The portion of school property taxes that funds operations and maintenance could be eliminated in six to 10 years, according to an upcoming paper by the Huffines Liberty Foundation. That works out to about a 40% permanent property tax cut for residents of Texas – without other taxes being increased or funds being reduced for public schools.
We need to take three simple steps to make this happen.
First, is to use 90% of the current and future budget surpluses so that school property taxes will be replaced with state revenue that would increase state funding of schools to 100%. Since the state already pays for 45% of our schools, this reallocation is a no-brainer. We can perform this replacement within the existing school funding formulas which control local funds and the flow of state.
The second is to exercise fiscal discipline. This means, suppose the Legislature limited state spending growth to 2.5% annually; in ten years, the M&O school tax would be gone. If the current spending level, is kept by the Legislature i.e., zero growth, the M&O tax would only take six years to be eliminated.
The third is to freeze school property taxes and local governments should be required to have permission from voters to surpass the No New Revenue tax rate.
In the past, whenever there is an attempt to reduce property taxes, schools and local government had to increase rates to challenge the effort.
(Photo: The New York State Senate)
