Republican priority bills fail as tensions persist between Texas House and Senate

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In a fitting end to an antagonistic legislative session that grew exponentially more dramatic in its final days, Texas House and Senate lawmakers’ inability to compromise has pushed several Republican priority bills to their demise.

One by one, once-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. The failure to pass measures on school choice, border security and, for now, property taxes all but assures Gov. Greg Abbott will call the Legislature back for a taxpayer-funded special session to try again.

Abbott’s office did not immediately respond Sunday to questions about the failed bills or whether he’ll call for a special session.

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.

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.

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.

Perhaps most embarrassing for Republican lawmakers was their inability to reach a deal by the deadline to provide property tax savings to Texas homeowners and business owners. 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.”

But as the clock wound down on the legislative session, GOP leaders in the House and Senate couldn’t bridge the chasm between their two proposals — though they hadn’t officially declared the main property tax bill dead as of Sunday morning. They 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.

The inability to reach a compromise proved to be a major failure for the GOP. Not only did Abbott, Patrick and Phelan all list property taxes among their top priorities, but there was little Democratic resistance. The Senate passed its proposal 31-0. The final House vote on its version was 147-0.

It’s possible, though unlikely, lawmakers could make a last-second move Sunday outside of regular procedure to address property taxes.

Another bill almost certainly left behind was a major proposal designed to boost the construction of new gas-fueled power generators. Senate Bill 2627 would have created a low- or no-interest loan program funded by the state for companies that wanted to build or upgrade such plants. It also would have paid a bonus to companies that got the new plants connected to the grid within a certain amount of time. Legislators set aside $5 billion in the budget to fund the proposal in case it passed.

The failure to find compromise on the bill by the deadline threw the future of a second significant electricity bill into question over concerns that the Senate would tank it in retaliation for SB 2627’s failure. That bill, House Bill 1500, contained parameters for a new financial tool that is expected to make electricity costs rise for most Texans in an effort to help gas-fueled and coal-fueled generators make more money.

The uncertainty left some to wonder whether House changes to SB 2627 would simply be accepted by the Senate on Sunday, though it is unlikely.

Before the deadline, House and Senate lawmakers also failed to compromise on a new economic incentives package to help lure large companies to the state — a House bill that also had the support of the governor. Negotiators had not yet declared House Bill 5 dead as of Sunday morning, leaving the possibility for last-minute rule changes in the chambers.

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.

House State Affairs Chair Todd Hunter, R-Corpus Christi, and Senate Business and Commerce Chair Charles Schwertner, R-Georgetown, were faced with what ultimately appears to have been an insurmountable task: bridging a large gulf between the two chambers on even the basic elements of the plan — including who to let in, how many jobs to require, what guardrails should be in place and, most notably, whether to let the school districts where the companies were located get paid extra as part of the deal.

Karen Brooks Harper and Emily Foxhall contributed to this story.

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