In the final days of the 86th Legislature, the big issues of the session — property tax reform and school finance — have taken significant shape, and Texas’ top elected officials announced that they had finally crossed the finish line.
The “Big Three” held a press conference at the Governor’s mansion this afternoon ahead of the final push to get their biggest legislative priority to Governor Abbott’s desk for signature.
Lt. Governor Dan Patrick said of the effort, “We have had the Super Bowl of legislative sessions in the history of this state, and I think in the history of this country.”
The Senate led on property taxes out of the gate. SB 2 by Sen. Paul Bettencourt (R-Houston) set a cap on year-to-year increases in property taxes at 2.5 percent. If taxing entities raised it more than that, an election would be triggered so that voters can have a say in the process. But this was changed slightly to 3.5 percent for all cities and counties during the debate and amending process in the Senate. School districts, however, remain at 2.5 percent before triggering a ratifying election.
As announced at the presser, 2.5 percent and 3.5 percent are the finalized caps on property tax increases. “That’s a dramatic cut in future tax increases,” Patrick told media gathered at the Governor’s mansion.
The bill passed through the Senate nearly on party lines — Sen. Kel Seliger (R-Amarillo) was the lone Republican voting against the bill — 18-12, on April 15. It then moved to the House Ways & Means Committee.
Committee chair, Rep. Dustin Burrows (R-Lubbock), brought forward the committee substitute for SB 2. It passed the House on May 1 by a vote of 109-36 — with roughly a third of House Democrats breaking ranks in support.
Also part of the unveiling was a comprehensive school finance reform plan which includes $4,000 in total income plus bonuses on average for Texas teachers and other staff.
“We are here to deliver on our promise,” said Speaker Bonnen, touting “$4.5 billion will be going into the classroom of Texas children.” Bonnen also announced that the state will fund pre-kindergarten schooling, something he said, “will change their lives and make Texas even better.”
Bonnen also said that student “equity” was a big aspect of the legislative talks. Similarly, they announced a 47 percent cut to the “Robin Hood” program (also known as recapture) — which as Governor Abbott said, “robs one district to pay another.”
Although every detail of the plan still remains unclear as the legislative text is still being finalized, the legislators and Governor were confident that they “finally fixed school finance in Texas.”
Bonnen added, “The three leaders of Texas, your State Senate, and State House are committed to solving the biggest problems facing the State of Texas.”
During floor debate on property taxes, Burrows emphasized repeatedly that, “The bill does not cut property taxes.” “It was never intended to cut property taxes,” he continued. Burrows then stressed that a cut to property taxes must address the mechanism by which they are raised and collected — through the school education code.
Where the compromise falls on the current differences between the two body’s plans will be released in the coming days — such as the “de minimis” rate which permits taxing units below a certain threshold to raise taxes more, in some cases exponentially so, than the cap without triggering an election.
Other differences in the property tax plans include a homestead exemption protection for local governments, which is in the House’s version. Meanwhile, the Senate instead opted for an indigent defense provision which allows costs incurred by that to be factored into the revenue calculation.
The Texan spoke to Rep. Jeff Leach (R-Plano) after the presser. Leach echoed the sentiments of the “Big Three” saying, “Several billion of this plan is going to address and provide property tax relief and Robin Hood.”
Leach added, “It’s a good, common sense, conservative education school finance reform. And I think the people, students, and educators of Texas will benefit greatly from it.”
When asked how the legislators approached buying-down the property tax rate gap that the once proposed sales tax was supposed to fix, Leach said, “There are a handful of bills which will be rolled out in the coming days that each has funding mechanisms with existing revenue which will be dedicated to this.”
About future plans to actually cut property taxes, Leach stated, “Going into the interim, we’ve got to have discussions about reducing property taxes or even getting away from property taxes altogether. Those discussions must be had over the course of 18 months.”
Texas legislators are happy with the compromise, and especially so since it likely means there will not be any special session. Governor Abbott concluded by saying, “Future generations of children in Texas will be better off because of the education reforms passed this session. The tax burden on Texas property owners will be less because of what we accomplished this session.”
The rest of the plan will be unveiled in the coming days.
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Brad Johnson is an Ohio native who graduated from the University of Cincinnati in 2017. He is an avid sports fan who most enjoys watching his favorite teams continue their title drought throughout his cognizant lifetime. In his free time, you may find Brad quoting Monty Python productions and trying to calculate the airspeed velocity of an unladen swallow.