Bill Caption

Relating to the elimination of school district maintenance and operations ad valorem taxes and the creation of a joint interim committee on the elimination of those taxes.

Fiscal Notes

Estimated two-year net impact to general revenue related funds for HB 59, Committee Report 1st House, substituted: an impact of $0 through the biennium ending August 31,2023.

However, there would be a negative impact of ($62,004,766,740) through the biennium ending August 31, 2025.

The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill.

Bill Analysis

HB 59 would prohibit school districts from imposing maintenance & operations taxes beginning in 2024 and would establish a Joint Interim Committee on the Elimination of School District Maintenance and Operations Ad Valorem Taxes to evaluate using consumption tax revenue to meet the state's constitutional duty to fund public education.  The school districts would still be allowed to impose an enrichment tax at a rate not to exceed $0.17 per $100 of taxable property value in the district.

HB 59 would be including a requirement for the proposals of the report on the elimination of school district M&O property taxes to ensure that the total amount of state and local funds per weighted student provided to public schools for each school year is at least equal to the total amount of those funds for the 2022-2023 school year.

Vote Recommendation Notes

This bill would reduce the property tax burden on Texans by abolishing the authority school districts have in imposing the maintenance and operations tax, but would not restrict school district's ability to collect an enrichment tax.

Any property tax reductions compensated for by a consumption tax should be permanent and meaningful; a solution which this bill would achieve. A consumption based tax would offer a more broad based, efficient system of taxation as opposed to the current property tax system which includes numerous exemptions for various classes of taxpayers. 

Texas Action supports HB 59 and the elimination of the Maintenance and Operations tax but would urge legislators to amend this bill to clarify the term "consumption tax" to strictly mean a sales tax applicable only to items that are bought and sold.