86th LegislatureIssuesState HouseSchool Finance Reform Passes Texas State House as Property Taxes Remain Dominant Issue

House Bill 3 puts school finance reform front and center in the 86th Legislature as property tax battle looms large.
April 3, 2019
Lawmakers passed House Bill 3 in overwhelming fashion yesterday as the legislature moves forward in their effort to adjust the way Texas school districts are funded. The lone dissenting vote came from Rep. Jonathan Stickland (R-Bedford). Right now, school districts are funded significantly by property taxes — of which Texas ranks third highest in the country. A 2018 poll found that 77 percent of Texans believe local government’s ability to raise their property taxes should be limited.

Proponents of the bill, such as Rep. Dan Huberty (R-Houston), the House Education Committee Chairman, suggested that this bill would provide the necessary fiscal oversight while also incentivizing a higher quality education for students, and allowing for the individual school districts to implement faculty raises as they see fit. The “efficiency audit” portion of the bill — which requires an audit for a school seeking a voter-approved tax levy — ensures that if schools want to raise taxes, “[they] should prove that you’ve been operating as efficiently as possible.”

Kara Belew, of the Texas Public Policy Foundation (TPPF), touted the efficiency audit, as well as each school district establishing student outcome goals that fit their needs, as quality reforms for Texas education. “Texas should invest in specific programs that are most likely to produce good student outcomes, rather than simply throwing money at the problem,” Belew stressed in an interview.

Preferring a bill that implements a $5,000 per teacher pay raise, the teachers’ unions have already mounted a formidable challenge to HB 3. The Texas State Teachers Association believes this bill would only raise the wages of those at the lower end of the pay scale and would do nothing for all other teachers. A spokesman for the TSTA, Clay Robison, said of his organization’s opposition to the bill, “We believe all employees need a pay raise and we’re going to continue to push for an across-the-board pay raise for teachers.”

As of last year, Texas sat at No. 28 nationally with an average salary of $52,575 for its teachers. This is not far below the national median which rests at $57,949. But according to the Texas Education Agency, per-pupil spending from 2007-2017 increased by almost $2,000.

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Following passage yesterday in the House, the Senate will take up the bill. A three-fifths vote in that body is required to move the legislation to the governor’s desk. In Governor Abbott’s State of the State address in early February, he commended the Dallas ISD for its merit-based teacher pay system. The Governor also emphasized his determination towards lessening the property tax burden on the state.

With an effective property tax rate of 2.18 percent, an owner of a $200,000 home would pay $4,360 a year. That’s the third highest property tax rate in the country. Since local communities implement their own property tax rate, a cap at the state level would not reduce that raw number for the average individual, but rather ensure that as a given property value rises, its tax rate would not rise above the set mark.

For students, the issue seems to be a harder fix. Half of Texas students are grade-level proficient in mathematics, and only 46 percent are grade-level proficient in reading. According to U.S. News, the State of Texas sits 37 out of 50 in overall quality of education in the United States. HB 3 proponents point to Dallas ISD’s 3.25 percent STAAR achievement increase from 2015-2018 under merit-based pay, relative to the state average of 1.75 percent increase in the same time frame, as a way forward for Texas students.

Governor Abbott applauded HB 3, saying “The Legislature is making changes that will have a lasting impact on our education system, and more importantly, our students.

However, with the House voting to approve an amendment on Wednesday that requires all school districts to implement a $1,850 raise for all teachers — significantly less than the $5,000 being debated in the Senate — the property tax debate could easily turn into a fight over teacher pay. Either way, the debate over school financing and property taxes is sure to take several more turns before the session ends.


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Brad Johnson

Brad Johnson is a senior reporter for The Texan and 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.