Proposing a constitutional amendment authorizing the governing body of a political subdivision to adopt an exemption from ad valorem taxation of a portion, expressed as a dollar amount, of the market value of an individual's residence homestead and providing for the adjustment of the exemption amount in subsequent years to reflect inflation.

89th Legislature (2025) Introduced by Chris Turner

Proposes constitutional amendment letting Texas local governments exempt fixed dollar amounts from residential property taxes with automatic inflation adjustments, reducing local revenue for schools and services.

Referred to Ways & Means

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Legislative bill overview

HJR 154 proposes a constitutional amendment that would allow Texas cities, counties, and other local government entities to exempt a fixed dollar amount of residential property value from local property taxes, with that exemption amount automatically adjusting annually for inflation. This differs from current Texas law, which typically uses percentage-based homestead exemptions rather than dollar-amount exemptions.

Why is this important

Property taxes are a major revenue source for local governments funding schools, infrastructure, and services. This amendment could reduce property tax bills for homeowners but would shift tax burden to other property types or require service cuts. The inflation adjustment mechanism means the exemption would grow automatically without additional legislative action, affecting long-term local government budgets predictably but potentially constraining revenue growth.

Potential points of contention

Revenue impact on local services: Schools and local governments would need to offset lost property tax revenue through other sources, potentially affecting service quality or requiring tax increases elsewhere

Inequitable benefit distribution: Dollar-amount exemptions benefit all homeowners equally, regardless of property value, meaning owners of modest homes receive the same tax reduction as owners of expensive homes—a less progressive approach than percentage-based exemptions

Inflation adjustment concerns: Automatic inflation adjustments remove democratic oversight of exemption levels; if inflation is high, revenue losses accelerate without voter approval or legislative review

Complexity for local governments: Allows each political subdivision to set different dollar amounts, creating administrative complexity and potential inequities between neighboring jurisdictions