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Commentary: School Finance

By Walter Hofheinz, KERA 90.1 commentator

http://stream.publicbroadcasting.net/production/mp3/kera/local-kera-477654.mp3

Commentary: School Finance

Dallas, TX –

Excellent public schools are an essential investment in the future of our state. The simple question is, "How do we raise the needed money?" Once again, the legislature has failed to effectively meet the needs of our children, instead working to shift tax burdens to those less able to pay while raising their own retirement pay.

The plans that thankfully were not passed in the just ended special session would save $180 for a Dallas homeowner with a median priced home worth $131,900. This "saving" would be more than offset by increases in the sales tax, including a sales tax on car repairs.

Thus the Legislative Budget Board concluded that the proposed changes would actually increase taxes for anyone making less than $100,000 per year - as much as 4.5% for those least able to pay. At the same time, those making more than $141,000 would save 2.5%.

The most amazing thing about these machinations is that they still do not provide significant additional resources for education.

Robin Hood must be replaced, but it should be replaced by a system that fairly and broadly distributes the burden of financing our public schools, while increasing the local control and resources available to every school district in Texas.

How?

First, repeal Robin Hood. This will allow property rich districts to reduce their tax rate, providing much greater property tax relief than will be accomplished under any of the proposed plans. Were it not for Robin Hood, HPISD, for example, could reduce its tax rate by more than half and still have available more funds than at present.

Second, index per pupil expenditure to the average amount spent by the ten wealthiest school districts, including all expenditures. This will allow those with sufficient resources to make optimal education decisions to set the standard, bringing all our school districts up, instead of pulling the best down.

Third, like opportunities, tax rates should be fairly applied to all districts. All districts would pay property taxes at the average rate of the ten wealthiest districts. State funds would then make up the difference between local tax revenue and the indexed per-pupil expenditure. If they chose to, recipient districts could impose supplemental taxes to further enhance educational opportunities, without losing their state funds.

Fourth, raise the needed funds by changing the franchise tax to a tax on Texas gross profits of all statutory business entities doing business in Texas (this would include corporations and statutory partnerships, but not individuals), increasing the sales tax by a rate matching that imposed on businesses, and dedicating all revenue from both to education. Rates could be automatically determined by the total amount of revenue needed.

These steps would provide a broad base upon which to fund our investment in education, eliminate the legislative wrangling that has precluded sufficient funding, and leave control in local school boards.

The simple fact is that the present system is fundamentally broken. The legislature has been unable to enact a plan that maintains local control, brings all districts up to the level of our best districts, and does not shift taxes to the less affluent. It is time to make fundamental changes in our tax and education finance system to provide excellent education for Texas children.

 

Tag: Walter Hofheinz is an attorney from Dallas. If you have opinions or rebuttals about this commentary, call (214) 740-9338 or email us.