Lawmakers to cut school taxes
State Republican lawmakers put $17.6 billion in the new state budget to cut property taxes, which are the sixth-highest in the nation, according to the Tax Foundation. However, they could not agree on how to distribute those cuts before the regular session expired on May 29. Gov. Greg Abbott called a special session to get the two chambers to agree. The House plan included a lower, or “compressed” school tax rate. The plan would cut the rates that homeowners pay for school districts’ maintenance and operations budgets but would replace that money from the state’s coffers.
Olney Independent School District Trustee Kyle Hinson said he has not had a chance to analyze the proposal’s effect on Olney schools. “It’s allin the details,” he said. “I haven’t read it yet.”
But OISD Superintendent Dr. Greg Roach opposed the idea, saying that lawmakers should examine the way taxes are calculated rather than cutting schools’ budgets.
“Tax compression is all a shell game. Nobody is really saving a lot in taxes because of the massive increase in property values. It’s kind of hard to figure what’s really going on,” Dr. Roach said.
An analysis by the Texas Tribune showed that the owner of a $340,000 home – the average price of a Texas home last year – would save about $486, or $41 per month under the House plan owing to the lower school tax rate.
A Senate plan which would increase the homestead exemption in addition to cutting school taxes would save that same homeowner about $925 per year or $77 per month.
Gov. Abbott limited the agenda for the first special session to reduce property taxes “solely by reducing the school district maximum compressed tax rate in order to provide lasting property-tax relief.”
“We must cut property taxes,” Gov. Abbott said in the statement. “During the regular session, we added $17.6 billion to cut property taxes. However, the legislature could not agree on how to allocate funds to accomplish this goal. Texans want and need a path towards eliminating property taxes. The best way to do that is to direct property tax reduction dollars to cut school property tax rates.”
But that special session ended less than 24 hours later after the Senate added its homestead exemption to the bill, bumping the exemption from $40,000 to $100,000. The House rejected the measure as outside the Governor’s mandate for the session, and adjourned immediately rather than consider the homestead exemption proposal.
Gov. Abbott is expected to call several special sessions this summer and fall to deal with a number of issues upon which lawmakers failed to agree during the regular session.