School Finance SystemSpecial Committee Appointed to Study Issue
A special legislative committee will study the state’s school finance system and its impact on local property taxes. Texas property taxes totaled more than $23 billion in 2000, with school property taxes accounting for $13.4 billion or almost 58 percent of the total.
The last special committee to look at not only school funding but also the entire property tax system was in 1996. Then Governor George W. Bush asked the Texas Legislature and State Comptroller to assist in a multi-agency work group to develop possible replacements for the school property tax. The group reviewed a variety of taxes and developed a series of property tax alternatives. The Texas Legislature increased the homestead exemption for school taxes during the 1997 session. School property taxes totaled $10.4 billion for tax year 1997.
Before the next legislative session in 2003, a special legislative committee composed of 18 members will look again for a better way of paying for Texas public schools. Lieutenant Governor Bill Ratliff and House Speaker Pete Laney both appointed six members to the committee. Six appointed members are citizens from the general public. State Senator Teel Bivins and State Representative Paul Sadler will co-chair this special committee.
The committee is charged with finding a way to pay for the Texas education system, the fairness of the system, the criteria used to determine revenue to school districts, and the state’s property tax system.
The current school tax system requires wealthy school districts to share their property taxes with poorer districts. In July in Travis County, several wealthy school districts challenged in district court that the current school finance system created a state property tax, prohibited by the Texas Constitution. These districts argued that the $1.50 per $100 tax rate limit for maintenance and operations (M&O) created such a state tax. State District Judge Scott McCown disagreed and dismissed the lawsuit.
In tax year 2000, about 18 percent - 186 school districts - adopted an M&O rate of $1.50. About 35 percent - 366 districts- adopted M&O rates between $1.40 and $1.50 per $100 of value.
More about this select committee’s meetings and findings will appear in future issues of STATEMENT.
School Finance Select Committee Senators: Representatives: Sen. Teel Bivins, Amarillo, co-chair Rep. Paul Sadler, Henderson, co-chair Sen. Steve Ogden, Bryan Rep. Harold Dutton, Houston Sen. Florence Shapiro, Plano Rep. Kent Grusendorf, Arlington Sen. Eliot Shapleigh, El Paso Rep. Scott Hochberg, Houston Sen. Leticia Van de Putte, San Antonio Rep. Rene Oliveira, Brownsville Sen. Royce West, Dallas Rep. Todd Smith, Euless Citizens: Kent Caperton, former senator, Bryan Will Davis, former State Board of Education, Austin Craig Foster, Equity Center, Austin Lyndon Olson, former State Board of Insurance Mark Stiles, former state representative, Beaumont David Thompson, education attorney, Houston