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Abbott signs $4 billion, two-year tax cuts package

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From left, House members Tony Dale of Cedar Park, John Wray of Waxahachie and Jason Isaac of Dripping Springs join Sen. Paul Bettencourt of Houston and Reps. Drew Springer of Munster, Paul Workman of Austin, Giovanni Capriglione of Southlake and Dwayne Bohac of Houston in watching Gov. Greg Abbott sign a business-tax cut bill.  (PHOTO: Office of the Governor, June 15, 2015)

From left, House members Tony Dale of Cedar Park, John Wray of Waxahachie and Jason Isaac of Dripping Springs join Sen. Paul Bettencourt of Houston and Reps. Drew Springer of Munster, Paul Workman of Austin, Giovanni Capriglione of Southlake and Dwayne Bohac of Houston in watching Gov. Greg Abbott sign a business-tax cut bill. (PHOTO: Office of the Governor, June 15, 2015)

Update at 2:30 p.m.: Includes mention of Bettencourt’s measure to require a supermajority vote by a local governing body before it could increase property-tax revenue, and changes other references to make it clear Abbott signed four bills.

Original item at 10:52 a.m.: AUSTIN — Gov. Greg Abbott on Monday signed into law tax cuts for homeowners and businesses worth $3.8 billion over the next two years.

For good measure, the Republican governor also threw in a bill repealing $250 million worth of professional fees in 2016-2017.

That boosted the total value of tax relief passed by the Legislature over the $4 billion mark in the next two-year, state budget cycle.

“Texas is going to be a more prosperous state,” Abbott said after signing the package at the sleek campus of tech company Advanced Micro Devices on the outskirts of Austin.

“You just got a tax cut,” Abbott began, appearing to speak to AMD executives.

However, they waited until after his bill-signing ceremony to come into an event room and greet him before a cluster of TV videographers, news photographers and reporters.

Abbott repeated recent comments about how he plans to travel the country and globe to urge corporate executives to relocate to Texas. One of the targets, he acknowledged, is the corporate headquarters of General Electric in Connecticut.

“This happens at a time when other states around the country are raising taxes and increasing the cost of doing business — whereas here in … Texas, we are focused on lowering taxes and making the state more affordable for everybody,” he said.”

Abbott, who had most wanted a cut in the state’s main business tax, also praised the property tax relief for homeowners in the package. Eight Republican legislators, three from the Austin area, stood behind him. Abbott gave a signing pen, though, to only one — freshman GOP Sen. Paul Bettencourt of Houston, a key advocate of property-tax cuts.

Abbott said he’s not worried that cutting taxes will make future state budgets harder to write. With $11 billion parked in the state’s rainy day fund and several billion dollars “that we left on the table,” he said Texas is in good shape to handle any economic contraction or emergencies.

“I don’t anticipate them arising but if they do, we are extremely well-positioned,” he said.

The tax-cut package includes a proposed property tax break worth about $125 a year for the average Texas homeowner. The increase in the homestead exemption on school property taxes, though, still must be approved by voters.

On Nov. 3, they will vote on a constitutional amendment increasing homestead exemptions on school taxes to $25,000, from $15,000 currently. It would cost the state $1.24 billion over the next two years.

The legislation assumes voters will approve the constitutional amendment. It requires tax assessors to prepare 2015 tax bills as if the $25,000 exemption is in effect. The “provisional” tax bills would inform voters how much the higher exemption would save them. If voters reject the plan, assessors would send homeowners a supplemental tax bill showing why amounts owed went up.

Some Republicans, especially in the Texas House, have warned that homeowners may not feel the property tax relief much — or for very long. Increasing home values will boost appraisals and other actions by local taxing entities will gobble up the savings, they have warned.

Abbott, though, dismissed the criticisms.

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