Texas Legislature 2023: What survived and failed as session wraps up

Monday, May 29, 2023
Texas Legislature 2023: What survived and failed as session wraps up
Texas House and Senate lawmakers didn't find a compromise on Gov. Greg Abbott's top priorities of border security and school choice.

AUSTIN, Texas (KTRK) -- Texas House and Senate lawmakers were unable to find a compromise on two of Gov. Greg Abbott's top priorities this session: border security and school choice. But they rushed Sunday night to push through some other priorities, suspending rules of the chambers to do so.

The two prominent pieces of legislation fell by the wayside this weekend as the deadline for the two chambers to come up with final, agreed-upon versions of bills slipped by. In particular, the failure to pass a measure that would allow parents to use taxpayer dollars to fund private school tuition or cover home-schooling expenses all but assures Gov. Greg Abbott will call the Legislature back for a taxpayer-funded special session to try again.

A third major priority, cutting property taxes for homeowners, missed key deadlines over the weekend. Legislative leaders pressed to pull a compromise out of their hats late Sunday. That would require suspending the rules, since those compromises are supposed to be reached in both chambers by the end of the day Saturday. They successfully did so for two other high-profile bills, one that sought to shore up the state's electricity grid and another that would create a new economic incentive program.

As the clock ticked, lawmakers tried a last-minute dash on a property tax-cut deal. House lawmakers said they signed a deal and were waiting on the Senate to do the same, according to a tweet from Phelan's spokesperson. But the House adjourned Sunday night without a deal. It's possible the chambers could strike a deal Monday on the last day of the session - but that would be highly unusual.

The legislative session ends Monday.

Even without a deal on taxes, lawmakers will wrap up their regular session with some major conservative victories on social issues. On Sunday, they sent to Abbott a bill to ban diversity, equity and inclusion offices on public college campuses. Earlier this month, they approved a measure to ban puberty blockers and hormone treatments for transgender children.

But on pocketbook priorities, the House and Senate have been increasingly at odds on priority issues this session, most notably with House Speaker Dade Phelan and Lt. Gov. Dan Patrick routinely and publicly shaming each other over their opposing property tax relief proposals. The tension came to a head earlier this week, when the House killed numerous of the Senate's dearest bills - some of which the chambers had previously agreed on - ahead of another midnight deadline.

For the "school choice" bill and the border bill, meanwhile, there was no last-minute search for a reprieve.

As the clock ticked Saturday into the evening, lawmakers first acknowledged the failure of a multibillion-dollar school funding bill after Senate changes turned it into a last-ditch effort to enact a voucher-like program in the state. Abbott had threatened to call a special session if the Legislature didn't pass a school choice bill to allow parents to use taxpayer dollars to pay for private school tuition. His office did not immediately respond Sunday to questions about the failed bills or whether he'll call for a special session.

The House has long resisted vouchers, as Democrats and rural Republicans fear they would siphon funds away from public schools, which serve as important job engines and community hubs across the state.

Unable to compromise, House Bill 100's failure also means that school districts won't get funding to raise teachers' salaries or balance their budgets, which they said became necessary expenses after the pandemic rattled their finances and inflation diminished the value of the money they get from the state.

Nevertheless, Democrats cheered the bill's failure on Sunday.

"The Texas Senate is holding teacher pay raises hostage in an attempt to pass a private school voucher scam that will defund our public schools," said state Rep. James Talarico, an Austin-area Democrat. "I'm proud of the bipartisan group of Texas House members who refused to give in to the Senate's scheme."

Also killed in the dark of night was the GOP's sweeping immigration bill to create a new state border police force. State Rep. Ryan Guillen, the Rio Grande City Republican who authored the bill, confirmed Sunday the chambers were not able to work out their differences over the legislation after the Senate added provisions to instill harsher penalties for immigration-related offenses. The Senate's version of House Bill 7 also included pieces of other failed Senate bills to create a mandatory 10-year minimum sentence for human smugglers and make it a state crime for migrants to enter the state anywhere but a port of entry. Such entries are already a federal crime though, unlike state police, federal agents process those who request asylum differently than other people caught crossing the border illegally.

Failing to reach a deal on property tax savings, though, would be the most embarrassing. Legislators came to Austin this year with a massive, once-in-a-lifetime budget surplus and made big promises to use that money for property tax cuts. Abbott made property taxes a cornerstone of his reelection campaign and pledged to use half of the state's $32.7 billion surplus for tax cuts.

"As I travel across Texas, there's one thing I hear loud and clear: Property taxes are suffocating Texans. We must fix that this session," Abbott said in his state of the state speech in February. "Hardworking Texans produced the largest budget surplus in Texas history. That money belongs to the taxpayers. We should return it to you with the largest property tax cut in the history of Texas."

The two chambers agreed to spend $17.6 billion on tax cuts as part of the state's spending plan for the next two years, which includes $12.3 billion in new spending and $5.3 billion to maintain cuts approved in previous spending. But they didn't figure out a plan for how to dole out the $12.3 billion in new tax cuts before time ran out.

The chief disagreement came over a proposal pushed by Phelan to tighten the state's cap on annual increases to a home's taxable value from 10% to 5%. House Republicans also wanted to extend the benefit to owners of business properties like grocery stores, apartment complexes and movie theaters, which currently don't have a cap. Phelan backed the idea in response to complaints from homeowners and business owners about their rising appraisals, which they fear will result in higher tax bills. But Patrick and senators vehemently opposed the proposal.

Real estate and tax policy experts warned the tighter cap would encourage people to hold on to their homes for an overall longer period of time, pushing down the state's housing supply and driving up housing costs. Business groups also opposed the idea, arguing it would create an unfair playing field among businesses.

Meanwhile, Senate Republicans proposed pushing to boost the state's homestead exemption on school district taxes from $40,000 to $70,000, with another $20,000 bump for seniors. The Senate's $16.5 billion tax-cut package would've also provided tax credits for businesses.

Both chambers agreed that the state should send more money to school districts in order to drive down tax rates, though they couldn't agree on how much. And to try to convince Senate Republicans to accept the tighter appraisal cap, the House proposed raising the state's homestead exemption to $100,000 for most homeowners - a dream Patrick has publicly mused about - and to $110,000 for seniors. But the House's proposal was a no-go for the Senate.

A few other bills also were rescued by last minute negotiations. Lawmakers distributed an agreement on Senate Bill 2627 more than 18 hours after the deadline to do so. Both chambers voted to send the bill to the governor not long after. It will create a low- or no-interest loan program funded by the state for companies that wanted to build or upgrade power plants. It also would pay a bonus to companies that get the new plants connected to the grid within a certain amount of time. Lawmakers set aside $5 billion in the budget to fund the proposal in case it passed.

A similar maneuver happened with House Bill 5, which creates a new economic incentives package to help lure large companies to the state. A compromise was reached more than 18 hours past the deadline, and then lawmakers rushed to suspend the rules and send them to the governor.

The goal was to create a package to address the shortcomings of a program known as Chapter 313 that was allowed to expire in December after 20 years of offering billions of dollars in school property tax abatements. Critics complained it caused massive inequity in schools and amounted to a corporate welfare program that allowed rich companies to break their promises about job creation. But its supporters said some version was vital to keep Texas' competitive business edge.

Both the tax incentive plan and the grid bill passed both chambers by wide margins.

The Texas Tribune is a nonprofit, nonpartisan media organization that informs Texans - and engages with them - about public policy, politics, government and statewide issues.

Karen Brooks Harper and Emily Foxhall contributed to this story.