The Texas Tribune has called the elections on Propositions 11 and 13, which cut property taxes for homeowners, with an additional cut for disabled Texans and those over the age of 65.

State Sen. Paul Bettencourt, R – Houston, who authored both tax exemption bills, released a statement Tuesday night following the victory. “These measures will provide much-needed school property tax cuts statewide for Texas taxpayers,” Bettencourt said in a statement.

Here’s what you need to know about these two items.

What do Props 11 and 13 address?

Propositions 11 and 13 lower property taxes by increasing the allowable property tax exemptions for homesteads.

Proposition 11 increases homestead property tax exemptions for elderly and disabled owners. Exemptions would bump from $10,000 to $60,000 of the market value of a homestead.

Proposition 13 is a more far-reaching exemption. It increases exemptions from school district property taxes from $100,000 to $140,000 of the market value of a homestead.

Arguments in favor of the amendments

According to Bettencourt’s office, the exemptions would save 5.7 million Texas homeowners about $484 per year, $907 per year for over 2 million seniors, and $2,500 per year for small businesses.

Combined, the two proposed amendments could help seniors and disabled people across Texas see up to $200,000 in their homestead property tax exemptions.

During legislative hearings, some experts project, if approved, Prop 11 would allow between 80% and 90% of seniors to pay $0 on property taxes.

Arguments against the amendments

Passing Props 11 and 13 would result in a projected $3 billion loss of revenue for schools.

However, Bettencourt said the state would use its budget surplus to offset this cost.

Some worry that property tax exemptions will not alleviate the tax burden on Texans, but instead shift it elsewhere.

Chandra Villanueva, director of budget and policy at Every Texan — a nonprofit that advocates for equity across a range of public policy topics — said creating a permanent property tax exemption in the state constitution will weaken a key source of state revenue.

She compares taxation in other states as a three-legged stool: income tax, property tax, and sales tax. Texas does not have an income tax.

“When you start shaving away at the property tax over and over again, it just puts a greater reliance on the sales tax. The sales tax is our most regressive tax and it’s the most volatile,” Villanueva said.

What qualifies as a homestead?

In Texas, a person must own and occupy a property as their primary residence to qualify as a homestead.

To apply for homestead tax exemptions, ownership and occupancy must be fulfilled by Jan. 1 of the tax year for which they are applying for exemptions.

Homesteads in the state can be classified as urban, rural or a business homestead.

Urban homesteads are properties up to 10 acres within a city subdivision. The property must receive at least three municipal services, such as water, sewer and electricity.

Rural homesteads are primary residences not located in a city or town. They are limited to 200 acres for a family or 100 acres for a single individual.

Business homesteads are urban properties that act as home but also have a business operating out of it. The tax exemptions and creditor protections of a homestead protect individuals, not business entities like corporations or LLCs.

Original Article by: Audrey Wong, Sebastian Garcia, Dylan McKim