Property tax relief is inextricably tied to improved school funding. Locally elected, locally accountable school board members know that property tax restraints cannot be addressed in isolation without detrimental effects to Texas schools. Over the past decade, the Texas Legislature has shifted more and more of the burden for funding the state’s public schools onto the shoulders of local taxpayers because of an outdated school finance system. Funding was more equal in 2008, with the state’s share at 46 percent and local taxpayers at 54 percent, according to the state’s comptroller of public accounts. Since that time, the state has used increases in local school tax revenues driven by increases in local property values to supplant — not supplement — its net share. State funding of public schools has decreased to 36 percent, while the property taxpayers account for 64 percent of M&O (maintenance and operations) funding statewide.
Thus, when your school taxes increase year over year, those increases do not benefit your local district as you might expect; instead, those increased local revenues reduce the amount the state spends on your schools, leaving the state with more money in its own accounts for other uses, like roads, public safety, and health or human services.
In a recent news conference, Gov. Greg Abbott, Lt. Gov. Dan Patrick, and House Speaker Dennis Bonnen announced the filing of property tax reform bills. The bills, House Bill 2, by state Rep. Dustin Burrows, R-Lubbock, and Senate Bill 2, by Sen. Pau Bettencourt, R-Houston, would require taxing entities with property and sales tax revenues of more than $15 million to win voter approval before raising property tax collections by more than a 2.5 percent.
These tighter tax caps are designed to address the high growth of local property taxes driven by growth in property values. However, addressing this property tax problem without identifying new and sustainable sources of state revenue to replace local tax collections risks putting public school districts and municipal and county governments into a funding crisis. Texas cannot continue to sustain its “economic miracle” by continually leaving its schoolchildren holding half-empty lunches.
School trustees know that reducing property taxes cannot be undertaken without identifying a long-term strategic plan for funding schools adequately and equitably. Is it realistic to think we can reduce local property taxes and yet turn a blind eye toward the increasing cost of education? How can we increase teacher pay, maintain optimal class sizes and ensure safe and secure schools while driving continuous improvement in student outcomes?
Unfortunately, the state has a history of taking a blind-eyed approach that allows increases in local property taxes to supplant state funding of public school districts. Over the past several decades, the state has not addressed the ongoing needs and increasing demands placed upon Texas public schools. It has been 29 years since the Cost of Education Index has been updated and 35 years since the transportation allotment has been modified.
Additionally, since 1988, the percentage of low socioeconomic students has increased from 36 percent to 59 percent and the percentage of ESL (English as a second language) students has increased from 7 percent to 19 percent. Since 2005, at-risk students (as defined by federal law) have increased from 46 percent to 51 percent — all in the face of increasing academic standards. With nominal inflation increasing nearly 225 percent over that same 30-year time period, increased costs of educating children must get absorbed by local school districts.
Many districts at the highest tax rates are now forced to take money out of the classroom or away from teacher pay to balance budgets. Yet the state has painted itself into a corner, pitting the demands for property tax reform alongside a “byzantine” system of school finance.
The constitutional responsibility of educating 5.4 million Texas students is a huge and solemn task that more than 7,200 locally elected, locally accountable school board trustees take seriously., This deserves the concerted efforts of our elected state leaders as well.
Join me in calling on state leaders to work toward not only property tax relief but also toward an improved system of school finance that ensures adequate and equitable funding for all Texas public schools and the children they serve.
Public education is the only scalable way to educate 5.4 million kids and the only viable option to sustain the Texas economic miracle and to ensure an informed citizenry. Both aims are of primary importance to the future of this great state.