Senator Eliot Shapleigh - El Paso, Texas

House Speaker Tom Craddick

AUSTIN – House Speaker Tom Craddick said Tuesday that a state property tax for schools is the only surefire way to end "Robin Hood" sharing of local property tax revenues and finally get the state out of court over school finance.

In statements that mirror the views of Lt. Gov. David Dewhurst and Senate leaders, Mr. Craddick said creation of a state property tax – replacing the current local property tax – is under consideration by House leaders as they craft a plan to overhaul the school funding system.

But he acknowledged there could be trouble coming up with the 100 votes needed to pass a state property tax in the House – the change would require a constitutional amendment and thus a two-thirds vote in both the House and Senate, plus voter approval in a statewide election.

Senate leaders have embraced a state property tax as part of their plan to overhaul the $30 billion-a-year school finance system.

Noting that a state property tax is "on the table," Mr. Craddick said, "I believe most members realize that to do away with Robin Hood and solve the problem permanently, you've got to go to something like that."

The Republican speaker said there is particular opposition to a state property tax in rural areas, where communities regard the setting of property tax rates as a local-control issue.

But he said that opposition could soften if the school finance bill proposed in the House drops the current maximum school property tax rate of $1.50 per $100 valuation to $1 and caps it statutorily at the figure – as a state rather than local property tax.

"That may help us with a state property tax," he said. "If you bring the dollar amount down low enough and cap it, that would be fine."

The current $1.50 maximum tax rate applies to school district operating expenses. Districts may levy up to 50 cents more to pay off construction bonds approved by local voters.

Mr. Craddick said a "shell" school finance bill and companion education reform bill could be filed as early as Thursday, when he is expected to name House committees for the session. That would allow committees to start hearings on the bills as early as next week.

Leaders want to propose legislation that would need only a simple majority, or 76 votes, in the 150-member House, he said.

The speaker also reiterated that the House funding bill will include a broad-based business tax as part of a mix of new taxes needed to offset property tax cuts and increase funding for education. There is strong support in the chamber for a payroll tax similar to what House leaders considered last year.

Also under consideration are increases in the state sales and motor vehicle sales taxes.

Senate leaders also have embraced an expanded business tax, although their proposal calls for revamping the business franchise tax so that it is paid by all businesses in the state except sole proprietorships.

Under the Senate plan, a new state property tax set at $1 per $100 valuation would be used to fund schools, eliminating property wealth disparities among districts that have kept the state in court for several years.