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Everyone agreed: Texas lawmakers — gifted with a historic budget surplus — needed to find a way to rein in skyrocketing property taxes this year.
And yet it took more than six months to accomplish, requiring a regular legislative session and two special sessions — generating a lot of bad blood at the top of state government in the meantime.
The political ordeal marked one of the most intractable debates at the Legislature in recent memory. And it exposed new divides in the leadership trio, most notably between Gov. Greg Abbott and Lt. Gov. Dan Patrick.
Jim Henson, director of the Texas Politics Project, said it is not unprecedented for lawmakers to need multiple back-to-back sessions to hash out a major policy issue. But this saga, he said, stood out for the escalation in tensions among state leaders.
“In this case, what’s interesting to me and does make it distinctive — at least in this generation’s experience — is just how long these conflicts simmered before they broke out into the open hostility we’ve seen in the last six months,” Henson said.
That is especially true of Abbott and Patrick, Henson added, but even in the relationship between Patrick and House Speaker Dade Phelan, “we’ve gone from underhanded sniping to outright hostility in public.”
Leaders were already working to heal the wounds as the property tax package cleared its final hurdles Thursday at the Capitol.
“Coming into this session with a $34 billion surplus, we knew this would be the most contentious issue that we faced,” Phelan said from the dais after the package passed. “And we had many competing ideas. The Senate had theirs. The governor had his, we had ours. But we all came together.”
Phelan said he wanted to “compliment the lieutenant governor in particular,” adding that they had “some wonderful conversations.”
Still, lawmakers know there is the potential for plenty more acrimony. Abbott has vowed to call another special session on “school choice,” his push to give parents taxpayers dollars to take their kids out of public schools. That is another issue over which the House and Senate were at bitter loggerheads throughout the regular session.
And lawmakers are still watching to see if Abbott will make good on his word and let them revive dozens of bills he vetoed last month in an unsuccessful effort to break the property tax impasse in the first special session. Abbott said a tax deal was more important than the bills, which could wait until after a deal was struck. Patrick openly derided the vetoes as an ineffective negotiating tactic.
It appears the governor is giving lawmakers a breather — for now.
“Other items will be on a future special session that we will have this fall,” Abbott spokesperson Renae Eze said in a statement after the deal was announced.
How it came together
Ultimately, each side got at least some of what it wanted in the deal.
The Senate got the homestead exemption increase that was a centerpiece of its plan since January, passing property tax savings directly to homeowners. The House got a semblance of tighter appraisal caps that it had long been championing. And Abbott got a deal he could sign to finally deliver on his campaign promise of the biggest property tax cut in Texas history.
Patrick emerged as the biggest political winner, though. He fought for the $100,000 homestead exemption from the start of the first special session, despite Abbott’s agenda calling exclusively for what’s called “tax rate compression,” or reducing the property taxes collected by school districts.
Patrick wagered that Abbott would ultimately not oppose a $100,000 homestead exemption — and he was right.
Patrick has said a turning point in the stalemate came when he and Phelan finally met face to face at the start of the second special session. The July 5 meeting lasted about half an hour and came after weeks of back-channel negotiations involving staff and lawmaker surrogates.
“We pretty much agreed in principle on the big things in this bill in that meeting,” Patrick later said in a podcast interview. “I thought we might because we had a lot of discussion for six months. He knew where we were in the Senate and our members. I knew where he was and his members in the House.”
Afterward, Sen. Paul Bettencourt, R-Houston, and Rep. Will Metcalf, R-Conroe, continued to negotiate on behalf of their respective chambers. Patrick and Phelan kept talking, too, including on the phone as late as 9 p.m. the night before the deal was announced, according to the lieutenant governor.
“We had what seemed like a lifetime of discussions over these measures,” Metcalf said on the House floor Thursday.
Patrick and Bettencourt also identified June 20 as another key date. That was when the Senate passed a new version of its property tax plan that included a franchise tax provision, seeking to appeal to the House’s interest in providing more relief to businesses.
Afterward, Patrick and a bipartisan group of senators held a news conference trumpeting the new olive branch to the House.
That “sent a strong message that it wasn’t just Dan Patrick fighting for the homestead exemption,” Patrick said.
By the weekend after the Patrick-Phelan meeting, optimism was rising. As he toured his district that Saturday, Rep. Ryan Guillen, R-Rio Grande City, fielded multiple questions from constituents about the state of negotiations. In Karnes City, he told one constituent that it has been “tough going, but we’re talking again” — and predicted a resolution “very soon.”
“You’ve got a supermajority in both houses that would vote for any property tax relief proposal that you’d put in front of them,” Guillen said. “It’s just a matter of just getting it done and agreeing to something.”
Leadership tensions rise
Despite the celebratory tone that punctuated the deal’s passage Thursday, the stalemate extracted a major political toll on all three state leaders. Patrick and Phelan already had a poor relationship, but the property tax stalemate saw the lieutenant governor disparage the speaker more than ever.
“This is the guy who is the weakest … speaker we’ve ever had,” Patrick said at one point.
The most significant rupture, however, was between Abbott and Patrick. Since they first took their respective offices in 2015, they have worked to come off as cordial allies — keeping their disagreements private.
Abbott’s initial siding with the House changed that. It prompted Patrick to issue his first-ever public criticism of Abbott, at one point challenging him to a “Lincoln-Douglas-style debate” over property taxes.
When Abbott was threatening to veto Senate bills, Patrick said a “hopping mad” Houston businessman called him. Abbott’s office was threatening to veto a bill the businessman wanted — unless he could convince Patrick to acquiesce on a property tax deal by the veto deadline.
“I’ve never heard of anything like that,” Patrick said. “This is crazy.”
Abbott’s office did not respond to a request for comment on the episode.
Once the vetoes happened, Patrick mocked them as a “big nothingburger.”
“We’re not coming to the table because you vetoed bills,” Patrick told Lubbock radio host Chad Hasty on Tuesday. “We’re coming to the table when we come to the table because we have the right package, and that’s what happened.”
Abbott’s gambit and what’s next
As for Abbott, his aides believe he used every lever of power available to try to produce a deal. He aggressively wielded the bully pulpit, the veto pen and the special-session call.
But he also found himself in a quagmire after initially backing the House. As it became clear Patrick would not back down, Abbott gradually retreated and admitted he would accept anything the two chambers could agree on.
Henson, the director of the Texas Politics Project, said the ordeal may have reinforced negative impressions of Abbott among Austin insiders. But voters are probably more concerned with the outcome than the process, Henson said.
“Abbott will get to say, ‘I presided over the fray and I led Republicans to the promised land,’” Henson said. “And once you get to the promised land, you pay less attention to what the journey was like.”
If the property tax deal marks a new era of cooperation between the House and Senate, they will need much more collaboration going forward. Abbott’s “school choice” special session will center on another highly contentious proposal — and Abbott has suggested he will continue to tie it to more popular education issues, like teacher pay raises.
Knowing that, Democrats pushed hard to attach school-funding proposals to the property tax plan as it headed toward passage Thursday. They were unsuccessful.
“Our schools are hurting, and we’re told to wait till October,” Rep. Gina Hinojosa, D-Austin, said on the House floor, predicting the House would again come up with a “great school finance bill” but watch it fall victim to gamesmanship over school vouchers. “Why are we going to let them do that to us? Fool us, shame on you. Fool us twice, that’s our fault.”
Anticipating the inevitable showdown, Phelan has already assembled the Select Committee on Educational Opportunity and Enrichment to study issues likely to arise this fall.
While Abbott has not announced the specific timing of the next special session, lawmakers are eyeing October because the Senate will conduct the impeachment trial of suspended Attorney General Ken Paxton starting Sept. 5. Patrick has said he expects the trial to last up to three weeks.
Bettencourt is optimistic that lawmakers will be newly cooperative whenever they return.
“If you do it once, you can always do it again,” Bettencourt said in an interview, “and in this case, we’re doing it right, so why not continue?”
