In 2011, the Texas State Legislator passed a bill creating the 100% Disabled Veterans' Homestead (DVHS) exemption to provide property tax relief to veterans who are 100% disabled. Since the passage of this bill, approximately $19 million in City of Schertz ad valorem tax revenue has been exempted. State law does provide limited relief for cities touching a US military installation who lose more than 2% of their city general fund revenue. However, this existing aid is inadequate for cities who have high concentrations of this exemption.

• In Schertz, the 100% DVHS exemption makes up 19% of all homestead residences. 
• In FY 2023-24, Schertz will exempt approximately $4 million in ad valorem tax revenue, which equals 7.5 cents on the city's tax rate. 

In 2023, during the 88th legislative session of the State of Texas, legislation was proposed to create a dedicated funding mechanism for cities disproportionately impacted and, unfortunately, it did not pass. Ahead of the next legislative session beginning in January 2025, the City of Schertz is proposing a resolution to support legislation that aims to establish a funding mechanism for the DVHS program. 

Key Points of the resolution: 

• Recognizes the valuable contributions and sacrifices of our veterans and expresses support for the original legislation aimed at addressing property tax relief for disabled veterans. 
• Expresses strong support for proposed state legislation that will create a dedicated funding mechanism for the DVHS exemption program. 
• Directs the City Manager and other appropriate city officials to advocate for such legislation, including engaging with state legislators and participating in relevant discussions to support its passage. 
• Emphasizes the importance of exploring all measures to provide financial relief to cities disproportionately impacted by the DVHS exemption.   

To support and advocate for the passage of legislation that would create a dedicated funding mechanism for the DVHS property tax relief program bringing financial relief to cities disproportionately impacted by this exemption. 

Proper funding reimbursement for the DVHS exemption would allow Schertz to address projects and services that have been delayed due to funding such as street repairs, facility additions, and emergency service workers.  

Staff recommends approval of Resolution 24-R-78, authorizing City support of state legislation that would create a dedicated funding mechanism for the DVHS exemption and authorizing the City Manager and other appropriate city officials to actively advocate for the passage of such legislation.

Staff recommends approval of Resolution 24-R-78.