Texas school funding reforms proposed

AUSTIN, Texas, April 30 (UPI) -- Texas Senate leaders Wednesday proposed legislation to reform the state's controversial "Robin Hood" school finance system, but there may not be enough time in the current legislative session to give it serious consideration.

The law, which forces property-rich school districts to send money to poor districts, has been one of the major issues in the current session along with the state budget and skyrocketing homeowners insurance rates.

Legislators from wealthy suburban school districts have promised to do something about the school finance system, but lawmakers in some of the poor, rural districts around the state have no complaints.

The House passed a bill this week that would repeal the law by the fall of 2004, provided the Legislature enacts a new law by then. House Speaker Tom Craddick, R-Midland, named a select committee to study school reform.

Republican Gov. Rick Perry supports the House strategy because he says there isn't enough time to complete the task this session. He has promised to call a special session when there is a consensus on reforms.

"As I said last week, any school finance reform proposal that is presented needs careful study," he said. "With little more than a month left in this legislative session, a lot of hard work remains to be done on important issues like balancing the budget without new taxes, insurance reform and tort reform."

The House bill would also provide $1.2 billion in new funds for public schools over the next two years, an extra $150 per student. The funding would be a stopgap financing bridge until a new law is enacted by the Legislature.

The senators, however, have come up with their own plan that proposed sweeping changes right now, although there may not be enough time to consider it this session. Some senators at least it would be a start on the debate.

The proposal unveiled Wednesday by Republican Lt. Gov. David Dewhurst and a group of senators would make major changes in Texas school financing, shifting the tax burden from local property taxes to a combination of state property and sales taxes. Local property taxes would be cut in half.

"What we are proposing is to reduce our local property taxes by 40 percent," Dewhurst told a news conference Wednesday.

Under the legislation, a state property tax, a sales tax increase and an expansion of the sales tax to currently exempted services would make up for the lost revenue at the local level.

The state property tax would be capped at 75 cents per $100 value, with a provision allowing a local district to enrich its funding by another 10 cents. The sales tax would be increased from 7.5 percent to 7.85 percent and services such as automotive repairs, new construction, child day care, and real estate services would have to collect sales taxes for the first time.