September 29, 2014 5:15 PM

Property tax value increases kicked back to state will cover student enrollment growth this budget cycle

Temporary largesse conceals structural issues; looks perilously close to unconstitutional statewide property tax

The state wouldn’t have to raise a dime this budget cycle and could still manage to fund school finance, all on the back of incremental growth in local property taxes

It seems almost impossible to concede such a reality, only weeks after District Judge John Dietz predicted the dire consequences of a school finance system that funded itself on a margins tax that continues to dwindle. But a deal struck eight years ago with local school districts is going to fill that hole handsomely, according to a recent presentation to the Senate Finance Committee by the Legislative Budget Board.

Such a reality seems hard to imagine. Four years ago, lawmakers were slashing school finance along with the rest of the budget, carving $5.4 billion out of both school payments and grant programs at the Texas Education Agency.

But the finances for school funding have recovered, and recovered big, due to something referred to as “target revenue.” When the Texas Supreme Court ruled in the last round of school finance that school districts did not have “meaningful discretion” with property taxes, the solution was to freeze property values, compress property taxes by a third and create room for tax growth through voter tax ratification elections, referred to as TREs.

By Kimberly Reeves