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LAST LEGISLATIVE EFFORT ON SCHOOLS PROBABLY WOULDN'T HAVE PASSED MUSTER? By Will Lutz
by DallasBlog.com
Wed, Nov 23, 2005, 04:41 PM
Justice Nathan HechtThere is one critical paragraph of Justice Nathan Hecht's majority opinion that does not seem to be getting much attention from the press this evening but could be critical in any future school finance discussions. Hecht issues a pointed warning to lawmakers when he wrote, "Various legislative proposals during the past year to remedy perceived problems with the public education system and its funding would reduce the maximum ad valorem tax rate and allow it to be exceeded for certain purposes. While we express no view on the appropriateness of any of these proposals, we are constrained to caution, as we have before, that a cap to which districts are inexorably forced by educational requirements and economic necessities, as they have been under Senate Bill 7, will in short order violate the prohibition of a state property tax."
The proposals Hecht describe sound an awful lot like HB 2 -- the leadership's school finance bill (which did not finally pass). In that bill, the lawmakers put a lot of new state money into the system and lowered the property tax cap. (The actual amount of the lowered cap varied from $1.05 to $1.25 at various stages of the process). On top of the new, lower cap, lawmakers authorized school districts -- with voter approval -- to levy up to an additional 15 cents of enrichment tax, phased in over several years. There was, however, one catch on which the supreme court did not opine. The bill allowed school districts to go over the cap if two-thirds of district voters approved. To our knowledge, no Texas court has ever faced the issue of how to treat a cap that can be busted by a super-majority.
The core constitutional infirmity cited in the opinion is a lack of "meaningful discretion" on the part of school districts, rather than the property tax rates or the mix of state vs. local financing of education. The paragraph quoted above appeared to be a not-so-subtle warning to the legislature. The key to a constitutional school finance system lies not in the rate, but in the amount of discretion school districts have and whether there are significant variations in the rates charged.