A new statewide analysis found 39% of homesteads owe no school district property taxes, including roughly 61% of elderly or disabled homeowners. Nearly four in 10 Texas homesteads now pay no school district property taxes after lawmakers repeatedly expanded the state’s homestead exemption and compressed school tax rates, according to a new statewide analysis presented to lawmakers Tuesday. Senate Local Government Committee Chair Paul Bettencourt said his office spent about four months collecting property tax-bill data from offices covering all 254 counties, an effort he described as the first comprehensive statewide analysis of its kind. The impact was even greater among those who are older than 65 or disabled: Nearly 61% of roughly 2.4 million homesteads receiving those exemptions owed no school property taxes, up from about 44% before the latest round of relief. Texas currently exempts the first $140,000 of a qualifying homestead’s value from school district property taxes, up from $100,000 before lawmakers passed Senate Bill 4 in 2025. Homeowners who are 65 or older or disabled receive an additional $60,000 exemption under Senate Bill 23, bringing the total school homestead exemption for qualifying homeowners to $200,000. Having no school property taxes due does not necessarily mean a homeowner has no property tax bill. The state-mandated exemptions apply to school district taxes; homeowners may still owe taxes to cities, counties and other local taxing entities. The change has surprised some homeowners. Brazoria County Tax Assessor-Collector Kristin Bulanek told lawmakers her office received calls and visits from residents who thought their tax bills were wrong after seeing $0 owed to their school district. Bulanek described seeing “relief and even sometimes tears” after staff confirmed the bills were correct. In Brazoria County, 20% of homesteads had no school tax due, rising to 61% among those with an elderly or disabled exemption. A presentation to the Texas Senate Committee on Local Government shows the share of homesteads belonging to homeowners who are 65 or older or disabled that pay no school property taxes. What happened to school property tax levies? School property tax levies have also shifted substantially during the state’s push for property tax relief. An NBC 5 analysis of Texas Comptroller data found statewide school district levies fell about 10% from $43.9 billion in 2022 to $39.5 billion in 2023, when lawmakers approved a record property tax relief package that included both a larger homestead exemption and significant tax-rate compression. Levies subsequently rebounded to about $41.7 billion in 2024 and remained essentially flat in 2025. Overall, the statewide levy was about 7% higher in 2025 than in 2021. NBC 5 also reviewed Comptroller data for 10 school districts across Dallas, Tarrant, Collin and Denton counties. Each saw its total levy fall between 2022 and 2023. But those declines did not necessarily leave districts with lower levies over the longer term. By 2025, levies were higher than in 2021 in six of the 10 North Texas districts reviewed. Garland, Denton and McKinney ISDs were each more than 20% above their 2021 levels, while Plano and Arlington ISDs remained about 8% below. A district’s total levy is impacted by multiple factors, including changes in its taxable property base and its tax rates. The trends should not be interpreted as the effect of homestead exemptions alone. Does a lower property tax levy mean less money for schools? Texas’ school-finance system combines local property tax revenue with state funding. So a reduction in local collections does not necessarily mean less money available to a school district. Josh Haney, a school finance consultant, told lawmakers that Texas school districts operate in a largely equalized funding system on the maintenance-and-operations side, meaning that as local property tax collections rise, state aid can fall. Instead, school operating revenue is influenced by factors such as student attendance and eligibility for certain programs. A Boerne ISD trustee offered a similar explanation earlier in the hearing, telling lawmakers the district supports property tax relief “as long as that revenue is being replaced by aid from the state.” That does not mean school districts are insulated from other financial pressures or that the state has determined their overall funding is sufficient. Lawmakers weigh further tax cuts, appraisal district costs Some lawmakers questioned how far Texas should expand exemptions. Sen. Molly Cook, D-Houston, questioned whether further increases could produce diminishing returns as a growing share of lower-value homesteads already owe no school tax. She also raised concerns about renters, who do not directly receive homestead exemptions, and about the long-term cost of relying on state money to offset reductions in local school taxes. Shannon Holbrook, with the nonprofit Every Texan, told lawmakers that her organization considers a flat homestead exemption the most equitable way to cut homeowners’ property taxes, but argued further increases eventually stop benefiting homeowners whose values are already entirely exempt. Once a home’s value is already entirely covered by the exemption, another increase cannot further reduce that homeowner’s school tax bill. The committee separately examined the rising cost of operating county appraisal districts and how those expenses are divided among schools and other local governments. An analysis presented by Haney found appraisal district costs paid by 880 school districts with consistent reporting rose from about $294 million to $363 million between 2021 and the 2024-25 school year. Appraisal officials pointed to increasing protests and litigation as major cost drivers. Statewide property tax protests increased from about 2.2 million in 2021 to 3.2 million in 2024, a 47% increase, according to testimony citing the Comptroller’s operations survey. Tuesday’s hearing is part of the Senate’s interim work ahead of the 2027 legislative session. Lawmakers have been tasked with studying additional property tax cuts, including potentially expanding homestead exemptions and lowering the age for the senior exemption from 65 to 55, as well as housing affordability, local government fees and appraisal district funding. This story uses functionality that may not work in our app. Click here to open the story in your web browser. ...read more read less