AUSTIN — Texas Attorney General Ken Paxton recently supported a
property tax lawsuit against the Kilgore Independent School District.
Paxton said the Kilgore district violated not only state law but also the Texas Constitution when it repealed the district’s local option homestead tax exemption.
Paxton intervened in a similar case Sept. 15
against the White Deer Independent School District.
In an effort to help Texas residents lower their property
taxes, the Texas Legislature enacted property tax relief. Senate Bill 1 (S.B.
1) which increased the homestead exemption from $15,000 to $25,000. This tax break
would not hurt school districts’ funding, as the legislature would pay for any
funds lost in the school budget due to the tax breaks.
When the Texas Legislature passed S.B.1 and a Senate joint resolution (SJR) last May, it
received unanimous support. 138-0 in the
House and 25-0 in the Senate. Also in 2016, 86 percent voters ratified the amendment,
which marked one of the highest amendment margins in recent state history.
However, Kilgore opted to reduce or repeal their local option
homestead exemption and, instead, assess its own tax rate on homeowners, in violation of the law and bringing the lawsuit in which Paxton is
According to case documents, Kilgore had ample time to comply
with the Senate bill. Once voters approved the Senate joint resolution Nov. 3, 2015, the law officially changed, and all existing optional
homestead exemptions in 2014 were locked in at that rate through 2019.
the lawsuit was filed, officials and public figures repeatedly notified school
districts such as Kilgore about their obligation and opportunity to revert to 2014
optional homestead exemption rates.
On Sept. 9, 2015, Paxton shared this notification
publicly with the comptroller of public accountants and later explained
in an official opinion that, “Subsection 11.13(n-1) of the tax code prohibits a
school district, municipality or county from repealing or reducing the local
option homestead exemption from the amount that was adopted for the 2014 tax
year through the 2019 tax year.”
In other words, an attempt to alter a local option homestead
exemption from what it was in 2014 would be in violation of the law.
The Texas Association of School Boards notified all the
school boards of Paxton’s opinion and encouraged compliance. A month later, the
Office of the CPA asked 24 school districts “whether you were considering
reinstating your 2014 local option homestead for the percentage for the 2016
tax year in light of the attorney general’s KP-0072.”
Finally, on June 15, 2016, Paxton and the Texas Education
Commissioner sent a joint letter to 21 school districts to let them know they
were still in violation of S.B. 1 and urged them to comply.
"Local government cannot be allowed to simply ignore laws
they do not like,” Paxton said. “This is a blatant attempt by a school district to take away from Texas homeowners, without their consent, what rightfully
belongs to them—their own money. I am confident the local taxpayers and
the state will prevail in this lawsuit and the suits to come.”
Below is a list of the other school districts that reduced or
repealed their local option homestead exemptions in 2015: