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Education Officials Worry About Impact of Property Tax Reform

Whatever education legislation emerges, supporters say it's critical for the state to rein in skyrocketing property tax increases.EXPAND
Whatever education legislation emerges, supporters say it's critical for the state to rein in skyrocketing property tax increases.
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This week, the Texas House of Representatives is expected to take up its version of a plan to slow the growth of property tax rates statewide.

School officials worry that, depending on what version of that plan makes its way to Gov. Greg Abbott's desk, it could mean a major financial hit for districts, putting many of their programs in jeopardy.

"This could cost us millions of dollars," Dallas ISD Superintendent Michael Hinojosa says.

Under current law, taxing entities like cities, counties and school districts may increase their property tax revenue by up to 8% over the previous year before voters may petition for a ballot proposal rolling back the increase. Legislative leaders and Abbott have argued that 8% threshold is too high and have made a priority of overhauling the state's property tax laws during the current legislative session.

Last week, the Senate passed a reworked version of the property tax reform bill by an 18-12 vote, with Sen. Eddie Lucio, a Brownsville Democrat, voting present. Under the new version of the bill, cities, counties and other taxing entities would have to seek voter approval before raising 3.5% more in property tax revenue than the previous year. In its previous form, the bill placed that threshold at 2.5%. The new version keeps the original 2.5% threshold for school districts.

The House bill contains a few key differences from the Senate version, including exempting community colleges, emergency service districts and hospital districts from the cap. If the House approves its version of the bill this week, the two sides will likely need to work out the differences in conference committee before sending the final version of the bill to Abbott.

Whatever version emerges, supporters say it's critical that the state rein in out-of-control property tax increases. In a statement issued after last week's Senate vote, Abbott lauded the bill's passage, saying the Senate "took action to deliver on the promise of reining in skyrocketing property taxes."

Hinojosa, the Dallas superintendent, says he understands that many people think property tax rates are too high and climbing too fast, but he worries about the impact the change would have on his district. For the last few weeks, Hinojosa has been spending much of his time in Austin, talking to lawmakers about how a 2.5% cap would affect Dallas ISD and other districts statewide.

Among other programs, the cut could jeopardize the district's proposed middle school initiative, Hinojosa says. Hinojosa proposed the initiative to Dallas ISD trustees in March. Through a combination of teaching partnerships, professional development and training, district officials hope to improve the quality of instruction and student engagement at 24 middle schools in the district.

District officials have said the program is important because middle school is a time in students' lives when many begin to disengage from school. If the district can keep those students on track, they're more likely to graduate. If not, they become more likely to drop out before finishing high school. But as important as that program would be, it would also cost money — something that would be harder to raise with the 2.5% cap in place, Hinojosa says.

If the cap eventually becomes law, it will make it much more difficult for the district to move forward with that initiative, Hinojosa says. But until the House passes its version of the plan and the two houses negotiate a deal in conference committee, it's difficult even to know what the district should prepare for, he says.

"We are in a constant state of flux," he says.

John Robertson, chief financial officer for the Dallas County Community College District, says the district would also take a substantial hit if the final version of the property tax plan includes a tax cap on community colleges.

If a 3.5% cap had been in place the last two years, it would have cut the community college's budget by about $10 million, he says. If the cap is enacted this year, it could mean cuts to campus police and public safety, IT infrastructure and the college district's Navigators program, which helps connect students with services like tutoring, counseling, affordable housing and child care.

Ultimately, Robertson says, such a cap could threaten students' access to early college high schools, including Pathways in Technology schools and career and technical programs. That could put the state in danger of missing the goals laid out in the 60x30TX plan, an initiative that established an objective that 60 percent of Texans age 25-34 will hold either a college degree or professional certification by 2030.

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