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The State Senate Property Tax Committee held its first hearing Wednesday on a property tax reform bill.
The bill would cap how much property tax revenue larger cities, counties and school districts could collect.
Several North Texas school district officials said they're hopeful for school finance, but also wanted to give homeowners a break.
The Texas State Senate Property Tax Committee held its first hearing on Senate Bill 2 on Wednesday. It would cap how much property tax revenue larger cities, counties and school districts could collect.
If those entities wanted more than 2.5 percent in revenue over the previous year on existing property, voters would have to weigh in. A companion bill was filed in the Texas House, as lawmakers announced property tax reform is a priority during this year's legislative session.
The Texas Municipal League warned a cap on property tax revenues would have unintended consequences, leading to cuts in public safety services. Cities like Frisco told NBC 5 on Monday a cap would offer a modest property tax decrease for homeowners, but cost a city budget millions.
Frisco officials said a cap would save a homeowner with a home value of $453,842 around $67. The city said a 10 percent homestead exemption, approved by the city council last year, would save the same homeowner $203.
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Wednesday, NBC 5 reached out to local schools. Many agreed a cap that no property tax or school finance reform would have dire consequences. But district officials have also said they're hopeful lawmakers would file additional legislation to reform the state's school finance system while also giving homeowners a break.
"We, each and every year, see a 10, 12, 13 percent increase in our property taxes here in Wylie. It's basically taking a lot of our families to the point of saying, 'Can I live here?'" Wylie ISD superintendent Dr. David Vinson said.
Vinson said he's watching developments in Austin closely this legislative session, waiting for details on how the legislation would be implemented so he could run his own numbers. He said he was optimistic lawmakers would keep their promise to file additional legislation on school finance reform, to help schools make up any funds they would lose in a property tax revenue cap.
"We have a significant dependence on property taxes in Texas," Vinson said. "So how do we get out of that logically, collectively and then work towards a solution to meet the needs of all the tens of thousands of kids that are moving to Texas every year?"
Estimating exactly how much a cap would impact school budgets is difficult to assess until more details about lawmakers plans are known, say school districts NBC 5 spoke with. But most estimated the property tax increase revenue stream would have a substantial impact.
"A large school district like Fort Worth would lose tens of millions of dollars in the event there were a strict cap," Fort Worth ISD superintendent Dr. Ken Scribner said.
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Scribner said that would mean fewer teachers and larger classes unless lawmakers reform school finance, finding another way to make up the money at a time when state funding has steadily decreased.
"Years ago the state's portion of investment in our schools was 60 percent and the local was 40," Scribner said. "That has fallen to 36 percent from the state and the rest being made up at the local level. In Fort Worth, our local taxpayers paid 51 percent two years ago, 56 percent last year and it's over 60 percent today."
"We believe there should be a fair share, both at the state level and the local level," he added.
Plano ISD school board president Missy Bender told NBC 5, she's felt more optimistic during this year's legislative session and she believed lawmakers were prepared to reform the school finance system.
"I think this session, the stakeholders that care about education are really engaged and want to see state investment in education," Bender said. "Public opinion is driving this, so I'm optimistic that we will make progress."
She said meaningful reform would happen once lawmakers identified a new revenue stream to fund schools. A stream that would be sustainable even if the economy slowed.