Posted on 05/12/2005 6:52:30 AM PDT by Cat loving Texan
Senate approves school finance bills Effect would be real on Texans
By Jason Embry AMERICAN-STATESMAN STAFF Thursday, May 12, 2005
The Senate approved a pair of school finance bills Wednesday, boosting the prospects of a final House-Senate agreement on the issue before the May 30 end of this year's legislative session.
The plans could affect Texans in a variety ways: everything from the start of school being pushed past Labor Day and sales taxes on clothes being scrapped for one weekend before Christmas, to higher consumption taxes replacing some property taxes.
"I've been optimistic since Day One, and I'm even more optimistic," said Lt. Gov. David Dewhurst, who presides over the Senate. "If we don't reach an agreement on school finance, it won't be because of the hard work and the willingness to sit down and engage in good-faith negotiations on the part of the Senate."
After a lengthy debate that began Tuesday, senators approved their version of House Bill 3, which raises consumption and business taxes to pay for a cut in school property taxes, early Wednesday.
About 21 hours later, they overwhelmingly approved House Bill 2, the companion bill that would increase education spending by about $2.8 billion over two years, raise teacher salaries and require schools to start the academic year after Labor Day.
Senators removed a major barrier between themselves and House members Tuesday, when they voted to keep school property taxes in the hands of local school boards instead of creating a state property tax. But other sticking points remained, including differences between the House and Senate plans over tax rates, teacher pay and school funding formulas.
The Legislature is under court order to craft a new system of paying for public schools, but negotiators will have to move quickly to grind out a final bill that both chambers can pass within the next 18 days.
The Senate version of House Bill 2 would cut the maximum property tax rate for school maintenance and operations from $1.50 per $100 of assessed property value to $1.15 this fall and $1.10 in fall 2006.
The real tax rate for many Texans, though, could end up slightly higher, since school districts often set a tax rate that exceeds the maximum levy for operations so they can pay off debt. The tax rate in the Austin school district, for example, is $1.62, or 12 cents higher than the cap on maintenance and operations.
Education groups across the state aggressively fought the school-reform bill that the House passed in March.
Those groups turned down the volume on their opposition as senators worked on their version of the legislation, but many of them remained lukewarm as debate on the Senate plan kicked off this week. At least one group cited analyses showing that the tax swap would actually result in higher taxes for all but the wealthiest Texans.
"It's scary to think of what lawmakers will come up with in the next couple of weeks, because every indication is that they're content to continue on their quest to raise taxes for the majority of us without providing adequate funding for public education," said John Cole of the Texas Federation of Teachers.
Clayton Downing of the Texas School Coalition, a group of property-wealthy school districts that send money to poorer districts, said he was "ecstatic" that the Senate removed the state property tax from its proposal. But he had not seen how much money the bill would give each of the districts he represents and was not ready to endorse the plan.
A state judge declared the school finance system unconstitutional last year, saying schools cannot raise the money they need and that districts have little choice but to set the maximum property tax rate, essentially making it an illegal statewide tax. That decision is under review by the Texas Supreme Court.
The Senate plan would retain the so-called Robin Hood system, which requires districts with high property values per student to share local tax money with districts that have lower property values. The number of school districts that have to share revenue, however, would fall from about 135 to 102.
The Senate plan would provide every teacher a $1,000 raise this fall and another $1,500 raise in late 2006. It also would restore a $1,000 stipend for teachers to pay for health insurance.
The bill would give incentive pay to teachers at low-performing schools that show marked improvement, as well as stipends for teachers who work in subjects or geographical areas where certified teachers are hard to find.
Senators also changed the bill Wednesday to require schools to start the academic year after Labor Day, a provision included in the House plan.
During the tax debate, senators voted to exempt state sales taxes on clothes and shoes bought during the first weekend of December, similar to the sales-tax holiday that Texans now enjoy before school starts. That holiday was not part of the bill passed by the House.
Senators also scrapped their plans for a reworked franchise tax for all businesses in favor of a plan that allows companies to choose the lower of two taxes, as long as they generate more money than a minimum tax of 0.25 percent of gross receipts.
The first option for businesses is to pay 2.5 percent of net taxable income plus their payrolls. They could deduct from the tax base either half of their payrolls or $30,000 per employee. They also could deduct the cost of some health benefits. The second option requires companies to pay a 1.75 percent payroll tax, capped at $1,500 per employee.
Will Newton of the National Federation of Independent Business, a small-business group, criticized the Senate plan for taxing at least part of a company's payroll.
"This is bad," he said. "A business could be on the precipice of bankruptcy, and you still owe based on employees."
The tax plan, House Bill 3, passed with a 21-10 vote. Sen. Gonzalo Barrientos, D-Austin, voted against it. GOP Sens. Steve Ogden of Bryan, Troy Fraser of Horseshoe Bay and Jeff Wentworth of San Antonio voted for it.
Barrientos was one of four senators, all Democrats, who voted against House Bill 2.
Take it from someone in a state where the state government promised to take over 2/3rds of the school funding in exchange for "property tax relief" - those property taxes will continue to go up after a 1-year dip, and school spending will increase even faster as the school boards tell the sheeple that it's "somebody else's money" that they're spending.
Why?
I believe you, but what interests me is how the renewed property taxes were eased into place. How they were justified . . .
Robin Hood lives on. Disgusting.
This is the only way the weasels in Austin could do an end run around the requirement for a state constitutional amendment to implement a state income tax.
The Senate version of House Bill 2 would cut the maximum property tax rate for school maintenance and operations from $1.50 per $100 of assessed property value to $1.15 this fall and $1.10 in fall 2006.
As I said yesterday, with the maximum valuation increase still set at 10% per year it will take them less than 4 years to have my property tax bill back to where it is now. My rate may be fall from $1.50 to $1.10 per $100 but my valuation will go up 40%.
I am all for pushing back the start date. When I was younger we did not start until Labor Day or after. My kids are starting August 11th this summer after getting out May 25th. Every year they add another day or two. They have also shortened Christmas Break by a few days.
Now, many districts are intentionally ignoring routine maintenance so that they could claim that as a reason to bust the spending caps. The dirty little secret is that while any reason can be given in a referrendum, the school district is often not legally bound to spend that additional money on that reason.
You may want to keep an eye on this.
Yep, been on it for a while. Call both house and senate as this started and as of 02:00 this morning they still had not posted how who voted.
Going to look again now.
Like CK, I've been watching this too. They have to do something different since they outlawed "robin hood". This might be a step in the right direction IF I didn't already know that once a tax in there it NEVER goes away.
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