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email: wwh@hofheinzlaw.com
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Excellent public schools are an essential investment in the future of our state. While enough money is not the sole foundation of excellence, it is a necessary component to hire good teachers, provide good facilities, teach fundamentals, and offer a broad program. The simple question we must answer is “How do we raise money to meet those needs?” Once again, however, the Republican controlled legislature has failed to effectively meet the needs of our children, instead putting first shifting our tax burden to those less able to pay.
The so-called effort to lower school property taxes is simply another misguided effort by the Republicans to shift the tax burden of educating our children from the more affluent to the less affluent. The median price of a home sold in Texas in May was $131,900, resulting in approximately $1,800 in school taxes in the DISD .
The plans which failed to achieve enactment in the special session would save such a homeowner about $180. This “saving” would be more than offset by increases in the sales tax and business tax, including a sales tax on car repairs.
Thus the Legislative Budget Board’s conclusion that the proposed changes would actually increase taxes for anyone making less than $100,000 per year—as much as 4.5 % for those least able to pay—at a time when real wages are decreasing and it is becoming harder and harder to make ends meet. At the same time, those making more than $141,000 would save 2.5%
The most amazing thing about these machinations is that if adopted they still do not provide significant additional resources to any but our wealthiest school districts.
Robin Hood must be replaced, but it should be replaced by a system that fairly and broadly distributes the burden of financing our public schools through general revenue, while increasing, not limiting, the local control and resources available to every school district in Texas. How?
First, repeal Robin Hood. This will allow property rich districts to reduce their tax rate below the maximum permitted, providing much greater tax relief to the residents of the wealthy districts than will be accomplished under the Governor’s proposed plan. Were it not for Robin Hood, HPISD, for example, could reduce its tax rate by more than half and still raise more funds than under the current transfer system.
Second, index per pupil expenditures to an amount equal to the average amount spent by the ten wealthiest school districts, including all expenditures. This will allow those with sufficient resources to make optimal educational decisions set the standard, bringing all our school districts up, instead of pulling the best school districts down.
Third, provide state general revenue funds equal to the difference between property tax revenues in a district at the average rate imposed by the ten wealthiest districts, and the amount required by the indexed per pupil expenditures. The recipient districts would then be free to impose additional property taxes if their local school board determined that spending more than the indexed amount would enhance the educational opportunities provided.
Fourth, raise the needed funds by changing the franchise tax to a tax on Texas gross profits of all business entities doing business in Texas required to file other than an individual income tax return (this would include corporations and statutory partnerships, but not individuals) and increasing the sales tax rate by an amount matching that imposed on businesses, with all revenue dedicated to education. Rates could be automatically determined by the total amount of revenue needed.
This would provide a broad base upon which to fund our investment in education, while still exempting necessities which affect the less affluent, and completely eliminate legislative wrangling which has precluded sufficient investment in education.
The simple fact is that the present tax structure does not provide enough money to do what needs to be done, or any way to generate enough money. The legislature has been unable to enact a plan that maintains local control, brings all districts up to the level of our best districts, and does not shift taxes to the less affluent. It is time to consider fundamental changes in our tax and education finance system to provide excellent education for Texas children.
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©2005 Walter Wm. Hofheinz, limited permission granted for redistribution and copying with all attribution and communication information preserved.