Is Texas Incenting School Districts to Cannibalize Their Tax Base?
Each Texas Budget Cycle starts off with "there is a public school funding crisis."
But every cycle begins with $1billion dollars of funding to school districts for tax value limitations out by the school districts.
Chapter 313 of the Texas Tax Code gives school districts the authority to grant tax value limitations for certain commercial development within the district. Under Chapter 313, the school district granting such an abatement, simply passes the bill of the foregone taxes to the State of Texas' general fund.
1. It puts the school districts into the role of economic development instead of student development. Why are school districts being tasked with economic development in the first place? Aren't there Chambers of Commerce, Regional Economic Development Councils, City Councils, County Commissioners all charged with creating a vibrant community for their residents? School districts too stretched to buy supplies for the classrooms or text books seem to find funds to hire staff to implement Chapter 313 abatements!
2. It confounds the issue of school funding "fairness" School districts fortunate to be located within an economic bulwark zone can use this chapter to access Texas' general funds. For example, any district within 100 miles of the golden arch of the Texas Gulf Coast Petrochemical Complex would have abundant utilization for such a program. Districts in the Texas Panhandle are now accessing the state general funds with abatements for windmills. Unfortunate school districts too far from the petrochemical complexes and not in the wind patterns are out of luck. Yet since the funds come from the Texas general funds we all are paying for the effect of these abatements.
3. Districts granting such abatements deflate their property tax value to the state in the determination of their participation in the Recapture Payments (Robin Hood). In essence, by granting these tax abatements school districts artificially keep their property tax base understated and in so doing avoid paying their share of the "Robin Hood" tax. To make up for the shortfall, the state of Texas must again reach into the general funds, further compounding our school funding "crisis".
4. Existing companies and homeowners who have been paying their property taxes and contributing to the district's economic prosperity are left with no such tax relief.
5. The need to harden our campuses with the recent rampages on campuses across the country and now in Santa Fe, TX, schools will be needing funds to "harden" their campuses. To accomplish this, districts will need the funds from the State of Texas. Chapter 313 may be a luxury the state can no longer afford.
1. School districts should not even be involved in the granting of tax abatements. Decisions made for the economic prosperity of the local community, should not require reimbursements from Texas' general funds.
Repeal Chapter 313 of the Texas Tax Code.