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After a monthslong standoff among Texas’ top Republicans, state GOP lawmakers finally struck a deal this week on how to cut Texans’ property taxes.

The $18 billion compromise between the Texas House and Senate — which includes more than $5 billion approved for property tax relief in 2019 — would lower taxes for the state’s 5.7 million homeowners and add a temporary cap on appraisal increases for some non-homesteaded properties.

It would also cut franchise taxes for small businesses and send billions of dollars to school districts so they can cut their taxes across the board. However, none of that money will go toward additional public education funding, according to legislation filed by state budget leaders on Monday.

The proposal must clear both chambers before it heads to Gov. Greg Abbott’s desk. Abbott said he looks forward to approving it. Then voters must pass the plan in a constitutional election in November. If voters approve the deal, the cuts would start with the 2023 tax year.

“I promised during my campaign that the state would return to property taxpayers at least half of the largest budget surplus we have ever had,” Abbott said in a statement after Monday’s announcement.

“(Monday’s) agreement between the House and the Senate is a step toward delivering on that promise. I look forward to this legislation reaching my desk, so I can sign into law the largest property tax cut in Texas history.”

Lt. Gov. Dan Patrick said the last week of negotiations among himself, Texas House Speaker Dade Phelan and members of both chambers “made the difference.”

“It has been a long road, but this is a great day for all property owners,” Patrick said. “It may have taken overtime, but the process has produced a great bill for homeowners and businesses.”

The legislation, expected to be passed this week, allocates about $12.6 billion to reduce the school property tax rate by 10.7 cents per $100 valuation for homeowners and business properties. It also includes an increase to the state’s homestead exemption from $40,000 to $100,000 at an estimated cost of $5.3 billion, and some extra relief for seniors and property owners with disabilities, averaging an extra $170 per year.

The Senate bill’s author, state Sen. Paul Bettencourt, R-Houston, said the deal would save the average homeowner about 41.5 percent on property taxes each year, or an average of about $1,300 per year.

“Taxpayers WIN! All residential and commercial real property WIN! 5.72 million homesteaders WIN!” Bettencourt said in a written statement.

Another part of the plan, which in a way revives a contentious idea the House had previously proposed, would institute a three-year, 20 percent cap on appraisal increases for commercial and non-homesteaded properties valued at $5 million or below — a number that could be adjusted by the comptroller with inflation each year.

Leaders referred to that part of the bill on Monday as a “circuit breaker” program, but it’s somewhat of a misnomer. Unlike programs in other parts of the country with the same name, the Texas proposal does not calculate property taxes based on a person’s income or ability to pay, nor does it specifically seek to benefit lower-income taxpayers.

“Reducing property taxes, providing relief to small-business owners, and reforming our appraisal system will ensure economic growth and prosperity, and this agreement is a significant victory for all Texans,” Phelan said in a statement.

The new property tax relief bill, a franchise tax relief bill and the constitutional amendment required to enact the cuts were filed Monday.

The deal marks the end of a stalemate among the state’s top Republicans that lasted nearly seven months as they butted heads over how to dole out $12.3 billion in new tax breaks budgeted by lawmakers earlier this year.

Republicans came to Austin this year with a nearly $33 billion surplus and big promises to use a big chunk of it to provide tax relief to Texas property owners, who pay some of the highest property taxes in the nation.

The Texas Tribune is a nonpartisan, nonprofit media organization that informs Texans — and engages with them – about public policy, politics, government and statewide issues.