Texas House bill would put $9 billion into school finance reform and property tax relief

State Rep. Dan Huberty is expected to unveil a $9 billion school finance reform bill Tuesday that will send more state money to public schools and lower school property tax rates, according to a summary of the proposal obtained by The Texas Tribune and conversations with lawmakers briefed on the legislation.

Details of the long-awaited legislative plan aimed at addressing this year’s top legislative priorities circulated the Texas Capitol on Monday, the day before House leaders are set to unveil House Bill 3, which has been dubbed “The Texas Plan.”

Huberty, a Houston Republican who chairs the House Public Education Committee, is proposing that $9 billion would go toward increasing the base funding for each student and compressing school districts’ property tax rates by 4 cents statewide, among other policy items. The bill would also help districts fund free full-day pre-K for eligible students, and send more money to school districts with higher concentrations of disadvantaged students.

Huberty briefed members of the House GOP and Democratic caucuses on his plan in separate meetings Monday. Huberty declined to comment on the bill Monday. He and House Speaker Dennis Bonnen, R-Angleton, are set to hold a Tuesday news conference with other House members at the Capitol to publicly lay out the proposal.

According to the summary, the bill would increase the base funding per student by $890 to $6,030 — the first time that allotment has been raised in four years. It would also lower school district property tax rates statewide by 4 cents per $100 of taxable property value, helping to reduce so-called Robin Hood payments that redistribute money from wealthier districts to poorer ones. The compression could save the owner of a home with $250,000 in taxable value about $100 annually in school district taxes.

That method of property tax relief is different than one proposed by Gov. Greg Abbott last year, which would cap annual increases in school districts' tax revenues at 2.5 percent.

The description of HB 3 the Tribune obtained also does not appear to include mandatory across-the-board raises for teachers, a priority for Republican Lt. Gov. Dan Patrick. Senate Bill 3, which would give all full-time classroom teachers and certified librarians a $5,000 pay raise, sailed through the upper chamber on Monday, but it will likely face an uphill battle in the House. Bonnen, who presides over the lower chamber, has said he prefers giving local districts the flexibility to use increased funding for teacher pay as they see fit. The House proposal is expected to provide districts with $140 million to help recruit and retain teachers.

The bill covers three priorities — teacher pay, property tax reform and school finance reform — that Abbott named “emergency items” in his State of the State address last month, meaning state lawmakers can move faster to pass them.

To be clear, Huberty’s proposal, once filed, will be a starting point on a complex issue that’s expected to draw debate among members from both sides of the political aisle. A number of members have already expressed concerns about how Huberty’s proposal would affect the equitable distribution of funding among wealthier and poorer school districts. Some have privately suggested that a less equitable school finance system could open the door to lawsuits against the state.

Beyond that, the House Democratic Caucus has already laid out its own markers on the issue. Last month, the minority party announced a host of policy proposals in its $14.5 billion plan to improve school finance and provide property tax relief. The plan called for funding full-day pre-K, but did not include a statewide compression of property tax rates for school districts, as expected in HB 3. Instead, Democrats proposed doubling the amount homeowners could see exempted on their home.

Democrats’ proposal drew pushback from Bonnen, who said “partisan politics” has prevented state lawmakers from passing meaningful school finance reform in past legislative sessions.

“We’re going to do this as the Texas House,” Bonnen told reporters in Austin after Democrats unveiled their proposal. “The best plan is the plan that works for Texas,” Bonnen said.