February 16, 2015
Last June, I started rolling out ideas to make life more affordable by reducing property taxes and improving the fairness of the appraisal system. Some stuck, some fell by the wayside and one — increasing the school homestead exemption — just got imitated by another senator who’s close to the lieutenant governor.
I always suspected that those controlling the Senate probably would want to take all the credit for any property tax reduction. I take satisfaction knowing that the centerpiece of their multi-billion dollar tax package is a progressive idea that will help folks who need it most. And, as I’ve always said, “Good ideas have a thousand mothers.”
So here’s another idea for reducing property taxes that’s ripe for the picking: Let’s renew the state’s promise to help school districts pay for their buildings.
Since the wallet is open…
As I’ve said several times, the state’s system for funding schools has failed to keep up withchanging times. We haven’t updated how we pay for transportation expenses since 1984 so the state’s share is about one-third of what it was 30 years ago. And the Cost of Education Index, which is supposed to account for regional cost differences, is stuck in 1991.
That’s ridiculous. But, wait, there’s more. It was the late ‘90s when the Legislature last tinkered with the programs that help school districts pay for the construction of new facilities. Fifteen years later, our schools are educating an additional 1.1 million kids and construction costs have increased.
State aid for facilities hasn’t kept pace — not even close. Local taxpayers are shouldering the cost. The state could help school districts cut their property tax rate by putting money into facility programs through what’s called the Existing Debt Allotment (EDA) or the Instructional Facilities Allotment (IFA).
I brought this idea up last week in the Senate Finance Committee. I suggested that, by helping the local districts with the debt at the same level we did in the late ‘90’s, we could get local property tax relief and maybe slow the tax creep that comes with rising valuations.
In response to my suggestion, another senator asked Lisa Dawn-Fisher, chief school finance officer at the Texas Education Agency, about it (Watch here. The good stuff starts around 1:28 into the hearing). Ms. Dawn-Fisher said, “It is definitely a tax relief program. The districts are required by law to reduce their (debt service) tax rates in recognition of the receipt of state aid.”
We have the opportunity to reduce property taxes for a lot of homeowners and businesses across the state — and help our school districts at the same time. Seems like a good way to use some of the money that the Senate has already set aside for property tax reduction.