Action Update - Issue 66 :: February 27, 2006
No Rest for the Weary
Why a School Property Tax Buy-Down Is Only a First Step
By Byron Schlomach, Ph.D.
The Texas Supreme Court has ruled our school property tax system to be a constitutionally prohibited statewide property tax.
The reasoning is as follows: a tax is local only if the state does not so completely dictate expenditures and limit local tax rates that a local entity cannot determine its own priorities, thereby having essentially no discretion to finance projects and purposes beyond the state’s mandates.
Many districts are at or near the statutory maintenance and operations (M&O) rate cap, meaning they have no discretion to go beyond state mandates. That is the essential finding that caused the court to rule that we have a statewide property tax in the school M&O property tax, which is capped by the legislature at $1.50 per $100 property value.
It appears that until the legislature fulfills its responsibility to statutorily define what constitutes essential education, the court has determined to view all spending as essential, thus creating the current crisis.
The real issue becomes how near school districts are, on average, to the $1.50 cap. Currently, the weighted average rate is about $1.45.
So there is only a 5 cent gap between the average school M&O property tax rate and the $1.50 cap. Presumably, the state would no longer be in violation of the constitution’s prohibition against a statewide property tax, according to the court, if the “rate-cap gap” were to increase.
<continued>
Half-Million Texas Children Are Eligible
for School Choice
By Connie Sadowski - Austin CEO
In mid-December, the Texas Education Agency identified 821 campuses as academically unacceptable--twice as many as in 2004--making some 538,000 students eligible for transfer to a better-performing public school of their choice.
But if history is any indicator, very few will exercise this option to transfer in the next school year, said Allan Parker, founder of The Justice Foundation, a nonprofit, public-interest litigation firm based in San Antonio.
"The real problem here is the policy that schools continue to receive money every year, [regardless of] whether the school does a good job or a bad job of educating children," Parker said. "Parents realize that moving from one government-monopoly school to another government-monopoly school really does not motivate the public school to do a better job.
"The way to improve schools is to give parents real options by providing parents with full school choice by allowing parents to choose another public school or a private school," Parker said. "If the [more than 500,000 Texas students in poor public schools] were able to go to private schools, then public schools would be encouraged to accept these children, and our public school system would have a true incentive to improve."
Federal law requires school districts to provide transportation and to notify parents of their children's eligibility to transfer no later than the first day of school this coming fall semester. Nonetheless, transfer rates remain low, Parker said, partly because many schools are not notifying parents until two weeks before the transfer notification deadline.
<full article>
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