[NOTE: Henson multitasking led to an error in a previously published headline on this piece. It's been fixed - h/t Aliyya Swaby for the quick catch.]
We prevously looked at the HB3 runs as that bill was debated on the House floor about a month ago, and now the House Ways and Means Committee has released a new set of district runs that reflect the movement of HJR 3 and HB 4621 out of the House Ways and Means committee Wednesday, which seek to implement a tax swap plan in which a 1 penny increase in the sales tax rate will be used to pay for property tax reduction in the overall school finance plan. As with the House version last month, we've again made the new runs released by the House committee available in a spreadsheets for 2020 and 2021 via Google Drive, should you want to interact with the data yourself. All the caveats we made in the last piece still apply:
We have taken (only) a brief look at the impact of the current school finance bill on Texas' ISDs in 2020 (excluding charter school districts) as it stands before debate and likely amendment. (We haven't delved into equity and have not appended important information about school district demographics that might be useful for assessing whether districts with higher concentrations of low-income, or English as a second language, students are receiving equitable funding compared to districts with lower proportions of those same students. Nor do we consider expected changes in the enrollment numbers used to produce these runs, e.g. decreasing enrollment in Austin ISD and increasing enrollment in Round Rock ISD. Consider what is below somewhere beyond a hot take and well short of a full policy analysis. We're only looking at the 2020 numbers, knowing full well that things will change on Wednesday during debate, not to mention once the bill is addressed by the Senate, but we wanted to make the material is available for the debate.)
It's also worth adding that our HB3 comparison points are from the runs produced the day before the floor debate – so this can't speak to any amendments that changed the central tendencies of these projections.
The Senate has also moved ahead with its modifications, amidst complaints from Republicans including Senator Paul Bettencourt that there's still no agreement on how to pay for it (per Aliyya Swaby's reporting in the Texas Tribune), following other complaints about the impact of the Senate changes on Senators' districts (Swaby singles out Senator Angela Paxton, who joined Bettencourt as registering present but not voting). These moves are well descibed in the Swaby story as well as a good recap in the Dallas Morning News by Rebekah Allen. There are still differences bewteen the House and Senate bills, particularly on teacher pay, but both authors seem intent on just getting to conference committee, as House Education Committee chair Huberty told Allen in the DMN.
Here are a few empirical observations:
The Mean M&O Tax Rate: Under current law, the mean M&O tax rate is $1.10, with a median of $1.08. Under HB3, in 2020 and 2021, the average M&O tax rate would drop to $1.04; while under HB3 + HJR3, the average rate would drop to $0.94 in 2020 and $0.89 in 2021. While the maximum rate under HB3 would drop from $1.24 to $1.17 in both 2020 and 2021, under HB3 + HJR3, it would drop to $1.07 in 2020 and $1.01 in 2021.
Recapture: Under current law, Austin ISD, Houston ISD, Plano ISD, Dallas ISD, and Eanes ISD pay the most in recapture payments, but would see significant reductions under both HB3 and HB3 + HJR3. Austin ISD, for example, which is expected to pay $781,645,840 in recapture payments under current law, would see that drop to $587,532,657 under HB3 in 2020, but increase in 2021 to $672,089,562. Under HB3 + HJR3, Austin ISD's recapture payments would drop to $459,316,333 in 2020 and further still to $458,571,167 in 2021. If these runs are correct, Houston ISD would be a big beneficiary, with no recapture payments under HB3 + HJR3.
|Current Law Recapture||HB3 Recapture||HB3 + HJR3 Recapture||Current Law Recapture||HB3 Recapture||HB3 + HJR3 Recapture|
Change in M&O Revenue Per ADA: Under current law, the total M&O Revenue per ADA averages $10,917.98 in 2020 and $11,041.15 in 2021. Under HB3, that average would increase to $11,966.89 in 2020 and $11,937.06 in 2021. Under HB3 + HJR3, total M&O Revenue per ADA would increase to $12,092.67 on average in 2020 and $12,163.27 in 2021. The average change in Revenue per ADA under HB3 in 2020 is $1,048.91 and 895.90 in 2021. Under HB3 + HJR3, the average change in revenue per ADA in 2020 would be $1,175.33 is 2020 and $1,114.42 in 2021.
|"Rainy Day Fund"||58%|
|Increase alcoholic beverage tax||57%|
|Reduce tax exemptions for business||48%|
|Increase the motor fuel tax||17%|
|Create a statewide income tax||16%|
|Increase the state sales tax||16%|
|"Rainy Day Fund"||71%||45%||50%|
|Increase alcoholic beverage tax||65%||45%||52%|
|Reduce tax exemptions for business||61%||54%||37%|
|Increase the motor fuel tax||26%||13%||11%|
|Create a statewide income tax||28%||11%||6%|
|Increase the state sales tax||21%||14%||12%|