Six out of 10 Texas homeowners age 65 and older now pay nothing in school property taxes, a state Senate analysis found.

The finding, first reported by Houston Public Media, comes as Clear Creek ISD faces a $23 million budget shortfall and state funding tied to senior homestead tax limitations has dropped sharply. In League City, where 13% of residents are 65 or older and three-quarters of households own their homes, the squeeze is playing out on both sides of the ledger.

State Sen. Paul Bettencourt, R-Houston, presented the data at a Sept. 1 Senate Local Government Committee hearing. His office filed public information requests with appraisal districts in all 254 Texas counties, according to Community Impact. Nearly 2.4 million Texans now pay $0 in school property taxes. About 39% of all homeowners hit that zero mark in 2025.

The savings are steepest for seniors. The average school tax bill for homeowners 65 and older fell 33%, from $565 in 2024 to $380 in 2025, according to Bettencourt's data. For all homeowners, the average bill dropped about $140, from $1,037 to $896.

Texas lawmakers boosted the state homestead exemption on school taxes to $140,000. Seniors get $200,000 shaved off their home's taxable value. If a home is valued below the exemption, the owner pays nothing to the local school district.

What it means for CCISD

That math hits Clear Creek ISD directly. State funding tied to homestead tax limitations for elderly and disabled residents fell from $7.8 million in 2023-24 to $2.7 million in 2025-26, according to district budget documents presented at a May 4 workshop.

CCISD Chief Financial Officer Alice Benzaia told trustees at the Aug. 24 board meeting that exemptions are flattening the district's tax base. "Because of these homestead exemptions, our taxable values have remained relatively flat in light of our market values increasing significantly," Benzaia said at the time.

The district approved a $430 million-plus budget with a $23 million deficit on Aug. 24, Houston Public Media reported. Enrollment has dropped to 38,780 students, down from 42,388 in 2019-20. District spokesperson Elena Polsen said 81% of CCISD taxpayers do not have school-aged children.

CCISD's projected tax rate for the current fiscal year is $0.969 per $100 of assessed value. The board was scheduled to formally adopt that rate at its Sept. 28 meeting. By fiscal year 2027-28, district officials project the shortfall could reach $23.5 million and deplete capital and contingency funds, leaving what officials have called a "two-year runway."

The district is weighing a potential $19.1 million voter-approval tax rate election, known as a VATRE, as early as fall 2027, according to Community Impact.

Who picks up the tab

Tax policy analysts describe the exemption structure as a generational wealth transfer. Younger, working-age Texans pay state sales taxes that fund the $51 billion property tax relief package in the 2026-27 state budget. Those dollars flow to older homeowners as lower or eliminated school tax bills.

Janelle Fritts, a senior policy analyst at the Tax Foundation, told Houston Public Media that when homeowners stop paying school taxes, "mostly other classes of property are going to be taking up that burden, whether that's commercial property or that's renters."

The pressure could grow. Texas' population of residents 65 and older is projected to nearly double, from about 3.9 million in 2020 to 7.5 million by 2050, according to the University of Virginia's Weldon Cooper Center for Public Service.

Gov. Greg Abbott has proposed eliminating school property taxes for all homeowners. Lt. Gov. Dan Patrick has said he wants to extend the senior exemption to people 55 and older. Ending school property taxes for homeowners entirely would cost an additional $8.6 billion per year, according to the state comptroller's chief revenue estimator, Tetyana Melnyk, who testified before the House Ways and Means Committee on Sept. 15.

League City's own proposed property tax rate for fiscal year 2027 is $0.369 per $100 valuation, with a $200,000 senior and disabled exemption, according to city budget documents from a July 27 council workshop. The city's total taxable appraised value stands at $13.2 billion.

The 90th Texas Legislature convenes in January 2027, when lawmakers will take up property tax policy again.