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House passes school finance,
education reform plan...
The Texas House of Representatives has approved its version of comprehensive school finance and education reform with the passage of House Bills 2 and 3. This legislative package is intended to reduce the reliance upon property taxes, spread the tax levy across a broader spectrum of sources, increase school district and student accountability, and reform the school funding mechanism. The education reforms of House Bill 2 passed on March 9 by a vote of 76-71, and the tax reforms of House Bill 3 passed on March 14 by a vote of 78-70.
The tax provisions of the bills would lower the school maintenance and operation property tax cap to $1, and require districts currently taxing below $1.50 to lower their rate by 50 cents. Districts would be allowed to conduct special elections to impose an additional two cents per year, up to a total of 10 cents, for local enrichment.
In order to make up for the property tax reduction, the House would do the following: Give businesses a choice between paying a compensation tax on wages of 1.15 percent or the current franchise tax; raise the state sales tax rate to 7.25 percent; assess an additional 3 percent tax on "snack" food; increase the motor vehicle and boat sales tax to 7.35 percent; expand the sales tax to bottled water, outdoor advertising, cosmetic surgery, car washes, and vehicle repairs; and increase the tax on cigarettes and other tobacco products the equivalent of $1 per pack.
While the House Education Reform bill closely examined most of the formulas used to distribute school funding for the wide variety of special needs, the formulas for small, mid-size and sparse school districts were left unchanged. Additionally, special fixes were included to provide additional transportation funds for rural schools and support for career and technology education programs. Each school district is guaranteed to receive at least a 3 percent increase in funding.
In order to provide greater accountability for schools and students, end-of-course exams will replace the current Texas Assessment of Knowledge and Skills (TAKS) exam. The House bill also provides state funding for all graduating students to take either the SAT or ACT college preparatory exam.
The issue will now move to the Senate, where the framework of their proposal has been laid out, but no formal action taken. The plans of both chambers appear to be in line with many of the broad goals and objectives of Texas Farm Bureau policy. Perhaps most important, both chambers have indicated a commitment to reducing the property tax burden.
Texas Farm Bureau staff will continue to monitor these issues as the Senate crafts its plan, and then as the two chambers attempt to work out any differences in conference committee.
