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Monday, July 04, 2005

Senate OKs Tax Cut Bill; Robin Hood to Remain

Talks with House on compromise expected to begin next week

10:11 PM CDT on Thursday, June 30, 2005

By TERRENCE STUTZ / The Dallas Morning News

AUSTIN – In a carbon copy of school finance legislation approved in May, the Senate passed a bill Thursday that would raise teacher salaries, cut school property taxes and require schools to start classes after Labor Day.

It would also preserve "Robin Hood," the redistribution of property taxes from high-wealth districts to low ones, without limiting how much such districts are forced to send to poorer areas.

The action by the Senate clears the way for negotiations with the House, which passed its school finance legislation Tuesday. Senate leaders said they hope to start talks by the middle of next week.

The Senate bill was approved on a 27-4 vote. All four no votes came from Democrats who said it contained inadequate funding for schools and teachers' salaries – a view strongly endorsed by virtually every school district and education group in the state.

All Dallas-area senators supported the legislation.

Senate leaders pointed out that their bill drew less objection from educators than the House measure, which would place more requirements on how the $1.5 billion a year in new funding should be spent. All school districts would be guaranteed at least 3 percent more money in the new school year under both bills.

"This plan demonstrates that our priorities are in the right order – education reform and excellence in the classroom, and a decreased burden on property taxpayers," said Sen. Florence Shapiro, R-Plano.

The measure would boost funding for school districts by about 4.5 percent a year. The Dallas school district would get an additional 6 percent this fall and another slight increase the following year.

The Senate approved less immediate property tax relief, voting to trim the maximum rate from $1.50 per $100 valuation to $1.30. But both chambers have pegged the tax rate at $1.10 in the fall of 2006, an overall reduction of 27 percent from the current rate.

While teachers' groups don't like either school finance plan, they are less hostile toward the Senate proposal because it includes a raise of $2,500 for teachers over the next two years. The House bill proposes an average $1,500 salary increase.

Teacher groups also recoil at a proposed merit pay plan in both proposals. At least $150 million a year would be allocated to reward teachers for improved student achievement, as reflected in test scores.

"The Senate bill provides a better starting point for fixing school finance than the disaster passed by the House, but ... we find the level of new funding woefully inadequate," said Rob D'Amico of the Texas Federation of Teachers.

Another key difference lies in the changes to the "Robin Hood" provisions of the current law. About 135 high-wealth districts are now required to give property tax revenues to poorer districts to meet court requirements for funding equity among districts.

While both chambers would reduce the amount of revenue surrendered because of their decrease in local property taxes, the House voted to put a cap on the amount of money that any district would have to give up – no more than 35 percent of its revenues.

Senate leaders said Thursday that they cannot accept that limit.

"Most of my Senate colleagues think that is an unfair advantage for a very few schools districts at the expense of many districts," said Ms. Shapiro, whose main home district, Plano, has to surrender revenue. "I don't see how we can agree to something like that."

Still, Lt. Gov. David Dewhurst and other Senate leaders have indicated that it will be easier to reach agreement with the House on school finance and education reforms than on companion legislation that would swap billions of dollars in property tax cuts for increases in other state taxes.

A House committee approved a bill to increase the state sales tax by a penny to 7.25 percent, close loopholes in the business franchise tax and raise the state cigarette tax by $1.01 a pack. Most senators want to raise the sales tax by less and to craft a franchise tax to hit more businesses than the House.

Sen. Mario Gallegos, D-Houston, was one of the few senators to speak against the school finance bill Thursday, saying that none of the school superintendents in his Senate district support the measure.

He offered an alternative drafted by House Democrats, with bigger raises for teachers and more breaks for homeowners via an expanded homestead exemption, that was narrowly rejected in the full House on Tuesday. The Senate voted it down as well, 21-10.

E-mail tstutz@dallasnews.com

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