Opinion ID: 1723051
Heading Depth: 2
Heading Rank: 2

Heading: The $1.50 cap

Text: The property-poor districts also point out that the $600 gap will become much greater to the extent that districts are allowed to tax at effective rates above $1.50. Because the State provides no Tier 2 funds at rates in excess of $1.50, any revenues generated from such higher rates (referred to as Tier 3) are completely unequalized. The wealthier districts, drawing on tax bases of up to $280,000 per student, are able to generate as much as $28.00 per student with every one-cent tax increase, but the poorer districts, drawing on tax bases as low as $9,500 per student, are able to generate as little as $0.95 per student with the same tax increase. Section 20.09 limits the circumstances in which a district can impose a total tax rate that exceeds $1.50: Except as provided by subsections (c) and (d) and unless specifically approved in an election called for that purpose, a school district may not impose a total tax rate on the $100 valuation of taxable property that exceeds $1.50. TEX.EDUC.CODE § 20.09(a) (emphasis added). Subsection (c) of section 20.09 allows a district to exceed the $1.50 limit for the purpose of collecting taxes pledged and levied to pay the principal of and interest on old debt, that is, debt authorized before April 1, 1991, and issued before September 1, 1992. Subsection (d) creates a similar exception for new debt, subject to some restrictions. [13] The property-poor districts argue that the language in section 20.09 italicized above, which was added by an amendment during floor debate on Senate Bill 7 in the House of Representatives, allows a district to exceed a $1.50 total tax rate for any purpose whenever such a rate is approved by the district's voters in an election called for that purpose. Because this option would give property-rich districts much greater access to revenue for maintenance and operations purposes than property-poor districts would have at similar rates, the property-poor districts argue that the amendment makes the financing system inefficient. First of all, we disagree with the property-poor districts' interpretation of section 20.09. Under section 20.04(d), a district's authority to levy maintenance and operations taxes is generally capped at a rate of $1.50. The amendment to section 20.09 did not affect the independent limitation on maintenance and operations rates imposed by section 20.04(d). Furthermore, even under the property-poor districts' construction of section 20.09, Senate Bill 7 would not be rendered inefficient. It is within the Legislature's power to establish tax rate caps even though such caps are not constitutionally required. As long as efficiency is maintained, it is not unconstitutional for districts to supplement their programs with local funds, even if such funds are unmatched by state dollars and even if such funds are not subject to statewide recapture. We caution, however, that the amount of supplementation in the system cannot become so great that it, in effect, destroys the efficiency of the entire system. The danger is that what the Legislature today considers to be supplementation may tomorrow become necessary to satisfy the constitutional mandate for a general diffusion of knowledge. [14] There are, in fact, a number of Texas Education Code Auxiliary Laws [15] that presently permit some districts to levy a maintenance and operations tax in excess of $1.50. In particular, article 2784g permits districts in counties with a population exceeding 700,000 to set a maintenance and operations tax rate of up to $2.00. [16] TEX.EDUC.CODE AUX.LAWS art. 2784g [Act of May 14, 1953, 53rd Leg., R.S., ch. 273, 1953 Tex.Gen.Laws 710, amended by Act of February 12, 1959, 56th Leg., R.S., ch. 7, 1959 Tex.Gen.Laws 14]. These laws pose no threat to the constitutionality of Senate Bill 7. Once all districts are provided with sufficient revenue to satisfy the requirement of a general diffusion of knowledge, allowing districts to tax at a rate in excess of $1.50 creates no constitutional issue. Districts that choose to tax themselves at a higher rate under these laws are, under this record, simply supplementing an already efficient system.