,000 homestead exemption from school district property taxes for Texas military reservists called to active duty by the president. The exemption, which would be similar to the current mandatory exemption for disabled veterans, would expire when the individual is released from active duty.

The state should hold school districts harmless for any property tax revenues lost to school districts as a result of the homestead exemption.


Legislative Changes Required

This recommendation will require a constitutional amendment to Article VIII, Section 2 and ratification by general election. The Legislature also must amend Chapter 11 of the Property Tax Code to implement the amendment.



Fiscal Impact

The cost to the General Revenue Fund to implement this proposal is estimated at $775,000 per year following the exemption’s implementation. This is the amount the state would provide to local school districts to make up for lost property tax revenue.