Shared goal, different solutions: Reining in school property taxes

Daniel Saldana, 9th grade student at Elsik High school, looks up during a quiz about biomolecules during an afternoon intervention program on April 19, 2018. Photo by Pu Ying Huang for The Texas Tribune

Being born and bred in Austin and (mostly) embracing the quirks of this great city, I was certainly appreciative of Vance Ginn's professed goal to help Keep Austin Weird. However, his proposal to achieve that goal creates fiscal policy that pits one Texas issue against another equally important issue, and could potentially harm both Austin and Texas.

Property taxes are too high, and have severely burdened property owners who can no longer afford to live in their homes or keep their businesses open. Texas has chosen to rely on a two-legged stool of sales and property taxes without the balance of the third leg (third rail?) of an income tax, creating more demand on those revenue sources. Our per capita sales tax ranks 5th-highest while property taxes rank 6th-highest in the nation. So right off the bat, we’ve chosen a system with relatively high taxes.

In the case of property taxes, we're the victims of our own success. Housing demand has driven up prices and, consequently, the taxes assessed on the property. Even then, the real culprit is our dysfunctional school finance system that allows increased local property tax collections to offset the state’s share of public school funding. The proposal by the Texas Public Policy Foundation (TPPF) to eliminate the local tax for school maintenance and operations (M&O) sounds promising at first, but could place a stranglehold on all other state programs. What if the courts require better services for Texas foster care youth? Or if the federal government requires the Texas Education Agency to provide for hundreds of thousands of previously unidentified special needs students? Or if a natural disaster wreaks havoc on our economic drivers? Too bad — because for this proposal to work, any growth in spending would be earmarked for property tax reduction rather than unanticipated expenses.

We’ve also seen a proposal from Gov. Greg Abbott, who preempted the Legislature's School Finance Commission and came up with his own plan to reduce property taxes. While his plan doesn’t completely eliminate the M&O property tax, it does cap the local revenue a school district is allowed to generate. Public school advocates are rightly concerned about how this plan would enable schools to pay for full-day pre-K, shore up their college-ready curriculum and create incentive pay for teachers — all of which have been declared necessary by the commission’s Outcomes Working Group to meet the state’s goals in 60x30TX. Just ask any of us who were around in 2006 how it worked when the Legislature reduced school property taxes by one-third and capped the amount districts can tax. Though promising at the time, property taxes immediately started to grow again, school districts saw fewer dollars per student, tax caps allowed no room for growth and the Legislature methodically whittled away at the very tax scheme it had created as a swap for the decrease in property taxes.

So I return once more to what I’ve been saying for some time: Under our current system, you can't fix school finance without fixing property taxes, and vice versa. If we decide to prioritize one over the other, my concern is that the “other” priority will be tossed and forgotten.

The real issue we should be considering is how we can equitably shift the tax burden to help property taxpayers while simultaneously reaffirming our constitutional duty to our schools and students. Businesses, civic leaders and the people of Texas are not — and should not be — willing to accept proposals that basically sacrifice a generation of public education students to campaign rhetoric disguised as policy solutions.

Like Mr. Ginn, I want to go home to the Armadillo. To a time where I could work part-time, attend UT full-time, afford rent for an apartment, buy gas for my compact car, and still be able to frequent the Armadillo and Soap Creek Saloon. But that’s no longer the world we live in, and it hasn’t been for some time now. The vibrant and weird Austin of today is fueling a good part of the Texas success story. Not only do we need to rein in property taxes, but we also need to adequately and equitably fund an educated workforce pipeline. Getting something for nothing is a pipe dream, and I put away those pipes many, many years ago.

Donna Howard

State representative, D-Austin

@DonnaHowardTX

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