Councilmen John Courage (D9) and Clayton Perry (D10).
Councilmen John Courage (D9), left, and Clayton Perry (D10) would like to increase the homestead property tax exemption for San Antonio residents. Credit: Scott Ball / San Antonio Report

This story has been updated.

During initial budget discussions on Friday, two Northside councilmen joined forces to push for increased homestead exemptions in San Antonio.

City Council members hunkered down Friday for an all-day meeting reviewing a draft budget and presenting their personal priorities for fiscal year 2022. Councilmen John Courage (D9) and Clayton Perry (D10) both advocated for increasing the local homestead exemption to 5% as one of their priorities. Right now, the homestead exemption shaves $5,000 off a home’s appraised value, reducing the tax bill the homeowner pays.

That $5,000 is the minimum a homestead exemption can be under state law. Because San Antonio must express its homestead exemption in percentage form, it uses .01%. For all practical purposes, however, the relevant figure is $5,000.

San Antonio continues to invest in programs for low-income residents, such as the Under 1 Roof program, and City Council recently approved a $2.9 million one-year pilot program to use a downtown hotel as a low-barrier homeless shelter, Perry pointed out.

“But when it comes to homestead exemptions, where we can apply something that affects a broad range of homeowners — homeowners that are struggling with that property tax increase every year — we’re hesitant about that, and I’m not sure why … and I’m disappointed about that,” he said.

Perry and Courage got the first homestead exemption passed in 2019 with the unanimous approval of their council colleagues. That exemption only applies to a homeowner’s primary residence, considered their “residence homestead.” Perry hopes to eventually match Houston, Dallas, and Fort Worth’s homestead exemption of 20%, which is the maximum allowed by law.

Councilman Manny Pelaez (D8) decried the increased homestead exemption proposal as “meaningless,” saying the annual savings for most people would be minimal. If a home is valued at $100,000, the annual tax savings is $28 with the current homestead exemption and would continue to be $28 a year if the homestead exemption were increased to 5%, because of the current $5,000 minimum exemption. For homes valued at $200,000, that would rise to $56 a year, and homes valued at $300,000 would save $84 a year. The average homestead in San Antonio is valued at $195,730. 

“If we were to do a survey in District 5, let’s say, or 4, ‘Would you rather not spend $4.30 a month or not have sidewalks?’ I bet the answer would be, ‘No, I’d rather have sidewalks,” Pelaez said.

Homestead Exemption Scenarios Credit: Courtesy / City of San Antonio

San Antonio already has property tax exemptions in place for homeowners 65 years and older and homeowners with disabilities, the city’s chief financial officer, Ben Gorzell, told council members Friday.

Forty-five percent of the homesteads in the city have exemptions, which translates to $65.8 million in property tax income the city will not collect. Of that total, $6.1 million comes from the 0.01% homestead exemption.

Councilman Mario Bravo (D1) pointed out that though other large Texas cities have higher homestead exemptions, those cities do not specifically target property tax relief for senior citizens. Among large Texas cities, only San Antonio, Corpus Christi, and Fort Worth have property tax freezes for seniors.

“We’re doing what the other cities aren’t doing, and we’re protecting senior citizens … so that changes the bottom line at the end of the day,” he said. “We have to look at the whole picture. I think we’ve made the right move protecting senior citizens. And I don’t know that you can do both. I don’t think you can do both.”

Councilwoman Melissa Cabello Havrda (D6) said that in her district, homes usually fall in the $100,000 to $300,000 property value range. Those are the homeowners who need the most help yet would experience the least relief under the proposed increase, she pointed out, while the city would miss out on revenue to invest in areas such as public health and senior services.

“I supported [the homestead exemption] a couple of years ago when we initiated that,” she said. “I really believe and still believe that it was the right thing to do.” But seeing the numbers on how little relief an increase would bring, she said, was “sobering.” 

While affordable housing topped the priorities of residents in District 2, and senior services was a No.1 priority for District 5 residents, the city’s budget feedback survey for the community showed that overall, people wanted to see more investment in streets and sidewalks and public health, Assistant City Manager Jeff Coyle said.

Just over 9,000 residents responded to the city’s budget feedback survey, although there was an uneven distribution of geographic location among respondents. Almost 1 in 5 survey respondents live in District 9, while Districts 1 through 8 each made up less than 10% of the response. (Almost 20 percent of respondents indicated that they did not know which district they lived in.)

Coyle said his department would do more targeted outreach in the following weeks, block-walking in districts with lower response rates. The city will continue to gather community feedback through its survey on the budget through July 23. Complete the budget input survey here.

The proposal ultimately did not gain support from the majority of Council and so will not move forward, Perry said in a release after the daylong meeting. “However,” he said, “property tax relief will remain a priority of mine.”

Also Friday, Assistant City Manager Colleen Bridger presented the five year strategic growth plan for the San Antonio Metropolitan Health District that she shared with a council committee earlier this month. As currently proposed, the first two years of increased Metro Health investment would be funded entirely by grants. General fund dollars would eventually be integrated starting in year three, and by year four and five, new investments would be wholly supported by the general fund.

Friday also marked Bridger’s last presentation to City Council; her last day is July 19.

City staff will bring a proposed budget back to council members on Aug. 12. Council is scheduled to vote on a final budget on Sept. 16.

Jackie Wang

Jackie Wang is the local government reporter at the San Antonio Report.