State Rep. Donna Howard had no idea Gov. Greg Abbott was going to name drop her in his first ever State of the State speech Tuesday.
The newly-minted Republican governor called on several lawmakers by name in his 45-minute address, including the outspoken Austin Democrat when he noted that his budget proposal “includes an appropriation that makes school districts whole for any tax revenue they may lose” under the $4.2 billion in tax cuts it also calls for, including $2.2 billion to school property taxes.
Howard, who said she had no prior discussion with Abbott on the topic, noted that it was not entirely clear — in either Abbott’s remarks or his budget proposal unveiled Tuesday — whether he thinks the state should let local school districts keep property tax revenue growth (projected at about $4.5 billion for 2016-17 biennium) or if he was saying simply that the state should make up for any of that revenue it takes away, although she suspects the latter.
“If he is saying he wants it to go back into education, then I’m all for that,” said Howard, who serves on a budget subcommittee handling public education funding.
Howard, a former Eanes school district board member, and state Sen. Kirk Watson, D-Austin, have harped on the fact that as local property tax collections soar, the amount the state must pay into public education diminishes. House and Senate first-draft budgets handle the issue differently with the House spending plan letting school districts keep a lot of that and the Senate instead returning it to taxpayers in the form of property tax cuts. As a result, the House spends about $2 billion more on public schools, although it hasn’t specified how to use that sum.
“I do appreciate the fact that he publicly acknowledged and recognized that property value increases are currently just offsetting what the state owes and that the state has been taking those funds … and using them in whatever way the state chooses to and not necessarily using it for public education,” Howard told the American-Statesman. “We need to correct that.”
After offering his assurance to Howard, Abbott immediately said: “But the property tax reduction must be lasting. We cannot allow it to evaporate with rising property valuations.” That is largely what happened after state lawmakers cut school property taxes in 2006 by $7 billion, which meant most property owners did not really notice it although tax bills likely would be much higher now if not for it.
The business franchise tax expansion passed to make up for that massive cut also has never fully made up for the lost revenue.
Howard said she has trouble imagining how things could go any differently this time around, although she conceded the devil is in the details, which are often sparse in Abbott’s proposed two-year spending plan.
On Tuesday, Abbott “talked about holding the schools harmless,” Howard said. “That’s exactly what we said then when we did the property tax swap and we did not uphold our end of the bargain then. I don’t know why I believe we would be holding up our end of the bargain with a new proposition like this.”
“The way I would address it is: Let’s go ahead and put more state money in and really hold them harmless so we’re really not taking as much from the local property owners,” she said.