The 'Silent State Tax'


Current school finance system is taxation without representation ... and there is no desire to fix it


Our public school finance system in Texas has been broken for the past three decades, yet no meaningful solutions have been passed and implemented.

Is this because the people that we elect to do our bidding in the legislature do not have the capacity or resources to come up with a solution or is it because they simply do not care about public education and the 5.3 million students in Texas Public Schools?

If you listen to their words, they will say that they care and that they are supportive of Texas public education, but if you look at their actions or in this case, their inaction, then you will find the answer.

Our local state representative said at one of our recent board meetings that there is no appetite in Austin to fix school finance. I agree with his assumption and let me explain to you why.

The state has what I refer to as the “golden goose” or the “Silent State Property Tax” in the form of recapture that allows the state to collect revenue from you to subsidize other schools and agencies within the state.

In Texas, a state property tax is supposed to be unconstitutional, however, our state supreme court has upheld this practice and deemed it constitutional.

How can this be the case? How is this not a state tax? You pay your local school taxes, and have elected local trustees that represent you to decide how these funds will be spent in theory.

In reality, the state mandates that we send 30 cents of every dollar and $8.5 million in total this year to the state because we are considered property wealthy. Therefore, 30 cents of every dollar you pay locally in essence becomes the silent state tax of which I speak.

Your locally elected trustees have no control of these funds and that money becomes part of the state revenue. Because our state officials have full control of these dollars, we have no say locally in how they are spent.

Can you say taxation without representation? I can, because we have suggested time and time again that our local representative and senator support a change in school finance, however, both have been unsupportive.

Before this year’s session began, property poor and property rich school district superintendents and board members from across the state crafted a school finance proposal that we all compromised on to offer as a solution to our state leaders. We enlisted endorsements from the majority of the school associations and the bill emerged from the House in the form of HB 21.

Unfortunately, the bill was ultimately stripped of its funding by the senate and the lieutenant governor added vouchers to ensure its demise in the House. So once again, the status quo for school finance will remain.

Here is a recap of the status quo that is our current reality: Your rising property taxes do not benefit us locally.

We do not receive any benefit or additional revenue when your local property values increase.

School districts are held to a certain level of funding per student (the same amount since 2008 without a cost of inflation adjustment), and the increased revenue is passed on to the state. So when our local revenue increases, our state revenue decreases.

The state then uses the difference and can “save” money and lower its costs to public schools. In the last two-year period, the state saved around $4.25 billion from property value growth generated from local property taxes.

From 2008-2017, the state reduced its contribution to public schools from 50 percent to 38 percent and thus the local taxpayer share increased from 50 percent to 57 percent during that same period.

Taxparency Texas reports that from 2008-2017, the state provided $339 less per student and $795 less per student when this amount is adjusted for inflation and enrollment growth. This equates to a 20 percent decrease from the state over this time period.

This silent state tax is indeed a “golden goose” for which you in effect have no representation for how the proceeds are spent.

It is time to demand that our elected officials become a part of the solution rather than just being a part of the 30-year-old problem. Our 3,200 Fredericksburg Independent School District students and the 5.3 million students in the state of Texas deserve better.