AUSTIN, TX – Last Wednesday, the Texas House Ways and Means Committee conducted a hearing on House Bill 285, Rep. Andrew Murr’s newly filed legislation that would fully end the “Robin Hood” school finance system and cut the average homeowner’s property tax bill by almost half. Governor Abbott and Lieutenant Governor Patrick have both called for property tax relief during the current special session of the legislature. Rep. Murr said he believes the key to relief lies in a complete overhaul of the school finance system.
“Texas has the sixth highest property tax burden in the nation,” Rep. Murr said at the August 2nd committee hearing. “The constituents I represent want relief, but without reforming the way in which we fund public education, any relief is just going to be a band aide. This is a hefty, weighty issue that can get very complicated, but I think we owe it to our constituents to have the discussion.”
If passed, House Bill 285 would eliminate the portion of a property owner’s tax bill dedicated to the maintenance and operation (M&O) of school districts and replace it with an increase in the state sales tax from 6.25% to 12%. On average across the state, M&O school taxes account for roughly 43% of an owner’s property taxes (varying depending on locality). It is also the part of our property taxes that are subject to recapture, otherwise known as “Robin Hood.”
Dr. Crystal Dockery, the Superintendent of Hunt ISD, traveled to Austin to testify about the legislation. She said recapture is a real problem for her district in Kerr County.
“Hunt ISD is a property wealthy school,” said Dr. Dockery. “We take in around $4 million. When I started in 2011, about 38% of the money that I was budgeting was for recapture. This past year, I got to budget 49%. For this next year, it’s going to be about 53% of my budget. Part of my problem is that I have to go to the Hunt Store…and I sit down with a lot of people who have worked very hard for their money, who are paying quite a bit of money in property taxes, who do not understand why I keep saying that we don’t have any money. I appreciate him (Murr) listening to my emails, my letters and my texts, and trying to start some conversations on fixing it.”
Raul Chavarria, the Superintendent of the Crockett County Consolidated Common School District, also made the trip to Austin to speak in support of the bill. He said that Crockett County schools and taxpayers are suffering under the burden of the recapture system.
“We are sending 52% of our M&O budget back to the state,” Chavarria said. “We’ve already cut 15% across the board…but we are still close to a million dollars short meeting the demands of our district. For a district of our size, a million dollars is crucial. It could kill us. Those aren’t scare tactics. Those are just the facts. I totally agree with ending recapture. When we send 50% of our money out and don’t get any in return, then there’s something wrong with the system.”
In addition to Dockery and Chavarria, several prominent conservatives either registered in support of Rep. Murr’s specific legislation or testified more broadly in support of the concept. Dr. Vance Ginn, an economist for fiscal policy with the conservative Texas Public Policy Foundation said the ultimate policy goal of the legislature should be to eliminate the property tax by increasing and expanding the sales tax.
Ginn said, “By doing this tax swap there would be more economic growth, about $63 billion more in personal income, 337,000 new jobs that would be created…You have to think about the dynamic effects of going to a more efficient and more effective sales tax instead of the property tax. It also tends to be more conservative…”
State Republican Executive Committeeman Terry Holcomb also spoke on the need to more evenly distribute the burden of financing public education.
Holcomb said, “Part of the problem with the system we have today is that we have far too many exemptions and the load is continuing to be put on fewer and fewer people…”
The Ways and Means Committee left House Bill 285 pending when it adjourned on Wednesday afternoon.
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