AUSTIN – Attorney General Ken Paxton has intervened in a case involving property tax that he alleges violates the Texas Constitution and state law.
The suit involves the Local Option Homestead Exemption, which Paxton says local school districts are violating the Texas Constitution and state law by reducing or appealing the option.
“Paxton intervened in this case to defend the integrity of the Texas Constitution and Texas law against a cohort of school districts that have been intentionally thwarting it,” Brantley Starr, deputy first assistant attorney general, told the Southeastern Texas Record.
The suit was brought against a number of school districts in Texas, including White Deer Independent School District of Carson County and its school representatives.
The state of Texas is intervening in the case under Rule 60 of the Texas Rules of Civil Procedure to protect Texas citizens under Senate Bill 1 (SB1), which increases the residence homestead exemption to $25,000. Before 2015, when the bill went into effect, the exemption was $15,000.
As part of SB 1 school districts that adopted the optional homestead exemption for the 2014 tax year would not be able to reduce or repeal the amount through 2019. School districts would also receive assistance through SB 1 if they were to receive a loss in revenue due to the changes in the homestead exemption.
“SB 1 required school districts to freeze their 2014 local option homestead exemption rates through 2019, which is a framework the voters approved by a wide margin last November,” Starr said. “This cohort of school districts intentionally lowered their 2014 optional homestead exemption rates from 2014 levels and continues to certify those unlawful rates.”
Many school districts, including White Deer, reduced their local option homestead exemption after SB1 was passed but allegedly before voters passes Senate Joint Resolution 1 (SJR1), adopting their own exemption amount for the 2014 to 2019 tax year. The districts were notified of their obligation to SB1, but according to Paxton, they failed to comply with the legislation. White Deer is one of 24 school districts that were not in compliance with SB 1.
Paxton stepped in when it became evident the school districts were not going to follow the legislation set forth by SB 1 by using their own methodology to collect taxes even after voters approved SJR 1 on Nov. 3, 2015 to lock in homestead exemptions rates for the 2014 tax year. Plus, under SB 1, Texas will continue to fund these school districts for any lost revenue during 2014 to 2019, making it unnecessary for these schools to maintain the higher homestead exemption.
“Homeowners in these school districts have been paying unlawfully high property taxes,” Starr said. “If successful, this citizen-led lawsuit will return that money to the homeowners who file suit and prevent the local officials from violating the law in the future. The school districts that are violating the law could also be forced to pay attorney’s fees to the lawyers representing the homeowners and the state.”