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Friday, April 10, 1998

Report: Nearly half school districts raised tax rates

AUSTIN (AP) -- Gov. George W. Bush remains committed to increasing the state's share of public school costs, his office said in the wake of a newspaper report that found many school districts had raised property tax rates.

The Houston Chronicle reported Thursday that Bush's property tax break, which saved the average homeowner about $140 last year, wound up being partially offset when more than four of every 10 school districts raised tax rates in 1997.

A draft report by the state comptroller's office indicates that 454 school districts -- 44 percent of the total -- raised their property tax rates.

School officials told the Chronicle the increases were needed to cover the cost of growing numbers of students and inadequate state aid.

Statewide, school taxes grew roughly 5 percent from 1996 to 1997 compared to 6 percent growth the previous year, according to the draft report. The growth is computed by applying tax rates to changes in property values.

Property tax collections actually dropped in nine Harris County school districts, thanks partly to the higher homestead exemption that lawmakers approved at Bush's urging after they had watered down his original tax relief plan, the newspaper reported.

The Legislature increased the homestead exemption by $10,000, which in Houston meant a jump from $25,000 to $35,000 for most HISD homeowners and an exemption of $45,000 for senior citizens.

Harris County Chief Appraiser Jim Robinson called the exemption "a significant piece of tax relief."

The Legislature increased state aid to school districts by $1 billion to cover the local tax revenue they lost from the higher exemptions. But some school officials contend the extra state money didn't completely cover their losses.

David Dunn, head of governmental relations for the Texas Association of School Boards, said other districts also had to raise tax rates to cover growth and to expand programs despite additional state aid.

In 1996, more districts, 539, raised tax rates.

According to the comptroller's study, school taxes totaled almost $10.4 billion in 1997, a $499 million increase over 1996.

Robinson said a comparison of taxable property values indicates the $10,000 the Legislature added to the homestead exemption was partly responsible for limiting the growth in tax revenue in the Houston Independent School District, the state's largest, to only 1 percent between 1996 and 1997.

Dallas ISD's taxes increased by 6.7 percent, and Austin ISD's jumped 11 percent. Fort Worth ISD saw a 1.6 percent reduction and El Paso ISD had a 5.4 percent drop.

The average tax rate rose 1.7 cents to $1.40 per $100 valuation.

"Local school boards have to make their own decisions," said Bush spokeswoman Karen Hughes.

However, she said, "The state is paying more for the cost of public schools today than when Gov. Bush was elected."

The state's share, she said, has risen from 44 percent to 49 percent during Bush's first three years in office.

"Long-term, the answer for this problem is for the state to continue to become the prime source of funding for our public schools. The state should pay the majority of the costs, and we're moving in that direction."