Back to School for State Leaders

"Gov. Rick Perry boosted the political stakes last week when he vetoed the $35 billion that lawmakers agreed to spend on schools under the current finance system, raising the possibility that schools will be unable to open this fall." Perhaps a 30-day session will "resolve" school finance in Texas. We'll see. -Angela

79th LEGISLATURE: SPECIAL SESSION
30-day session begins Tuesday to revisit money for education.
By Jason Embry, W. Gardner Selby / AMERICAN-STATESMAN STAFF
Tuesday, June 21, 2005

Legislators who have failed three times since 2003 to approve a new system of paying for public schools will find the stakes higher than ever today when they return to the Capitol to take another swing at the issue.

They will begin a 30-day special session at noon with hopes of trading cuts in school property taxes for higher taxes elsewhere while putting more money into education than the incremental increases they approved earlier this year.

With the 2006 primary nine months away, they're also looking to blunt criticism that their regular session ended without action on one of the state's most pressing concerns.

"We do not have any kind of a deal on the revenue aspect," House Speaker Tom Craddick said about the key issue of how to replace money schools would lose if property taxes were cut. "We're here, and we're going to do the best and most we can to make this happen. Where we get, I can't say."

Gov. Rick Perry boosted the political stakes last week when he vetoed the $35 billion that lawmakers agreed to spend on schools under the current finance system, raising the possibility that schools will be unable to open this fall.

That's extremely unlikely because state leaders could restore the money if the special session fails, but even the mention of schools not starting turns up the heat on lawmakers.

Lawmakers already were under heavy pressure earlier this year to draft a new school finance system. A state judge has ruled the current system unconstitutional, largely because of underfunding, in a decision that is under review by the Texas Supreme Court.

One aspect lawmakers will review is whether property-wealthy school districts must continue to send money to districts with fewer resources.

Lawmakers are also hearing from constituents who are tired of property tax bill increases.

The House and Senate each passed proposals during the regular legislative session, but leaders could not agree on a final, compromise plan before the session ended May 30. Key lawmakers say those differences, particularly on taxes, remain.

The sticking point was how to replace at least $3.5 billion a year in reduced property taxes. House members wanted to rely more heavily on consumption taxes; the Senate put more of the burden on businesses.

Perry will unveil a proposal today that "will define the middle ground" between the House and Senate, spokesman Robert Black said. He refused to confirm or deny details.

Craddick and Lt. Gov. David Dewhurst said Perry would push for an increase of seven-tenths of a cent in the state sales tax, from 6.25 cents per dollar to 6.95, and extend it to car repair bills and cosmetic surgery. The House had pushed for a 1-cent increase in the sales tax; the Senate approved a half-cent boost.

Craddick said House members want to see at least a 35-cent cut in the property tax rate, which would put the maximum rate for school maintenanceoperations at $1.15 per $100 of assessed property value, with more cuts in future years.

"I don't think the members of the House will vote for a small bite," he said.

Steve Ogden, chairman of the Senate Finance Committee, voiced a similar concern but added that senators realize they might have to phase in property tax cuts over several years to pass a credible plan.

In addition to the tax swap, lawmakers will use the special session to discuss teacher pay, testing, textbook funding, school ratings and other education reforms. Lawmakers have expressed optimism about reaching agreement on the education measures, saying they were close to one at the end of the regular session.

"We have a lot to build on, and I think that's exactly what we're going to do," said Sen. Florence Shapiro, R-Plano.

Also Monday, House Democrats urged their colleagues to revisit a school finance plan that the House voted down in March.

The Democrats' plan calls for $45,000, instead of the current $15,000, of a home's value to be exempt from school property taxes. It also would give a smaller property tax cut to businesses than House and Senate negotiators had agreed to deliver by the end of the session.

The maximum rate for school taxation would fall to $1.25 per $100 in property value. Democratic leaders said their plan would deliver a larger tax cut than the one that passed the House for the owner of an average home in nearly every part of a state. They did not specify how they would raise the money to pay for the proposal.

"Our plan would provide more resources to Texas schools and greater tax savings to the vast majority of Texas homeowners," said Rep. Scott Hochberg, D-Houston.

Kent Grusendorf, R-Arlington, chairman of the House Public Education Committee, said he and Rep. Phil King, R-Weatherford, could file legislation expanding items covered by the state sales tax and use the extra revenue for cuts in local school property taxes, all subject to voter approval.

"I'm not married to any particular idea," Grusendorf said. "I like the idea of finding additional ways to reduce property taxes and allow voters to decide."

State officials estimate that a special session can cost about $1.7 million.

jembry@statesman.com; 445-3654
wgselby@statesman.com; 445-3644