Senator Carona's Email Update
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August 3, 2005

What's new . . .

The Texas Legislature is in the midst of another special session to address school finance and tax reform. Although many plans have been advanced during the first and second special sessions, to date, none have garnered the support necessary to finally pass them.

During the first special session of the 79th Legislature, both the House and Senate passed bills addressing school finance and tax reform, HB 2 and HB 3 respectively. The bills then went to conference committee, where the differences in each chamber's version were considered. The conference committee for HB 2 was able to reach an agreement in the final few days of the first special session. However, the bill was the victim of a filibuster on the Senate floor and died. The conference committee for HB 3 was unable to reach a compromise, and the bill did not make it back to either chamber to be voted on by the members. HB 3 failed because House and Senate conference committee members were unable to reach an agreement on the amount of property tax relief, sales tax increase, and the size and scope of any new business taxes.

One important bill that the Legislature did pass and send to the Governor during the first special session is HB 1. This measure reauthorizes the budget for the Texas Education Agency, which the Governor vetoed at the end of the 79th Regular Session. The bill provides funds for Texas' public schools to operate for the next two years. The Governor has until August 9 to sign HB 1 into law, allow it to become law without his signature, or veto it. The Governor has indicated he will sign the bill.

In addition to school finance and tax reform, the Legislature considered a short list of other issues in the first special session. Most of these other measures failed to finally pass because legislators agreed that the primary purposes of the special session--school finance and property tax reform--should pass first. Once school finance and property tax reform failed, the other bills were no longer pursued.

Following is a list of some of the other issues addressed during the first special session:

SB 20 would increase the state's renewable energy goals. Legislators felt it was important to enact this bill now since Texas has already met its renewable energy goals for 2009. SB 20 passed the House and Senate and has been signed by the Governor.

Following the U.S. Supreme Court's decision that local governments could exercise eminent domain to seize property for economic development, the Governor added that issue to the call for the first special session. Eminent domain is the ability of government to take private property for public use with just compensation. The Fifth Amendment to the U.S. Constitution provides that private property may be taken, with just compensation, as long as it is for public use. The Senate passed SB 62 which would have prohibited local governments from using eminent domain to acquire land for economic development. The House passed HJR 19, which would have allowed Texans to vote on a constitutional amendment making the same prohibition. With the House unwilling to consider anything less than a constitutional change, it took no action on SB 62 and the session ended without either piece of legislation passing. This issue is being considered in the second special session as SB 7.

HB 11 and SB 11 would have provided for a judicial pay raise to ensure that Texas is able to retain and attract the most qualified candidates for our judiciary. Unfortunately, this legislation would also increase the retirement benefits of legislators because the amount of retirement pay a legislator receives is linked to judicial salaries. While I strongly support a judicial pay raise, I oppose increasing legislator retirement pay. This legislation failed in the first special session, but is being considered again in the second special session as HB 11.

HB 6 would have allowed institutions of higher education to issue tuition revenue bonds for the construction of new facilities. Tuition revenue bonds are general revenue appropriations paid by the state to pay the debt service (principal and interest) on the construction bonds of the state's public colleges and universities. The funds have already been appropriated and this bill would have dictated which projects are funded. Although there were differences in the Senate and House versions of the bill, it did not make it to conference committee and failed in the first special session. It is being considered again in the second special session as HB 6.

SB 21 would have enacted many telecommunication reforms, including deregulating local phone service and allowing phone companies to provide cable television. This bill passed both the Senate and the House, but was not pursued once school finance and property tax reform failed to pass. This issue has been introduced in the second special session as SB 5 and HB 13.

Immediately following the end of the first special session on July 20, the Governor called the Legislature back for a second special session starting July 21, to address school finance and tax reform. The Governor later added judicial pay raises and telecommunications reform to the call.

At the beginning of the Second Called Session of the 79th Legislature, the House failed to pass its school finance, HB 2, and tax reform, HB 3, bills. Two days later, the Senate was unable to get enough votes to consider its education reform bill, SB 2. At that time, Senator Florence Shapiro (R-Plano) announced that she would file a new education reform bill, emphasizing that she would work with the education community in drafting the language. The new bill, SB 8, is now being considered in the Senate Education Committee. The bill provides for a property tax reduction, an average increase in educator salaries of $3000, and ensures that every school district receives a funding increase. Unlike previous education reform bills, SB 8 does not require schools to start after Labor Day or change school board elections from May to November. The full Senate is expected to debate SB 8 later this week or early next week.

Since all tax bills must originate in the House, the Senate cannot write its own tax reform bill. At this point, it is unclear whether or not the House will try and pass another tax bill and send it to the Senate. If the House does not pass another tax bill, the Legislature will not be able to enact significant school finance reform or property tax relief during this special session.

Focus. . .

One of the issues about which many constituents have contacted me is support for funding the state's purchase of textbooks. I certainly support funding new textbooks for our public school students and feel it is important to include such funding in the legislation passed during the special sessions.

The state's textbook adoption process is a lengthy one. Each year, the State Board of Education (SBOE) issues a proclamation calling for textbooks on the subjects in that year's cycle; most subject areas are on six to eight year cycles. The proclamation is named after the year in which it was issued. About a year after the proclamation has been issued, publishers submit the materials to the state for review. They are evaluated by textbook review panels for errors and their coverage of essential knowledge and skills. These books are then sent to the State Board of Education for adoption. The SBOE may place the books on the conforming list, meaning they cover each element of essential knowledge and skills and have no factual errors; the non-conforming list, meaning they cover at least half of the essential elements of knowledge and skills and have no factual errors; or reject the books. The state and school districts may purchase books from either the conforming or non-conforming list.

It usually takes about three years for a book to make it to a classroom once a proclamation has been issued. The textbooks that were submitted in response to Proclamation 2001 were received by the state in November of 2002. They then went through the review process and were adopted by the state in 2003. They went into classrooms for the 2004-05 school year.

Textbooks are funded from the Texas Permanent School Fund, an endowment established for the benefit of the public schools. The State Board of Education must authorize the use of this money, which it has already done for Proclamation 2002, but the Legislature must still appropriate the funds. As the Legislature wrestles with school finance, many proposals also address the textbook review, adoption, and distribution process. Changes to these steps in the process will affect the funding mechanism. For this reason, the Legislature has yet to appropriate the funds for this year's textbook procurement, Proclamation 2002. I fully expect that, either as part of a larger school finance reform bill or as dedicated textbook funding bill, these funds will be appropriated for the upcoming school year.

Did You Know. . . ?

Sales Tax Holiday
The annual sales tax holiday will be August 5-7. During the sales tax holiday, most clothing and footwear priced under $100 will be exempt from sales and use tax. The sales tax holiday is intended to aid families when buying back-to-school clothes. Click here for a complete list of what will be exempt from sales and use taxes.

In Closing . . .

My constituents have expressed opposition to various aspects of all the education and tax reform proposals and support for relief of the property tax burden, especially that burden that results from the Robin Hood system. I share your views. The issues are contentious, and the process is frustrating, but I continue to work to represent you in Austin. In order to relieve the burden on local property taxpayers that is caused by our current system of school finance, the tax must be shifted. I remain committed to working toward a solution that will maintain equity, improve accountability, increase the state's share in the cost of education to help build capacity for future education costs, and relieve the property tax burden on Texas taxpayers.


John Carona
State Senator - District 16