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Press Release

    Dueling school finance plans in Texas -- which should prevail?

    05/11/2003

    CSE’s message to the Texas Senators: Not Now!

    Two School Funding Plans in Texas:

    Two plans to address the school finance are at battle in the Legislature. Voters need to know how each would impact them. Here is an overview of the plans:

    The state Senate and House of Representatives addressed finance of public education which offer contrasting approaches. The Senate version rewrites the state's tax system by lowering property taxes but raising sales taxes and taxing services which have not previously been taxed. The House plan offers some relief while buying some time.

    The Senate Plan:

    • Raises the state sales tax from 6.25 percent to 7.25 percent. (Amarillo's local add-on tax is 2 percent.)

    • Extends, for the first time in Texas, the sales tax to services, except for medical and dental.

    • Replaces districts' maximum maintenance-and-operation tax, $1.50 per every $100 of taxable value, with a statewide property tax, 75 cents per $100 value.

    • The tax goes to a Texas Education Fund, which gives equity to school districts by allotting money to them on a per capita basis.

    • Districts can seek voter approval for as much as an additional 10-cent enrichment tax, implemented incrementally over time.

    • Increases the motor vehicle sales tax from 6.25 percent to 8.75 percent.

    The House Plan:

    • Suspends Robin Hood law for two years, providing relief to many districts.

    • Redistributes in that biennium $1.2 billion to school districts from the state general fund.

    • Calls a special legislative session to consider a new education finance system.

    Which plan should prevail? CSE is concerned that the Senate plan will have far-reaching impact on Texas taxpayers, jobs and the economy. Some Senators remarked that they were pressured to support the plan before they had read it!

    Any dramatic tax policy change deserves input from taxpayers as well as time to study the impact on the state economy and various sectors of the workforce, and should not be rushed. We are recommending no tax bills this session. This session we need to balance the budget without raising taxes, and any tax bill provides opportunities to raise taxes.

    Let’s take the time necessary to bring taxpayers to the table. We need time and we want to taxpayers to know the benefits and the consequences of any tax change.

    CSE’s message to the Texas Senators: Not Now!