A very desperate Lt. Gov. Dan Patrick (not his real name) threatened to use the so-called “Nuclear Option” to cram through a deeply flawed property tax bill that will shift the tax burden even more on to lower income Texans. Here’s the deal, under long-standing Senate rules to take up debate on legislation, three-fifths of the Senate, or nineteen senators, must vote to move forward. Patrick has warned that he will throw out the three-fifths rule. This is called the “Nuclear Option” because it will destroy decades of tradition in the Senate, a body that has served as bulwark against bad legislation because the three-fifths rule requires consensus-building and reaching across the aisle. Feckless Republican leadership was ready to go along with Patrick.
But on Monday, hold out Sen. Kel Selinger (R-Amarillo) relented and allowed the bill to come to the floor for debate despite his strong opposition to the substance. It seems that Selinger (one of the only Texas Republicans with any backbone) was willing to allow bad legislation to proceed in order to preserve Senate tradition. Selinger likely recognized that Patrick’s petulant behavior was the bigger danger in the long run than debating a very flawed tax bill. Patrick could have won a pyric victory by exploding Senate consensus – a move that would have long term consequences should the Democrats ever regain power.
And the legislation itself? Patrick’s bill would have capped property tax revenue growth for local governments, special taxing districts and school districts at 2.5 percent a year, a threshold that many local government officials have said is way too low and will negatively impact their ability to provide critical government services like police and fire protection. As a compromise to get Selinger on board, the proposed legislation now sports a 3.5% annual cap. In any event, local governments could exceed the cap with voter approval. The real kicker, however, is the likely tie into a yet to be filed bill that will increase the state sales tax by 1%. That is the most regressive form of taxation and will likely pass.
From the Annals of Civil Disobedience – In 1968, 400 high school students from Edgewood HS in San Antonio walked out of class and marched to the Edgewood ISD administration office. The EISD was overwhelmingly Hispanic with 90% of students of Mexican heritage. The students were complaining about inadequate supplies and unqualified teachers.
The walk-out resulted in further action. In July, Demetrio Rodríguez and seven other Edgewood parents filed suit on behalf of Texas schoolchildren who were poor or resided in school districts with low property-tax bases. The problem resulted from the numerous school districts in Texas. Bexar County incorporates all or part of 19 different school districts – many of which were set up to segregate students of different races. EISD had one of the highest tax rates in the county but raised only $37 per pupil, while Alamo Heights, Bexar County’s wealthiest district, raised $413 per student. Because of the vastly different appraised value of the property in the districts, the tax rate per $100 property value needed to equalize education funding was only $0.68 for Alamo Heights but a punishing $5.76 for Edgewood.
Thus, began the decades long fight over school funding in Texas. The Rodriguez case ended up in the U.S. Supreme Court which ultimately ruled against Rodríguez, holding that Texas’ school financing did not violate the equal protection clause of the U.S. Constitution and punted the issue back to Texas. The Court also held that the state would not be required to subsidize poorer school districts. But this was not the end as most observers know and the fight over school funding continues.
From the Annals of School Financing – In 1920, voters ratified the Better Schools Amendment to the Constitution of 1876. The amendment removed limits on school district tax rates and was intended to ease the state’s share of school financing. Supporters of the Amendment also hoped it would increase equality in school conditions by enabling each district to improve its facilities. The impact of the amendment was erratic. By 1923, there was a 51 percent increase in overall local taxes for school districts support for public schools. Yet, many school districts refused to increase tax rates and continued to rely on the state as their primary source of financing. The problems caused by the Amendment persist today as the reliance on local property taxes for the majority of public school financing has created great inequity between rich and poor school districts leading the Legislature to enact the very controversial Robin Hood school financing plan.
The Texas Tribune details the Hobson’s Choice facing voters residing within the Houston Independent School. Under the “Robin Hood” plan HISD is due to send $165 million to poorer school districts subject to voter approval. The voters can turn down the plan, but then the district faces the prospect of having some of its most expensive real estate figuratively moved to another close-by poorer district. That is, if the voters say ‘no’ to the incredibly poorly worded proposition on the November ballot, then the state can take some expensive real property off of the HISD rolls and instead assign it to another district to boost its property tax base. Locals bigwigs are lining up behind the “no” vote in the hopes that the Legislature will blink when faced with the proposition of telling the largest school district in the state that it is stripping away some $18 billion of its tax base. And the kicker is, the obligation to pay the $165 million is still there – only to be paid by the smaller number of taxpayers. Red envisions James Dean speeding towards the cliff and this time his sleeve gets caught in the door handle.