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Home | Tag Archives: texas tax reform

Tag Archives: texas tax reform

Texas’ legislative leaders say they have a deal on school finance and property tax reform

Texas’ top three political leaders declared Thursday that the Legislature had reached agreements on its top three 2019 priorities: A two-year state budget, a comprehensive reform of school finance and legislation designed to slow the growth of rising property taxes.

Republican Gov. Greg Abbott broke the news on the lawn of the Governor’s Mansion in Austin, just a few days before the Legislature is scheduled to gavel out. Both chambers will need to sign off on the three negotiated bills — House Bill 1, the proposed budget; Senate Bill 2, the property tax bill; and House Bill 3, the school finance bill — before the regular session ends Monday. Language for the compromised legislation, much of which was worked behind the scenes between lawmakers from the two chambers, had not yet been made public as of Thursday afternoon.

“We would not be here today, making the announcement we are about to make, without the tireless efforts of the members of the Texas House and Senate,” said Abbott, flanked by Republican Lt. Gov. Dan Patrick, House Speaker Dennis Bonnen, R-Angleton, and other House and Senate members who played key roles in negotiating the three pieces of legislation. Almost five months beforehand, as state lawmakers began tackling the issues before them, Abbott, Patrick and Bonnen had pledged from that same spot in front of the Governor’s Mansion to work together and deliver on meaningful school finance and property tax reform.

“Frankly, we’re more together than we’ve ever been,” Bonnen said. “The people of Texas are those who win.”

Thursday’s presser maintained the “kumbaya” theme that the three leaders have worked hard to set this session as the Legislature tackled reforms on some of the state’s most complicated and thorny policy issues. And, though the conference was light on policy specifics, Bonnen told reporters that the House would vote on the trio of updated legislation “as soon as it’s available.”

According to a flyer detailing some of the components of the compromise reached Wednesday night, the school finance bill will include funding for full-day pre-K and an increase in the base funding per student, which hasn’t changed in four years. It also pumps in $5.5 billion to lower school district taxes up to 13 cents per $100 valuation on average by 2021 — though leaders dodged questions Thursday on exactly how and where the extra money would come from.

The compromise bill, Bonnen said, would reduce recapture payments that wealthier districts pay to shore up poorer districts by $3.6 billion, about 47%. But he also said the state could not afford to completely eliminate recapture, also known as “Robin Hood,” because it would cost too much to completely reimburse school districts from state coffers alone.

The bill will include funding for districts that want to create a merit pay program, giving more to their higher-rated teachers. Though the House decided to nix this from its initial version of the bill, the Senate put it back in and apparently won the fight to keep it in.

Teachers associations and unions argued a merit pay program would open the door to school districts using the state standardized test to decide which teachers receive bonuses. The bill does not require districts to use that standardized test.

It also would include additional funding for “dynamic teacher compensation” tied to the base funding per student. But it was unclear exactly how much school districts could expect for these raises or how they would be required to allocate them for teachers, librarians, counselors, nurses and other school employees.

Bonnen, asked by a reporter after his remarks about how the two chambers had handled differences on the teacher pay issue, said he was going to “shut it all down right now” before diving into a football reference.

“We won the Super Bowl today,” he said, “and we’re not going to talk about whether the quarterback or the running back had more success in our win.”

Authors: CASSANDRA POLLOCK AND ALIYYA SWABY – The Texas Tribune

The 86th Legislature runs from Jan. 8 to May 27. From the state budget to health care to education policy — and the politics behind it all — we focus on what Texans need to know about the biennial legislative session.

MORE IN THIS SERIES 

In the Texas House, property tax legislation is being handled with a different speed — and tone

City mayors extended an olive branch. Witnesses spoke uninterrupted. A House Democrat said he appreciated the “frame and tone” set by a GOP chair.

When the Legislature’s priority property tax reform bill was rolled out by a House committee Wednesday, it was met with a tenor and pace that differed markedly from the more contentious proceedings in the Senate.

Absent the quick tempo and heated exchanges that marked the upper chamber’s committee hearings on the legislation, a panel of state representatives deliberated its bill for nearly 12 hours, taking expert and public comments without proposing amendments. The proceedings were the latest sign of the lower chamber’s approach to the priority property tax package — which the chair of the tax-writing Ways and Means Committee said they would “fully understand before we get into the debate and discussion.”

That, he said, “is how we have discussions in the Texas House.”

During the Senate committee’s proceedings, public testimony was largely limited to two minutes — a strategy designed to allow everyone who wished to testify the opportunity to do so, according to the office of state Sen. Paul Bettencourt, R-Houston, chair of the committee.

As the Ways and Means Committee meeting wore on Wednesday, some witnesses complained that homeowners hadn’t been called until well into the evening and that many had departed before their turn came.

But the thorough approach was set early in the day by Rep. Dustin Burrows, R-Lubbock, the committee chair who began proceedings on the reform bill by saying he hoped the 11-member panel would hear comments and “talk about ideas that can make the bill better in either direction.”

After, “the committee can collaborate and can work and try to come up with a bill that is right,” he said. “[We’re] not just trying to get something across the finish line as quick as we can.”

The Senate tax committee passed its version of the property tax reform bill, with amendments, earlier this month. It has not yet been debated by the full upper chamber. As drafted, both versions of the legislation would require that cities, counties and special taxing districts receive voter approval before increasing property tax revenues 2.5 percent more than the previous year. Revenue from new developments would not count toward the 2.5 percent threshold.

Burrows seemed open to other rates Wednesday, but he explained why he filed the bill at 2.5 percent. An election trigger could be tied to a price or wage index — or based on “simple math,” Burrows said.

“If property taxes continue to go up year after year at 8 percent, they will double in nine years,” he said. “At 4 percent, it takes now 17 years to double, and 35 years to quadruple. And at 2.5 percent, it takes 28 years for somebody’s property taxes to double, and 56 years for them to quadruple.”

Currently, voters can petition to have an election if revenue growth surpasses 8 percent, a figure supporters of the legislation say was set during a period of high inflation in the 1980s.

The reforms are a big-ticket item for state leaders. Though they are unlikely to reduce individual tax bills — a concern for residents who say their incomes have not kept pace with rising property values — they could tamp down the rate of a jurisdiction’s property tax revenue growth.

The legislation also proposes a battery of modifications to how properties are appraised, with an aim of making the process more transparent and less subjective.

Still, as Burrows noted Wednesday, the 2.5 percent election trigger has “captured most of the headlines,” and several witnesses were asked Wednesday to help identify a more palatable number.

“Do you think 8 percent is where it ought to be, or do you think it should be lower?” Burrows asked Amarillo Mayor Ginger Nelson.

“I think we’re engaging in that conversation with you guys,” she responded, listing a number of factors she thought should be taken into account.

Two dozen big-city mayors proposed using a formula to tailor the trigger to each jurisdiction, in a letter to the committee chair dated Feb. 26. Six mayors testified on behalf of the group, stressing they were remarking “on” the bill — a neutral position — not against it.

Bettencourt noted a new attitude coming from mayors Thursday.

“The Mayors came in with solutions this time because they just said NO last time,” he said. “That’s progress.”

Despite the generally placid tone Wednesday, the hearing exposed some of the party-line fissures that have animated the property tax reform effort so far. Mayors were questioned by GOP lawmakers about why having an election trigger would force them to cut their budgets. Municipal leaders said population growth and unfunded mandates were tying their hands. And many homeowners, who supported a trigger at 2.5 percent, spoke of their difficulty paying rising tax bills on top of other expenses.

Near 11 p.m., the Speaker of the House, Dennis Bonnen, R-Angleton, walked through the hearing room to greet lawmakers and watch the proceedings.

In 2017, property tax proposals left the House and Senate at an impasse during both the regular and special sessions. The lower chamber proposed that an election be triggered at 6 percent revenue growth, while the upper chamber pushed for 4 percent.

In a move Bettencourt has jokingly called a “compromise,” Gov. Greg Abbott pitched a 2.5 percent rate in advance of the 2019 session. A poll from Quinnipiac University, released this week, found voters largely supported the idea of requiring local governments to get voter approval before “increasing property taxes” more than 2.5 percent.

Still, lawmakers’ public support for the 2.5 percent threshold has appeared to wane. Republicans have cast the figure as a starting point. Prominent Democrats on the committee — state Reps. Trey Martinez Fischer, D-San Antonio, and Rep. Eddie Rodriguez, D-Austin — have said the figure is a non-starter.

“For the number now to shift downward by a point and a half to 2.5,” Martinez Fischer said, “my natural reaction and response to that is, ‘Well, my 6 becomes 7.5.’”

And a major component of the reform package has yet to be unveiled. The bulk of property taxes statewide are levied by school districts, with state dollars flowing in after local revenue has been accounted for. The property tax reform proposal has inserted placeholder language for schools, as lawmakers’ wait on sprawling public education bills to be filed.

Martinez Fischer, who sits on the Ways and Means Committee, said of the lower chamber’s approach: “we don’t care about getting it done first; we care about getting it done right.”

“Everybody seems to want to live this policy through the lens of 2017,” he said. “I take the mayors at their word that they’re going to work hard, they’re going to come up with a collective solution. I take the chairman at his word that he wants our input and is hoping to make this bill better.”

Author: SHANNON NAJMABADI – The Texas Tribune

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