Rep. Phil King and Sen. Craig Estes have 26 days before the Texas Legislature is scheduled to meet and decide the school finance issue once and for all.
The April 17 special session, the fourth called by Gov. Rick Perry to address school finance issues, comes in response to last year’s Supreme Court ruling that relying on property taxes for the majority of Texas’ $33 billion school system is unconstitutional.
The court ruled the current system constitutes a statewide property tax, which violates the state constitution.
Following the 30-day special session, the court set a June 1 deadline for lawmakers to have a new school finance system ready.
District 61 Representative Phil King, who serves Parker and Wise counties, is scheduled to meet with Gov. Perry and former state comptroller John Sharp Wednesday to discuss the special session.
King has plans for Texas’ budget surplus, estimated between $4-6 billion.
“We’re waiting for the comptroller to certify the amount of surplus funds,” King said. “But I would like to apply the surplus to buying down property taxes and to a teacher pay raise.”
In part, King’s plan relies on the budget surplus, produced during recent boom years of the state economy, to cover both the Supreme Court’s mandate to overhaul the tax system and to provide more funding for state educators.
He estimates $1 billion from the surplus would represent about a 10 cent decrease to the state’s current property tax rate — $1.50 per $100 assessed value. Because approximately 70 percent of Parker County residents’ property tax goes to schools, King explained that a $4 billion dollar buy down would result in a 40 to 50 percent tax reduction for Parker County tax payers.
Specifically, King said school districts also need funding to recruit teachers according to a district’s specific needs.
“There’s been a lot of discussion about giving teachers a flat pay raise, what I would prefer to do is take upward of a couple billion of that money and apply it to teacher compensation,” King said. “Because we’re having so much difficulty attracting and retaining math and science teachers for example, we need to get some additional funding to the schools so that they can use it to target compensation in particular specialties. So that they have the freedom to go out and recruit or retain. And each district is different. We need to give some of that as an across the board pay raise, but we also need to give schools the additional compensation so that they can go out and target those specific teaching positions that in their district either they cant recruit or cant retain.”
In addition to funding to help school districts secure sought after teachers, King also favors a substantial across the board hike in teacher salaries.
He said it would take a little under $1 billion to give a $3,000 across the board pay raise to all teachers in the state.
Specific ideas to reform the finance system were submitted by the 181-member legislature during three previous attempts to reach a solution.
Sharp was appointed by Perry to head up the commission, which is expected to release its findings at the end of March.
District 30 Sen. Craig Estes, who represents more than 16 counties in North Texas, including Parker, was unavailable to comment on the school finance issue. His spokesman Lewis Simmons imparted Estes’ views.
Simmons said Estes met with Perry and Sharp recently.
“[Estes] has been firm all along that reforming the franchise tax should be one of the priorities,” Simmons said. “There are members of the House that have been very vocal about advocating the use of the budget surplus. Senator Estes questions the wisdom of using the entire surplus on a recurring expense. Does it make sense to use the surplus we have in our hands right now to solve a funding issue that is going to be here tomorrow?”
Simmons referred to dramatically increasing Medicaid costs, which he said could easily gobble up $4 billion, and said Democrats have put their foot down on an increase in sales tax.
“Some sort of reform to the franchise tax has got to be a priority,” Simmons said.
But King warned against a business tax that could affect economic growth in the state, which helped produce the current surplus.
“I want us to take a good look at the Sharp Commission’s tax proposal that tries to take property tax over the long term out of the school finance equation and replace it with some kind of flat spread out tax,” King said. “I’m very cautious about that because its trying to create a new business tax and the Texas economy is doing so good. We’re outdoing just about every body else in the country and I don’t want us to mess that up. That’s where we get our jobs and our economic development. I’ve got an open mind, but I’m very cautious about redoing the tax code.”
Perry agrees with King.
In a Tuesday speech, Perry told the Texas Association of Manufacturing that the upcoming special session of the legislature is an opportunity to give Texans a significant property tax cut that stands the test of time and to make lasting improvements to the state’s tax structure so that it is more modern, broader and fairer.
“If Texas is to continue to be a national leader in job creation, any new tax system we adopt must reward jobs and investments, not penalize them,” Perry said. “And just as importantly, our tax structure needs to treat businesses in different industries with an even hand.”
In echoing King’s sentiments, the governor said the economic growth the state has experienced in recent years occurred because Texas has created an environment that welcomes job creation and rewards entrepreneurship like no other state.
“My philosophy is simple: You can’t tax, spend, regulate and litigate your way to prosperity,” Perry said.
Previous special sessions in which the school finance quandary was discussed were much broader and included debate on reform issues such as changes to school board elections and school year start dates.
“We’re hoping [Perry] will be very narrow in terms of his proclamation so the legislature can fix its attention on the deadline,” Simmons said.
“Those are issues that could be addressed separately from the funding issue,” Simmons said. “When you add those issues, you decrease the probability that the funding issue would be resolved.”
A March 17 press release from the Governor’s office stated, “The governor will issue a proclamation outlining the specific issues for the session at a later date.”
The Associated Press reported if the June 1 deadline isn’t met, the courts will prevent the state from sending money to its 1,037 public school systems until a new finance plan is devised.
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