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City of Killeen reimbursed for excessive property tax breaks for disabled veterans

Killeen will have more money in the budget over the next two years thanks to changes made by the Texas Legislature.

KILLEEN, Texas — Texans voted in 2009 to approve a 100% property tax break for disabled veterans, and the state legislature extended the break to surviving spouses in 2012, then made the break retroactive in 2016. 

While the removal of that property tax base affected many Texas cities, Killeen spokeswoman Hillary Shine said Killeen lost 11.3% of that base, costing the city millions of dollars. 

RELATED: Tax break for disabled veterans puts strain on Central Texas cities

Thanks to the efforts of local legislators, however, the city will be getting more reimbursement for the future.  

"We are so disproportionately impacted by veterans exemptions and it's a really difficult spot to be in as a community that supports our veterans," Shine said. "For the state to reimburse us to any degree puts more money in the pot to serve those very veterans."

Texas provided $6.2 million to be used over the last two years for cities and counties affected by the 100 percent disabled property tax break. Killeen was awarded around a third of that money since it's affected more than others by the break. 

During the 2019 legislative session, that pool of money was increased to $20 million. Hilary Shine said before, the city saw a little over $1 million per year in reimbursement, but the next two years look much better.   

"To get $2.5 to $3 million back of that is significant," Shine said. "All of those dollars can be put to use in our community... this definitely gets us closer to becoming whole under the states law." 

Although Killeen will see a benefit under current laws, not all cities are as lucky. Harker Heights is a smaller city also affected by the tax break for veterans. It's losing $1.6 million from the next budget and won't see a cent of reimbursement.

"We do not receive a dime," Harker Heights spokesperson Jerry Bark told Channel 6 back in January. "We don't even get to file for reimbursement."

That's because under current law, a city has to touch a military installation to be eligible. 

Local representatives Hugh Shine and Brad Buckley did sponsor a bill to change this law before the 2019 legislative session, and the bill passed the house by a 145-2 vote. However, the senate never brought up the bill for a vote and the clock ran out. 

Hugh Shine told Channel 6 Monday the fight to get Harker Heights the opportunity for relief is far from over. 

"[I] worked on it last year, in 2017 and this year in 2019. It will be an issue that will continue to be addressed, until there is some provision in there to hold municipalities harmless," Shine said.  

Even with the additional funding available, Killeen will continue to deal with the growing cost of the tax exemptions in the future, but the city said it's a good start.

"Trying to bring recognition to the state level has been a difficult journey, but I think we are making a lot of progress," Hilary Shine said.

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