By Richard Lee
For the Fort Bend Star
Members of the Senate Finance Committee will vote on a final budget proposal to send to the full body this week, according to the panel’s chair.
Sen. Jane Nelson of Flower Mound told the 14 members of her committee following the adoption of workgroup recommendations Thursday that she expects to present a completed document for approval on Wednesday. Since mid-February, members have been working in smaller groups divided by budget article to develop recommendations based on agency requests and available revenue. After the votes to approve the individual workgroup products, all that remains is for the Legislative Budget Board to collate the document and make technical corrections.
Included in the approved recommendations is $9 billion in additional funding for public education, including $2.7 billion to provide property tax relief, the primary source of school funding in Texas. Another $2.3 billion will go to general education reform with the remaining $4 billion marked to provide a $5,000, across-the-board annual pay raise to every teacher in the state. Identified as the session’s top priorities by state leadership in January, workgroup and Education Committee chair Sen. Larry Taylor of Friendswood said this budget will make significant progress on education and tax reform.
“At the end of the day I know we are going to take very large steps to improve our education outcomes for our students while providing meaningful tax savings for our businesses and our homeowners, and we’re also going to improve the pay of our teachers,” he said.
On the floor this week, Houston Sen. Joan Huffman passed two key pieces of legislation. Monday, the Senate approved her plan, SB 12, to shore up the state’s struggling teacher pension fund. Her plan would increase contribution rates from active public school employees, gradually upping the amount withheld from their paychecks for the Teacher Retirement System from 7.7 percent to 8.25 percent by 2024. The state pays 6.8 percent of total public school employee payroll into the fund annually, that number would also rise to 8.25 percent by 2024. School districts would raise contributions from 1.5 percent of payroll to 2 percent. With $47 billion in unfunded liabilities, the Legislature has periodically had to pay general revenue into the fund to maintain solvency. That’s not very sensible, said Huffman.
“This is long-term planning showing fiscal responsibility,” she said. “This plan is far more cost efficient than simply attempting to contribute one-time infusions of cash every so often.”
Her bill would move the plan into fiscal soundness, cover unfunded liabilities, and also provide for a one-time bonus monthly annuity payment of $500 to beneficiaries sometime in the next biennium.
Huffman’s second major bill this week would strengthen reporting requirements for incidents of sexual assault on college campuses, and include penalties for employees who don’t abide by them. Huffman said that one in five women experience some form of sexual violence or harassment while in college. She believes that ensuring that all allegations of these offenses are reported and investigated will help survivors find justice.
SB 212 would require that any employee at a public or private institution of higher education who sees or has knowledge of an incident of sexual assault or harassment report it to the campus Title IX coordinator for investigation. It would require regular reports from the coordinator to the university president, and a report every semester from the president to the institution’s governing board about the number, disposition, and actions taken regarding these investigations. Violating these provisions would result in termination for employees and even legal action if the individual knowingly failed to report or intentionally tried to cover it up. Universities that aren’t in compliance could face a fine of up to $2 million.
Homestead exemption for property taxes
The Senate Property Tax Committee considered measures last week that would increase the homestead exemption for local school property taxpayers by $10,000. SB 5 and SJR 71 by Houston Sen. Paul Bettencourt would ask voters in November to approve an increase to the amount of property value that a homeowner can exempt from $25,000 to $35,000.
He said this will cut the average property tax bill in Texas by about $125 per year. The state would cover the loss in revenue to school districts by using proceeds from oil and gas production taxes that would otherwise have gone into the Economic Stabilization Fund (ESF). Bettencourt believes the rainy day fund has enough in it to justify the diversion.
“I personally view the ESF as full because we’re looking at values up to $15.66 billion at the end of the biennium without any withdrawals,” he said.
The Legislative Budget Board estimates the measure will cost the ESF $1.6 billion in tax revenue through the 2023 biennium.
Bettencourt said that this is just one of several bills intended to deliver meaningful property tax relief to homeowners. The increased exemption would save homeowners what Bettencourt estimated to be about $4,000 in taxes over the standard 30-year mortgage period. Because rising property taxes and values eat into any tax cuts, however, reforms that limit that growth must be a critical piece of this strategy, he said.
“The appraisal increases I’m hearing about are just astonishing, high single digits on homes in Harris County, all commercial property on average above 15 percent, every apartment over 25 percent…and that’s just one county,” said Bettencourt.
He said he’s heard similar stories from all of the state’s major urban counties. Among several other property tax measures, Bettencourt is the author of SB 2, which would limit the amount a taxing entity can hike property tax rates each year to 2.5 percent. Anything more than that would require voter approval.