Texas House passes bill to move school funding from property to consumption taxes

The Texas House passed HB 297 by Rep. Andrew Murr (R-Junction) on Thursday, a bill that would eliminate the school maintenance and operation property tax, the biggest portion of Texans' property tax bills, starting in January 2022.

Murr described the bill as the start of a meaningful conversation about the feasibility of replacing property tax revenue with sales tax revenue as a main source of funding for schools that promise to eliminate the school property tax in three years.

The bill would eliminate the school finance system that requires property-rich districts to subsidize property-poor districts—the "Robin Hood" system. It would create a 15-member interim committee of mostly lawmakers that would study and recommend which consumption taxes to increase to make up for the billions in property taxes in the two-year state budget cycle. The committee would work in the interim and make recommendations prior to the next legislative session.

Murr accepted a floor amendment that assures schools they would receive the same amount of funding as they do now.

The House approved the bill, 95-46, advancing it to the Senate.

Contact Jeff Huffman, Texas Credit Union Association, at 469-385-6488 or jhuffman@txcua.coop for more information.