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State Senator Proposes Property Tax Law Change

The state of Texas has more than 1,000 school districts. According to the Texas Education Agency there are 9,232 public schools, with 333,164 teachers serving 4.8 million public school students. Of those schools, 76 percent are Title I Schools (Improving the Academic Achievement of the Disadvantaged), 15 percent of students in Texas are in limited-English Proficient Programs and slightly more than 50 percent of students in Texas schools are eligible for free or reduced lunches.

This turns out to be a major taxation issue, resulting in lawsuits related to funding disparities. It was recently reported that a state senator is proposing a Texas tax law change that would create a state property tax to pay for public schools, thereby replacing local property taxes as a funding mechanism.

According to the senator, this is a change in the collection mechanism, rather than an overall change in the tax rate that property owners would pay. The main difference might be in the distribution of those funds. Simply put, there would be a redistribution of funding to put more assets in the disadvantaged schools.

The tax law change would require a state constitutional amendment.

The tax to property owners would be $1 for every $100 of property valuation. Local school districts would have the option of taxing up to 17 additional cents for local projects, but those local taxes would be subjected to sharing with the less wealthy districts.

At this point the tax law change is a proposal only. The latest lawsuit regarding school funding will be in court this October.

Source: The Dallas Morning News, "Senator pitches new state property tax for schools," Terrence Stutz, Sept. 24, 2012

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