What's new . . .
The Fourth Called Session of the Texas Legislature ended two days early, on May 17, without finally passing any legislation. This lack of consensus is very disappointing to me. I felt we should have reworked the school finance system during the 2003 regular session and several of us urged the Governor to call a special session on education last year rather than waiting until this year.
The problems have been apparent for some time: an increasing number of school districts have reached the property tax limit for supporting their schools, property tax appraisals and rates continue to increase at an alarming rate, and many property-wealthy school districts that share their tax revenue with less-wealthy districts under the Robin Hood school funding system are now sending so much of their local revenues to other districts that they are having difficulty operating their schools. In fact, a court suit will be heard later this summer that was filed by a group of school districts who argue that the current school funding system is unconstitutional. I believe it is the Legislature's responsibility to act now, not wait for a court order.
Legislators and legislative leaders agree that the state must contribute more revenue to the school finance system, local property taxes must be reduced, and that the Robin Hood funding system needs an overhaul. There is also commitment to maintaining an equitable school finance system and focusing on educational excellence standards. However, there is no consensus on how to fund a new system at the state level.
The Governor started the session by revealing his plan which was funded by video lottery terminals, a split roll tax, sales tax increases, and a cigarette tax. It also included education performance incentives. The House of Representatives spent the first two weeks of the special session holding hearings on the Governor's plan and then came up with its own plan. The bill presented to the full House received its funding primarily from gambling and a new business payroll tax and included education performance incentives. When the Governor announced his opposition to the payroll tax on the eve of the House vote, the House defeated the payroll tax and went on to vote down the video lottery gambling proposal as well. While the Texas Constitution requires that revenue measures originate in the Texas House, the bill sent to the Senate included very little revenue.
The Senate spent the next week-and-a-half holding hearings and debating its own version of the legislation. The Senate proposal included an educational excellence component and the revenue source focused on modifying the current business franchise tax by closing the loopholes and expanding it to all businesses. When it became clear that there was no agreement among the House, Senate, and Governor on a method of funding the education system rewrite, the special session was gaveled to a close.
On May 19, the Lieutenant Governor and House Speaker announced the appointment of 12 Senators and 12 House members to serve on two Joint Working Groups on School Finance Reform. Their purpose is to reach a consensus on school finance reform, at which point, the Governor will call the Legislature back to Austin. I hope the next time you hear from me it will be to outline the new school finance bill passed in the Fifth Called Session of the Texas Legislature.
Focus . . .
Tax Reduction Scams
Have you ever received a letter in the mail similar to the following: "I will provide information and/or services to you in an attempt to help you recover money from one or more public agencies within the state of Texas. It is money that is refundable only by proper and timely application. After receipt of this signed agreement, I will send all of the necessary information and documents to you. Only if you apply for your refund, with or without my further assistance, and the monies are received, will my fee of 50% be due and payable." Over the past few years there have been other similar letters. These companies promise they will assist you in obtaining an amount of money that you are entitled to. Even though every fraud letter may be worded differently, the majority of the letters are speaking of refunds that you are eligible for from filing your homestead exemption. Once you sign their form and mail it back to the company, they will then mail you a homestead exemption application (you can get this application yourself for free) to sign and mail to your local appraisal district office. The company then expects you to pay their service fee for assisting you. These companies have not only targeted seniors, but homeowners of all ages.
Our Texas Attorney General, Greg Abbott, is doing his part in trying to do away with these scam-like companies. He has filed lawsuits against a handful of these companies in an attempt to close their doors. The Texas Association of Realtors has also been proactive in educating their realtor members about these fraud cases and asking the members to verify that all their recent clients have filed for an exemption.
Any homeowner can apply for a homestead exemption on a primary place of residence and it is absolutely free. If you are a property owner and want to verify that you have filed for your exemption, contact your local appraisal district office. The contact and other general information for the Dallas Central Appraisal District can be found at www.dcad.org. If you have not filed for an exemption, you can print out a copy of the application by going to www.window.state.tx.us/taxinfo/taxforms/50-114.pdf.
Legislation has passed during the last two sessions that addressed these fraud issues. Senate Bill 141 (77th Legislature-2001) required companies to state on their advertisements, "This document is an advertisement of services. It is not an official document of the State of Texas." Senate Bill 853 (78th Legislature-2003) required the company to disclose the name of the governmental body from which the resident will be receiving a refund. Even though these two measures have assisted in decreasing the number of fraud cases, more needs to be done. At this point, I am researching different avenues on how to bring this type of fraud to an end.
The rule of thumb is to be aware of any solicitation that involves a fee to apply or register for a tax reduction, freeze, ceiling, or deferment. If you ever receive similar letters in the mail and you want to verify their authenticity, call the Consumer Protection Division within the Texas Attorney General's Office at (800) 621-0508.
To sign up and receive Senior Alerts from the Texas Attorney General's Office go to www.oag.state.tx.us/alerts/alerts_view.php?type=2. For Texans age 60+, you can receive free legal advice from the Attorney General's Office at 800-662-2520.
Did you know . . .?
The Legislative Budget Board offers a great public resource in their Texas Fact Book that can be found at www.lbb.state.tx.us/Fact_Book/Texas_Fact_Book_2004_1103.pdf. If you or your children need information for work or school about state holidays, how Texas ranks on a range of topics from education to agriculture, Texas governors, state symbols and more, this website offers useful and unusual facts and figures. The website also lists all of the helpful toll-free numbers to state agencies and services such as Crime Stoppers.
In closing . . . As always, if I or my staff can be of assistance to you, please do not hesitate to contact us.
Have a great Memorial Day holiday weekend.
State Senator - District 16