Senator Eliot Shapleigh - El Paso, Texas

AUSTIN — Lawmakers trying to decide whether to exceed the state spending cap to pay for school tax relief say the tax break is coming whatever they do.

By law, local taxes and the dollars they generate will drop, adding to the pressure on the Legislature to replace the money with state revenue.

It leaves few alternatives to exceeding the cap. Lawmakers could carve billions of dollars from other programs to send to schools, take a tough vote to reduce the amount of promised local tax relief or allow education spending to fall.

Rep. John Otto, a Dayton Republican who played a key role in last year's school-funding revamp that cut local property tax rates, raised the dilemma recently in a panel presentation to the Texas Association of Business. He made it clear that he'll vote to make sure school districts get the money they need from the state to make up the difference.

Funding for schools

"If you don't vote to spend this money, you're going to go back home and explain and face all the parents when your school doesn't get the check from the state to replace what they just lowered in property taxes," he said.

"I don't want to be that representative that made that vote."

Lawmakers are bumping into the spending cap because promised school property tax relief will cost the state $14.2 billion over the next two years. That's the price of replacing dollars otherwise derived from local taxes.

Spending to subsidize property-tax relief counts against the constitutional cap, which ties certain state spending to the rate of economic growth, just like other spending. Tax-relief spending alone would put lawmakers about $4 billion over the cap, before increases to cover school enrollment growth or anything else

Senate Finance Committee Chairman Steve Ogden, R-Bryan, said he doesn't think there is any way lawmakers will short schools and that he hated to even bring up the prospect.

"The law mandates that the (local tax) rates go down. There is an assumption, as far as I know, but not necessarily a mandate to replace that lost revenue dollar for dollar," he said.

"I can't imagine the Senate (shorting schools). I think it would be more likely that we'd just lock down and go to special session," he said.

Eye on funding

Sen. Dan Patrick, R-Houston, said he would vote against breaking the spending cap. But he said he would allow voters to decide the issue if lawmakers also put on the ballot a constitutional amendment to more tightly cap property appraisal increases, a key factor in property tax bills.

Asked about the latest twist in the argument for breaking the cap, Patrick said, "I think that this new wrinkle once again proves that the legislation that was passed last year was done hastily and without full thought of its total ramifications on the budget, schools and homeowners."

He said he would prefer to cut spending, even if it means a smaller immediate tax reduction.

Sen. Leticia Van de Putte, D-San Antonio, said the question goes straight to the Legislature's commitment to fund public schools.

"And I think that's why some folks are uneasy, because the Legislature hasn't always lived up to its commitment," she said.

School groups said they are watching but think lawmakers will come through with funding. It would be "catastrophic" if they don't, said Jacqueline Lain, associate executive director for governmental relations for the Texas Association of School Boards.

Executive Director Wayne Pierce of the Equity Center, which includes low- and medium-wealth school districts, said, "I cannot imagine any scenario in which the Legislature would cut funding for public education."