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School finance and property tax update

From last week.

Rep. Dustin Burrows

Blasting the Senate for taking a symbolic approach on school district taxes, a panel of House lawmakers heavily altered then approved the upper chamber’s version of priority property tax legislation late Thursday. And committee members pointedly included a provision meant to rebut claims that they were not committed to wholesale reform.

The chair of the tax-writing Ways and Means committee, state Rep. Dustin Burrows, said the House had kept a provision in Senate Bill 2 that attempts to constrain school district property taxes. While he and finance experts have said the language needs to be addressed in the Education Code, there “is an intent in the Senate to symbolically express that they are committed to lowering school property taxes,” Burrows said.

“Well, because of that, I want to make sure that the House also expresses its full commitment to lowering people’s property tax bills related to schools,” the Lubbock Republican said.

The Senate had tried to limit schools’ tax rate increases to 2.5%, without an election.

“We actually used a 2.0 number,” Burrows said, “to show that the House is equally as committed to doing significant things this session for the property taxpayers of the state of Texas.”

The insertion of the 2.0 figure may be a dig at hardline conservatives and Senate lawmakers, who have suggested the House gutted its own property tax reform package when they removed school district language from it in March. The lower chamber’s approach, however, has earned the backing of experts who say a separate public education bill is the most feasible way to make changes to the school finance system.

“To do property tax reform for schools, you really have to do it in the Education Code. I think that all of the experts agree,” Burrows said. “This bill has never touched the Education Code. It can’t touch the Education Code, that is House Bill 3,” he said, referencing the lower chamber’s omnibus school finance package.

As adopted in a 8-3 vote Thursday, SB 2 now closely resembles House Bill 2, a companion measure passed by the House committee last month — even taking on the same name: The Texas Taxpayer Transparency Act. The Democratic vice chair of the committee, state Rep. Ryan Guillen, joined Republicans in support of SB 2’s passage Thursday.

In the latest version of the bill:

  • Cities, counties and emergency service districts must hold an election if they wish to raise 3.5% more property tax revenue than the previous year
  • Those entities can increase their property tax levies by $500,000 a year, without triggering an election
  • Other taxing units — namely, hospital districts and community colleges — remain at an 8% election trigger, with Burrows’ citing the inflation of medical and education expenses
  • Homestead exemptions offered by local municipalities can be factored into the revenue growth calculation, preventing cities and counties from being penalized if they offer their residents tax reductions
  • A five-year carry-over provision lets taxing units bank unused revenue growth

[…]

A final change Thursday makes passage of SB 2 contingent on HB 3’s approval.

“These two are tied together,” Burrows said.

See here for more about HB3, and here for more on SB2. Ross Ramsey gets into the politics of the moment, which includes the Republican leadership’s continuing fealty to the property tax for sales tax swap that isn’t going anywhere. It’s hard to compare, because each session is its own story, but it sure feels to me like not a whole lot has happened so far, with less than five weeks to go. The big ticket items dragging along and seeming to go nowhere isn’t unusual, but what else has even made it to the floor of the other chamber? Not that I’m complaining, mind you, I’m just curious. Word is that SB2 will be up in the House today, so we’ll see how it goes. There’s still a wide range of possible outcomes.

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