The Texas Senate Committee on Finance convened on May 14, 2025, to discuss critical legislation aimed at supporting local governments disproportionately affected by the Disabled Veterans Homestead Exemption. This exemption, which honors the sacrifices of Texas's over one million veterans, has led to significant financial challenges for municipalities, particularly those near military installations.

A key focus of the meeting was House Bill 2894, which proposes to expand eligibility for state aid to local governments experiencing a loss of ad valorem tax revenue of 10% or more due to the exemption. Currently, municipalities in Bell, Coryell, and Lampasas Counties would qualify for this relief, addressing the financial strain they face in providing essential services to their communities.

Lampasas County officials highlighted the urgency of this issue, reporting a staggering $1.6 million loss in tax revenue last year, which accounted for 16% of their budget. County Judge Randall Hoyer emphasized the need for support, given the county's proximity to Fort Cavazos, home to a large number of veterans. Similarly, Bell County officials noted that their county is the most disproportionately impacted in Texas, with an estimated $11 million loss attributed to the exemption.

The discussions underscored the importance of adequate funding alongside the expansion of eligibility. Officials from Bell County and the City of Killeen expressed concerns that expanding eligibility without sufficient financial backing could exacerbate existing challenges for local governments. Killeen's Commissioner Kent Cagle pointed out that despite significant growth in taxable value, the increase in the exemption has outpaced new construction, leading to a substantial impact on their general fund budget.

The committee heard from various local leaders who voiced their support for the bill while stressing the need for a balanced approach that ensures both expanded eligibility and adequate funding. As the committee continues to deliberate, the outcomes of this legislation could significantly affect the financial health of communities with high concentrations of veterans, ensuring they can continue to provide necessary services while honoring those who have served.