Some Texas Republican lawmakers are advocating raising taxes in order to make up for the recent $4 billion cuts to public education. Only a few days after the passage of major budget cuts to Texas, most of which devastate the health care industry and pubic education, reality is setting in. Even the G.O.P. realizes that in order to make things work, we will have to – ahem – “raise taxes”. That’s right, when Governor Rick Perry prides himself on a state that has job growth without raising taxes, Texas has put itself in a hole so big, even Republican lawmakers find themselves advocating for one of the biggest issues they have always stood against.
From the Dallas Chamber of Commerce:
Upon passage of the budget, Governor Rick Perry said, “I am pleased the legislature voted tonight to pass a balanced budget that doesn’t raise taxes and leaves more than $6 billion in the Rainy Day Fund...This budget makes a historic $15 billion cut from current spending, while still providing ample funding for our good teachers, our school children and our seniors.”
This statement by Lt. Gov. David Dewhurst is misinformed, and that comment is either intentionally misleading or an exercise in ignorance. Anyone in education knows the deep costs of these cuts: thousands of jobs lost, lowering the quality of education because of higher teacher to student ratios, and lowering of teacher salaries and benefits.
Texas schools will suffer from Legislature's funding decisions - Posted Saturday, Jun. 25, 2011, By Wendy Davis,Special to the Star-Telegram
...For the first time in Texas' known history, student enrollment growth will not be funded. The approximately 170,000 new students entering the school system during the new two years will have to be absorbed with fewer resources and fewer teachers....Already ranked 44th nationally in what it spends on education per pupil, Texas' further funding decrease will have a consequence in the classroom, there is no doubt.
This is not to say that lowering taxes in a tough economy isn’t important, it is. But expecting decent public services without decent funding is illogical, unreasonable and unrealistic. And it looks like the rubber finally met the road on public education.
Facing state cuts, will Texas schools raise local taxes? by Morgan Smith / Texas Tribune - Posted on June 13, 2011
Sen. Steve Ogden, R-Bryan, is the latest lawmaker to say it: A $4 billion shortfall in state financing does not have to mean teachers lose their jobs.
At the end of the legislative session, Ogden, told his colleagues in the Senate that school districts could spend their reserve money. They could “tighten their belts in other areas,” he said. Or they could pursue what he called “a good exercise in democracy” and ask voters to raise local taxes.
Across the state, school districts are considering the last option. But will the same public that sent lawmakers to Austin in November with an overwhelming no-new-taxes imperative accept paying more locally to preserve programs and jobs?
The local portion of public education financing in Texas comes from property taxes: maintenance-and-operations rates set by school boards and, if applicable, a facilities bond interest rate. In 2006, as part of an overhaul of the state’s school finance system, the Legislature voted to reduce property tax rates by a third, setting the majority of districts’ maintenance-and-operations rates at $1 per $100 of property value, with a cap of $1.17. Any district that wants to levy a tax rate higher than $1.04 must hold a “tax ratification election.”
About 20 percent of districts have already reached the $1.17 limit, according to data from the Equity Center, a school finance lobbying and research organization.
Legislators who voted for budget cuts and changes to education in SB8 and other bills now say it’s up to school districts to find the money now and raising taxes may be the only way to do it. But there’s just one problem, the tax laws passed in 2006 that make it much more difficult for local school districts to raise taxes.
Rick Perry’s website touts the swath of cuts across the state in the last 10 years, and result, it says, is more jobs in Texas than any other state. But no one ever gets something for nothing. Working Texans and public education are paying for tax benefits that have been given to employers for years.
http://www.rickperry.org/issues/fiscal-conservative
Cutting Business Taxes. During the 81st Legislature, Gov. Perry called for and signed HB 4765, which exempts small businesses with less than $1 million in gross revenues from the state’s franchise tax, up from $300,000. This is expected to spare 40,000 small local employers from paying any franchise tax, saving them $172 million in taxes, money which now can go to paying employees, expanding their businesses and otherwise bolstering the Texas economy. In 2006, Gov. Perry also signed legislation, which has to date saved Texans an estimated $16.4 billion in property taxes.
“In 2006, Gov. Perry also signed legislation, which has to date saved Texans an estimated $16.4 billion in property taxes,” and is now a huge impediment to schools who are trying to raise local taxes to make up the difference to keep education from falling apart.
But there may be some hope. Some districts are finding new and creative ways to glean money from their tax base since the state left them few options. Mission ISD and other districts in the Rio Grande Valley are trying to keep their districts afloat knowing that voters will rarely, if ever, vote for a raise in taxes (of course state legislators and Governor Perry knew that when the law was passed in 2006). But what other options do they have? Certainly we can all work to trim the fat out of our budgets and get rid of wasteful spending, but that is a process that is worked on over years by school boards, superintendents and voters.
School boards grapple with next year's taxes | taxes, year, boards - TheMonitor.com June 30, 2011
MISSION – The school board here may soon join a growing list of Hidalgo County districts eyeing a complex tax maneuver that would help thwart state budget cuts next year but could lead to future tax hikes.
Voters would first have to approve the so-called tax swap, which does not increase a district’s current tax rate and simply transfers a portion of the debt service rate to the maintenance and operations side. The move forces the state to fork over millions in additional education dollars to the district.
The Mission district — which faces a $5.7 million cut next year — could end up banking $7.6 million.
“Instead of losing money this year, (Mission) can offset state cuts,” he said. “It’s not going to cost taxpayers a single penny. All we need is voter approval.”
Last fall, Donna and La Joya voters OK’d the swap and secured more than $20 million combined for their schools’ day-to-day operations.
And so far, the Sharyland and Pharr-San Juan-Alamo school districts have made tentative steps to ask voters for a swap this fall, while Edinburg has expressed some interest, Walch said.
“If we don’t do it, we’re leaving $7.6 million on the table,” Mission Superintendent Cornelio Gonzalez explained. But “the amount that we make up from the swap decreases ... unless you increase the tax rate. If enough districts begin asking voters to approve the same thing, it might benefit them all, Mission Trustee Oscar Martinez said. “That’s critical,” he said. “We can piggyback on these other districts (and) convince voters together.”
So school districts and voters have a choice, we can either remain delusional about our budget crisis in public education and pretend it isn’t there, or we can work with the bitter dish we’ve been served to try to make it work in our favor.
Representative Kelly Hancock is of the delusional mind, telling the lie that voter so desperately would like to believe, that the 82nd Legislative Session actually made public education a priority; suggesting that cutting public education and leaving billions in a rainy day fund was the “responsible” thing to do for our children.
Texas lawmakers made tough but responsible decision on school funding Posted Wednesday, Jun. 29, 2011
Now that the Legislature has finished its special session, Texas can be proud that our state budget and legislation have prioritized schoolchildren. It is the right budget in these tough times…We value our state's children and their education. We value local control as the means to provide a quality education.
So even according to Rep. Hancock, it’s up to them. Local school districts working with even less, in a down-turned economy, now have to make it work for the sake of four million Texas children who are struggling to compete in a dwindling job market. We hope that they will get creative, like Mission ISD, to keep public education above water. But thanks to SB8 and the 82nd Legislative Session, we’re running out of ideas, and, for the sake of our students, something’s got to give.
by Fred Martin
When former governor Bill Clements died in the final week of the Eighty-second Legislature—a session dominated by a $27 billion budget shortfall—there was one story that found its way into almost every obituary of the irascible, arch-conservative oilman. In 1987, faced with a budget shortfall of his own, he had insisted on the leanest budget the state could manage, only to finally sign off on a $5.8 billion tax increase to fund public education. As Clements understood, in a state that already budgets lean (Texas currently spends the least per capita in the nation), you cannot cut your way out of every shortfall—no matter what you promised on the campaign trail.
by Fred Martin
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