|
|
|
|
|
Special session prospects now unlikely...
The only consensus currently conceived in Austin is there is no consensus on school finance in the immediate future.
With procedural deadlines for placing Constitutional Amendments on the November election ballot quickly approaching (September 1), many options for substantive reforms are now no longer available. To many Capitol observers, Senator Florence Shapiro's recent proposal was the last shot with any opportunity, and it appears to have fallen short for now.
Shapiro's proposal does have aspects that have gained some buzz in the halls of the Capitol. The major revenue mechanism expands taxes to a larger base of Texas businesses. A business would be required to pay either a gross receipts tax, payroll tax, or a franchise tax—whichever is lowest. The rates would be as follows: gross receipts around 0.5 percent; payroll tax of 1.75 percent up to $1,500 per employee; or a franchise rate lower than the current 4.5 percent. Currently, some businesses escape paying a significant amount of their franchise tax liability by reorganizing as a Delaware-based corporation.
Other revenue measures in the Shapiro plan included an increase in business license fees, increasing the sales tax and motor vehicle sales tax rates from 6.25 percent to 6.75 percent, and increasing the cigarette tax by 50 cents per pack. These revenue measures would have provided for a 35 cent reduction in the maximum property tax rate, and proposed to further buy-down the rate to a cap of 75 cents in coming years. The proposal also included $1.5 billion in new school funding.
Meanwhile, the pressure to address the school finance issue continues to build. The Texas Supreme Court is scheduled August 9 to begin considering a lawsuit brought by a large group of school districts regarding the adequacy and method of State funding for public education. At the same time, more schools are edging closer to, or reaching, the mandated $1.50 property tax rate cap, limiting their options for increasing budgets. Additionally, many legislators have campaigned heavily on the promise of reforming the Texas school finance system and feel the pressure to show their constituents some results.
Depending upon how and when the Court rules, the legal and political pressure might build to a point that the Legislature and Governor are forced to develop a new revenue and funding system for our public schools. Potentially, a swift and adverse ruling could bring about the prospects of a special session this fall. More likely though, this issue will play a major role in next year's regular session.
In any case, Texas Farm Bureau will work to assure that agriculture and rural schools are treated fairly.
