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Will any tax overhaul include farm exemptions?

One possible source of school finance revenue is a change to the way farmland is evaluated for property tax purposes.

[A] growing number of legislators would like to add a revamp of the agricultural valuations to the list.

Rep. Sylvester Turner, D-Houston, said the state could add $400 million to its school finance coffers by tightening the law.

“A lot of weekend farmers get an ag exemption and agriculture is not their primary income,” said Sen. John Whitmire, D-Houston. “If we’re going to really, really examine school finance and our tax system, everything should be on the table. No sacred cows.”

Whitmire is one of several Houston-area lawmakers who receive ag valuations on property they own. He said his farm near Chappell Hill is not a weekend operation; he pays a family to manage 100 cows on 300 acres.

Across the state, $91 billion in property value is taken off the tax rolls. The loss in revenue to school districts tops $1.5 billion.

In comparison, the state-mandated $15,000 homestead exemption costs school districts statewide $1.1 billion.

The state’s reliance on local property taxes to fund nearly 60 percent of the $30 billion public school system has many homeowners straining under ever-increasing property tax bills. A homeowner with a large lot in an urban area pays full market value on the unimproved land.

And those getting the breaks are increasingly less likely to be family farmers and ranchers. According to the state comptroller, $409 million in agriculture productivity tax savings goes to out-of-state interests and $500 million goes to Texans whose family income is more than $90,000.

There’ll be resistance to this idea, partly because of the still-prevalent romanticization of rural life, and partly because there’s a lot of legislators from rural districts, but if everything really is on the table (no sure thing), it could go somewhere. Given that as the article notes many of these exempted farms are owned by corporations, including out of state corporations, there ought to be some room for negotiation. We’ll see.

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