In many places across the country, school budgets are drawn directly from property tax revenue. That is the case in Texas, where a current property tax relief bill is on the table. Presently, Senate Bill 1 is a hot topic of discussion. It was passed quickly by a recent legislative session after being added to the agenda by Texas Governor Greg Abbott. The goal is to provide property tax relief to homeowners across the state of Texas by increasing the homestead exemption from $25,000 to $40,000.
Although the bill still needs to be approved by voters, it may be written into law if it receives a majority vote in May.
Why Are Residents Concerned?
Many voters have paid close attention to where their property tax dollars are going. In doing so, they have realized their property tax revenue is directly tied to the quality of the school system. Parents now have concerns about the quality of education their children receive in the state of Texas. Some are even worried that the quality of their children’s education could suffer if property tax revenues are dropped. Members of the Texas legislature have reassured parents and homeowners, that school budgets will not be impacted if property tax revenue drops.
The School Funding Will Be Replaced by Surplus State Funds
Members of the Texas state legislature have stated that the drop in school funding from property tax revenue will be replaced by surplus funds during the first year. So far, the state has indicated that it will take $2 billion in surplus funds and use that to keep school budgets where they currently are.
Legislators have also suggested that, as long as the state maintains a conservative approach regarding budget setting, there should be enough surplus money to cover school maintenance and operation expenses in the future.
Texas School Districts Address Budget Concerns
So far, local school district officials have stated that the change in property tax levels does not worry them when it comes to balancing the budget. They maintain that the state has an adequate plan to produce a balanced education for every child while making up for potential property tax revenue losses.
School districts have also taken a conservative approach to fiscal management, making the most of their limited resources. Therefore, even if SB 1 ultimately gets written into law, school districts believe they can keep the budget balanced.