Chris Tackett of Fort Worth has posted a timely warning about Governor Greg Abbott’s bait and switch, which steals billions from public schools.
He writes:
$30 Billion over 10 years. Do I have your attention? Good, now keep reading.
Texas Governor Greg Abbott put forth a Property Tax Policy on January 16th, 2018, that will get a lot of attention in the new 86th Legislative session. You can read an article about it here, or you can read the full policy proposal here. The element I’m going to focus on is the cap on property tax revenue growth.
Abbott wants to limit the revenue that a city, county or school district can collect from property taxes to an increase of 2.5% year-over-year. This isn’t a cap on what you, the individual, might be assessed or have to pay (which is how Governor Abbott seems to be pitching things on Twitter)…
I’ll dive into the details if you want to keep reading, but here is key element. If the Governor’s 2.5% Tax Revenue cap was in place for the past 10 years, the additional dollars that the state would have had to make up, just to keep our school districts even (cities and counties would have their own costs not included here), would have been approximately $30 Billion. Yeah, that’s right. $30 Billion.
How did I come up with that really big number? You have to look year by year at every district, as the cap applies on a district by district basis. The Texas Education Agency (TEA) has data from the Texas Comptroller that details the property value assigned for school funding as well as the M&O rate (maintenance and operations, or what pays for the things inside the school, rather than the building itself)…
Texas on the whole is growing. This is generally a good thing, much better than the alternative that other states are facing. But when Texas grows, supply and demand says that property gets more expensive. This drives up valuations. Many people chose cities and districts based on the services available to themselves and their families, which creates more demand and again drives up valuations. Do we really want to jeopardize our schools and our communities by imposing a state level of control, which will impact the level of services that those who reside in these communities are asking for?
Many in the legislature and our governor talk about “local control”, but they seemingly don’t want to actually give communities and school districts the ability to set their own tax rates and create an environment for continued growth all across our state. This cap will potentially cripple our school districts, as well as our cities and counties. Why would we do that to ourselves?
Why would Governor Abbott and the Legislature want to steal money from the state’s children? That’s bad for them and bad for Texas?
Diane Ravitch's blog 
I hope Texans wake up. But based on my experience, the only thing the majority of them support when it comes to public schools is a keeping-up-with-the-Joneses boosterism to build $60 million-plus high school football stadiums.
Gee, I thought the GOP/libertarian mantra was limited government. Big Texas government is imposing a school gutting formula on local school districts.
and they are not only taking it, but cheering it on
Sen. Russell Long had quip that can be applied to and modified for all situations like this: “Don’t tax you, don’t tax me, tax the man behind the tree.”
There are two ways that can help provide a more equitable tax system. First, stop diverting so many tax dollars into privatized charter schools. It is too expensive to finance a parallel system that drains money from public schools most students attend. Second, Texas needs to create a more equitable way to provide property valuations. Currently, the sales price of a property does not have to be revealed to the state. I am sure this law was invented by owners of commercial properties. Commercial properties that can afford a cadre of lawyers to challenge taxes end up paying much less than residential owners that are less likely to understand the challenge process and cannot afford legal representation. Since commercial properties are more likely to be unique, there are no comparables for the purpose of determining valuation. This process works to the advantage of commercial properties. Each year in Houston and other big cities there is a three month long tax protest dance that occurs each spring. It is literally a swinging door of people in and out of the HCAD building there to challenge property valuations.
This proposal is an Abbot-Patrick invention designed to further undermine public schools.
Another problem with funding in Texas is the “recapture” law. This law takes from the “wealthy” and gives to the poor. With charter expansion in the mix, the formula declares cities like Austin, Houston and Dallas “wealthy” as the cost per student rises. These systems have already faced charter drain, and now Texas declares them “wealthy” and takes more money away from them.
What’s this? A politician who mentions public schools on national television?
“Sometimes we take for granted exactly how radical ideas like Social Security, the VA, and public schooling really are: that we will care for our elders, provide healthcare, and educate all children in America free of cost at the point of service.” — Alexandria Ocasio-Cortez
Pelosi and other Democratic party “leaders” should gracefully bow out and let the younger generation — the future of the Democratic party — in.
Should, but won’t.
They will fight it –and her (Ocasio-Cortez) — tooth and nail.
Ocasio-Cortez has more courage than the whole lot of Democratic “leaders” combined.
Three oddities (below) stick out to me in Mr Tackett’s analysis. Speaking w/zero expertise, just homeowner experience. Hopefully those who know more will correct me.
Do TX municipalities actually revalue properties annually ? Yes, I learned by googling. Good lord, what an expensive proposition! And doesn’t this make planning difficult for homeowners? Market values between one nbhd & another might experience annual fluctuations in reaction to newly-approved projects for example… OTOH, if nbhd-to-nbhd differential changes little/ at a slow pace, all this taxpayer-funded appraisal activity is being spent just to make sure Joe Blow pays $50 more than Joe Blue across town.
Here in NJ it’s done only when distribution of tax load gets really out of whack, acc to certain guidelines; the process has to be proposed/ approved. Clifton has recently been revalued for the first time in 30 yrs. Cherry Hill 5 yrs ago, first time in 17 yrs. My town is currently conducting its first revaluation in over 25 yrs. In between revaluations, calculations are updated annually on a thumbnail basis [Director’s Ratio], where the ave home price is subject to a multiplier representing ave change in mkt price.
I’m wondering about the calculation that TX collected $10billion more in property tax over the last 10 yrs than it would have w/a 2.5% cap: hypothetical, or true? If true, I seriously question how that relates to district school budgets. Because the school budget is the basis for the actual school taxes collected. I.e., a school budget doesn’t double in 5 yrs just because the town got pricey & home prices doubled. It might double if the # of schoolchildren doubled, but then you’d have many more residences to tax.
What I find most confusing about the proposed cap: the state is expected to “make the municipality whole” [= maintain the same budget] via increased/ less state aid, depending on how the 2.5% cap calculation affects the town budget. Isn’t the concept of a REtax cap to keep the wealthy folks from gilding the lily? — & to make the state more affordable for residents, & lure new biz? This proposal shifts the revenue sources around, but supports the status quo.
Disclaimer– Our NJ laws may be no better. We’ve had a 2% prop-tax cap operative for 8 yrs. My town has kept increases down to 1.2-1.8% in the last 3 yrs.
However. The die was already cast before the cap law. Statewide equity was established in 1990, i.e., poorer districts get a proportionally larger share of state aid. [E.g., my town gets 4% of school budget from state aid; nearby Newark gets 82%]. During the 21 yrs between school-funding-equity implementation & 2% REtax cap, municipalities were free to levy whatever dizzying increases they needed to maintain school quality> RE value, & locals ponied it up. So, our state laws also maintain an inequitable status quo…