Working to pay for Texas schools

By RICK PERRY and JOHN SHARP

Special to the Bryan-College Station Eagle

December 8, 2005

The recent Texas Supreme Court ruling on school finance sets the stage for the Legislature to act. In declaring Texas has an unconstitutional state property tax, but affirming we have a constitutional funding system, the court recognized that the way we raise revenue to pay for education is broken.

Of course, it didn't take a Supreme Court decision to confirm this in the minds of most Texans. They have seen their property taxes rise consistently for more than a decade, despite a record $2 billion tax cut passed in 1999 that was subsequently swallowed up by rising appraisals and locally raised rates.

For property-tax payers, the court's decision means that some of the burden will be lifted. For all taxpayers, the decision also means we now have the impetus to create a new tax model that is more balanced, modern and broad-based and that adapts to the changing economy.

And for our children, there is cause for optimism and hope - not only because Texas children are among the cream of the crop nationally when it comes to rising reading and math scores - but because the education funding debate will not be about how much we spend to the detriment of a good discussion about how we spend it.

The good news on the funding side is this: Whereas most schools today have reached their capacity in generating local dollars, a new system that replaces local dollars with state revenues - if done with thoughtful regard to our economy and the engine of growth, which is job creation - can better keep up with growth.

Even a tax system that involves a revenue-neutral tax swap can place our schools on firmer footing than our current system, which not only has reached the property tax ceiling, but allows too many businesses to escape paying the franchise tax.

Showing uncommon judicial restraint when compared with their colleagues across the nation, the justices also acknowledged that the responsibility for resolving both the school funding and tax reform challenge rests with the Legislature, not the courts.

Like most Texans, we believe that point to be of particular significance. In fact, that is why, even before the court ruled, we joined together to establish the Texas Tax Reform Commission, a group of 24 private sector experts who are developing recommendations for lawmakers to consider as Texas designs a new tax system.

The idea behind the Tax Reform Commission is simple: After the best efforts of the Legislature did not yield a school finance agreement earlier this year, a new approach is needed that will bring a fresh perspective to the debate and give Texas residents a greater opportunity to make their voices heard. Over the next several months, the commission will hold public hearings across the state as members develop proposals to modernize our tax system, lower property taxes and ensure a reliable source of revenue for schools.

Until Texas ends its over-reliance on property taxes and until the numerous and gaping loopholes in the business tax structure are closed, public schools will not have the stable, long-term revenue source that is essential to improving classroom performance.

And until property taxes are significantly and permanently reduced, thousands of Texans will be denied the opportunity to fully participate in the American dream simply because they can't afford the tax bill associated with owning their own homes.

With the Tax Reform Commission, Texas can now harness the expertise of the leaders of the state's diverse and thriving private sector to help resolve this great challenge. The members of the commission represent different segments of the economy, political parties and regions - but they are all proven consensus builders with a tremendous amount of experience in developing real solutions to tough problems. The Tax Reform Commission will play an essential role in the effort to craft a bipartisan revenue plan not only because members bring new talent and ideas to the table, but also because it provides a new seat at the table for the people of Texas.

We believe that the mission of reforming the way Texas pays for education is one that transcends politics because at stake in this debate is the very future of Texas. That's why two long-time rivals could put aside past contests to work in common cause.

We hope legislators will do the same, approaching this issue on common ground rather than divided territory. Though the school finance challenge is great, we believe that there is nothing Texas cannot accomplish when leaders leave past disputes in the past and come together to do what's right for the people of this state.

&8226;Gov. Rick Perry, a Republican, established the Texas Tax Reform Commission in September and appointed John Sharp, former Texas comptroller and a Democrat, to chair the effort.