Recent state legislation addressing property-tax relief and school finances is getting a mixed reaction from area officials.
On one hand, leaders in local cities agree taxpayers deserve a break. However, they fear newly adopted limits on property taxes could prevent towns from meeting mandates, keeping up with growth and maintaining services.
Meanwhile, after years of wrangling over an equitable system to fund schools, education leaders say state lawmakers’ sweeping financial reforms are a win for public schools.
Gov. Greg Abbott said Senate Bill 2, a significant property tax reform bill, and House Bill 3, a major school finance bill, were major goals for the 86th Texas Legislature.
According to the Texas Property Tax Reform and Transparency Act, cities, counties and other taxing entities would need voter approval to bring in 3.5 percent more property tax revenue compared to the previous year.
SB 2 cuts the 8 percent rollback rate local governments enjoyed for years.
Municipal leaders statewide worry that property tax caps could force them to increase fees and/or cut services and staffing. SB 2 does let cities amass unused additional revenue for up to three years for later use.
Many cities must address the effects of such legislation as they start preparing their next fiscal year budgets.
Jeff Coyle, San Antonio’s government and public affairs director, told the City Council on June 5 SB 2 is not property tax relief but rather a cap on the city’s future growth.
“The impacts of this obviously will be felt going forward,” he added.
Some area leaders said the results could have been worse. Some lawmakers previously backed a 2.5 percent rollback rate.
“I think we walked away in fairly good shape, all told,” Mayor Ron Nirenberg added.
Alamo Heights Mayor Bobby Rosenthal said he expects little to no negative impact from SB 2 for a few years.
“The concern would be if a city had to deplete its reserves or had extra projects that were not of a large scope, but were enough to push a city minimally over the 3.5 percent cap,” Rosenthal said.
Alamo Heights likely would seek voter approval for such a project, like the potential Broadway redevelopment, Rosenthal added.
Speaking as a resident, not as the city’s top elected official, Olmos Park Mayor Ron Hornberger said state legislation limiting local taxes while mandating other local spending measures — without taking into account unintended consequences — was “disingenuous at best and short-sighted.”
“Spending and taxing issues are not political issues. They both involve issues of efficiency and effectiveness, neither of which seems to have been explored fully in the process,” Hornberger said.
Hornberger added Olmos Park is small enough the new legislation may not have an impact.
House Bill 3, a $6.5 billion package, increases the daily per-student allocation, supports pay hikes for teachers and other campus employees, and raises funding for programs such as free, full-day pre-kindergarten for eligible 4-year-olds, low-income and special education students, and dual language.
It also reforms the Robin Hood redistribution system, in which taxes collected from property-wealthy districts are shared with poorer districts.
Legislators estimated HB 3 will cut school tax rates by an average of 8 cents per $100 valuation.
“The increase in the basic allotment is a win for all districts across the state,” said Dana Bashara, Alamo Heights Independent School District superintendent. “In AHISD, that increase also helps with the rate of recapture through Robin Hood.”
Bashara also applauded increased funding for dual language and dyslexia programs, and praised the elimination of outcome-based funding on the State of Texas Assessments of Academic Readiness exam.
Pedro Martinez, San Antonio Independent School District superintendent, called HB 3 a vital investment in public schools.
The district in late June, citing state legislation, approved a pay raise for employees.