Senate Budget Designed to Raise Property Taxes

Last week, the Senate passed its version of the budget.  It would cut about $1.8 billion in state funding for public education.  How can our state leaders afford the political blowback from cutting funds for our struggling schools?  They won’t have to!  In fact, total education spending will actually grow somewhat.  That’s almost entirely because school district property taxes are encouraged to increase enough to cover the state’s funding retreat and then some.

Why should Texas cities care about this slight of hand?  Because it’s part-and-parcel of the plan to replace state school funding with local property taxes and to try and blame cities for the whole shameful charade.   That’s where S.B. 2, the revenue cap bill, comes into play.  That bill cuts city and county property taxes only, and it does nothing to stop the growth of state/school property taxes outlined above.

Let’s look at the numbers.  The fiscal note on S.B. 2, the revenue cap, shows a two-year tax savings from city and county taxes of about $529 million dollars.  The Senate Budget bill, however, anticipates somewhere around a $5.7 billion increase in school taxes during a biennium.(1)   So to put that in perspective, the planned increase in local school property taxes under S.B. 1 is over ten times as large as the possible tax cuts under S.B. 2.   Taxes will go way up under the combination of the two bills, and the increase will be entirely due to state action.

So why bother with the minimal effect of trying to pass S.B. 2?  It’s a classic case of political diversion:  “well, yeah, what we’re doing here with school funding is pretty horrible…but, look over there at the big, bad cities!”  It would be funny if it weren’t so harmful to our state’s cities, taxpayers, and schoolchildren.

 

(1)   The biennial comparison is actually off by one year due to the effective date of S.B. 2, but the difference isn’t significant to the point of this article.

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