Texas House Bill HB149

Texas 2025 - 89th 1st C.S.

• Filed: 7/21/25

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.

Impact

The proposed elimination of maintenance and operations taxes could have significant implications for how public schools are funded in Texas. With the removal of these ad valorem taxes, schools may find themselves relying heavily on state-level funding and alternative revenue sources, primarily through consumption taxes. This shift could promote a more uniform funding model but may also lead to unpredictability in operational budgets for school districts, particularly those that have relied on local property taxes for stable funding.

Summary

House Bill 149 aims to eliminate school district maintenance and operations ad valorem taxes and establishes a joint interim committee to assess this elimination. As proposed, starting January 1, 2028, school districts would be prohibited from imposing these taxes, fundamentally altering the financial landscape for public education funding in Texas. However, the bill allows school districts to impose an enrichment tax, capped at $0.17 per $100 of taxable value, intended to provide additional support for educational opportunities beyond what state funding would cover.

Contention

One of the notable points of contention surrounding HB 149 is the reliance on consumption taxes as a replacement for property taxes. Critics argue that such taxes may not sufficiently cover the funding needs of local schools and could disproportionately affect low- and middle-income families. The interim committee established by the bill is tasked with evaluating the potential impacts of expanding consumption taxes and their feasibility in fulfilling the state’s obligation to provide adequate education funding, leading to debates on the overall fairness and efficiency of such a taxation model.

Texas Constitutional Statutes Affected

Tax Code

• Chapter 26. Assessment
  • Section: New Section

Government Code

• Chapter 301. Legislative Organization
  • Section: New Section