February 6, 2004Lt. Gov.: No change
seen for ag exemptions
By Mike Barnett
With a special session of the Texas Legislature forecast for April or May to deal with the controversial funding of Texas schools, Lt. Gov. David Dewhurst made a vow at the Texas Farm Bureau's Leadership Conference in late January that was music to farmer's and rancher's ears: "When we talk about school finance, let me make one thing perfectly clear...There will be noabsolutely no, over my dead-cold political bodychanges to the ag exemption."
Noting that "educating our young people" is one of the primary tasks of government, Dewhurst's strategy is to put together a school financing plan that "achieves education excellence, reduces your local property taxes, maintains equity, but provides more resources to improve our schools tied to performance and accountability."
A tall order, yes. But Dewhurst feels the time is ripe for reform.
The Lt. Governor noted that in 1950, the state was paying about 60 percent of the bills for public education with local property taxes paying 40 percent. That equation has seesawed now to where the state funds 37 to 38 percent, while local property taxes account for 61 to 62 percent of the cost.
"My concern is that now, with well over half...soon very close to all of our 1,034 school districts at the max of $1.50 of the tax rate...that we're going to find ourselves with the Texas Supreme Court saying that we have a state property tax, and therefore our state school finance system is unconstitutional because we cannot have a state property tax without changing the constitution," he said. "And if we do that, we'll find ourselves in the same shape we were in 10 years ago as we came out of the Edgewood decision, and we'll have a gun against our heads and we'll overnight be trying to solve our school finance challenge."
A second reason reform is needed is the changing structure of the tax base. Dewhurst said Texas, over time, has gone from an agrarian-based society to a manufacturing-based society to the current service-based society.
"But our tax system doesn't reflect that," he said. "It's still back on the manufacturing and the property. We're literally leaving billions of dollars of additional resources for public education on the table because we're focusing our taxes on property owners and not on our service industry, which is the fastest growing part of our economy."
As leader of the Texas Senate, Dewhurst was successful in the last session passing a school finance bill in that body.
"All 31 senators came together on a plan that I worked with them on that would cut your local property taxes in half..." he said. "Our Senate plan maintained equity among all our school districts, rural and urban, property wealthy and property poor."
That plan would have replaced revenues lost in the property tax cut with a sales tax on services.
Regardless of which plan is finally adopted, Dewhurst noted that any new resources going to public education should be in the form of incentives..."funding that's targeted to award our principals and our teachers who do exceptional work in their schools."
Another need: "We ought to look at providing flexibility, and doing away with as many state mandates as we can, particularly unfunded state mandates," he said.
Dewhurst said the Joint Committee on School Finance is working hard to reach a consensus.
"We're making progress," he said. "We don't have anything in concrete yet, but I'm working as hard as I can and our senators are going to work as hard as they can to come up with an agreement with the House so we can get into a school finance session in April or May."