TTARA Report Outlines Issues with a State Property Tax Page 1 of 2
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Austin, Texas (myPressManager.com) July 10, 2012 ShareThis
A state property tax may not be the end-all solution to the latest round School Finance Expert
of lawsuits challenging the current school finance system according to a TTARA
July newsletter, A State Property Tax for Schools—Fix or Nix, by the
400 West 15th Street, Suite 400
Texas Taxpayers and Research Association.
Austin , Texas, 78701
Five plaintiffs have filed suit against the current school finance system on a number of issues, including
whether the current system violates the constitutional prohibition against a state property tax, adequacy email@example.com
of funding, equity, efficiency, equal protection and whether taxes are equal and uniform. The case is www.ttara.org
currently before Travis County District Court Judge John Dietz, who is expected to issue a ruling near the
end of the year.
“If lawmakers passed, and voters approved, a constitutional amendment authorizing a state property tax,
that by itself would not bring an end to the litigation,” said TTARA’s school finance expert Sheryl Pace.
“The state property tax is only one of several issues in the lawsuits, and the others would still remain.”
Imposing a uniform
A state property tax would bring equity as to how a large portion of school funds are raised, but would
not impact how equitably the money is distributed—a key issue in the lawsuits. Fixing that would require state property tax
a change in current formulas, not a state property tax. will most assuredly
create winners &
Over the years many elected officials have proposed a state property tax for school maintenance and
operations, most recently at a rate of $1.00 per $100 of taxable value. “Current local tax rates vary losers. Taxpayers in
across districts—many above $1.00, but some below. Local option exemptions vary as well,” Pace noted. districts with lower
“Imposing a uniform state property tax will most assuredly create winners and losers. Taxpayers in
tax rates & broader
districts with lower tax rates and broader optional exemptions would likely end up paying higher taxes,
while others in districts with high tax rates and few exemptions might see their taxes go down.” optional exemptions
would likely end up
And any tax relief could be fleeting, Pace noted. State property tax proposals are typically coupled with
paying higher taxes...
provisions allowing school districts to levy a local option tax for “enrichment,” in order to preserve some
degree of local control. Over time, those enrichment taxes could creep upwards, potentially creating yet
another round of lawsuits over funding equity and equality and uniformity of taxation.
Convincing voters to allow the state to tax their homes may be a tough sell, so many proposals are often
coupled with “sweeteners” such as limits on the growth in the taxable value of homes, or increases in the
current $15,000 state-mandated homestead exemption. “These provisions benefit one group of taxpayers
but come at the expense of others. While some homeowners might see a dip in their taxes, renters and
businesses would end up carrying a heavier load.”
“A state property tax may eventually be a valid part of the school finance discussion,” Pace said, “but it is Want to place myPressManager
important to understand that it does not solve all of today’s school finance issues. In addition, it brings its Press Releases on your site?
own unique set of problems that lawmakers will have to address.”
Click here for Options.
The Texas Taxpayers and Research Association (TTARA) is a non-profit, non-partisan membership-
supported organization of businesses and individuals interested in state and local fiscal policies in Texas
and the way those policies impact our economy. TTARA members operate in every part of Texas; they
employ and provide incomes to thousands of Texans; they produce or provide every type of good or
service Texans consume; and, they provide a huge portion of the revenue that supports public services at
every level of government. TTARA has been recognized as the state’s leading organization specializing in
tax and fiscal policy for more than 50 years.
A link to the Newsletter can be found here: http://ttara.org/files/document/file-4ffae5f462956.pdf
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TTARA Report Outlines Issues with a State Property Tax Page 2 of 2
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TTARA Releases Report that Outlines I ssueswith a State Property Tax(512) 472-8838 • fax: (512) 472-2636
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