Texas House Bill HB180

Texas 2025 - 89th 2nd C.S.

• Filed: 8/15/25

Caption

Relating to a temporary reduction in the maximum compressed tax rate of a school district; making an appropriation.

Impact

If enacted, this bill will directly affect the financial operations of school districts by modifying the criteria under which their maximum compressed tax rates are calculated. This legislative change aims to align the tax rates of various districts more closely and ensure that no district's rate falls below 90% of another's, thus stabilizing funding across the districts. Consequently, this could lead to a more equitable distribution of resources among school districts, particularly benefiting those with larger tax bases who currently face higher rates.

Summary

House Bill 180 proposes a temporary reduction in the maximum compressed tax rate for school districts in Texas for the 2026-2027 school year. This legislation introduces a method whereby the commissioner will determine each district's maximum compressed tax rate and subsequently reduce it by an allocated amount of state appropriations specifically aimed at lowering these tax rates. The bill intends to provide financial relief to school districts by adjusting how property taxes are calculated, which may lead to an overall decrease in tax burdens for some districts.

Contention

The bill has sparked discussions regarding its long-term implications on state funding and local governance. Proponents argue that it encourages more equitable funding across school districts, thereby reducing disparities in educational resources. In contrast, critics may raise concerns about how the temporary nature of this reduction could lead to future fiscal constraints once the provisions expire, creating uncertainty in budget planning for school districts post-2028. Further, there might be debates over whether reliance on state appropriations for tax reductions is a sustainable approach to managing school funding in the long term.

Texas Constitutional Statutes Affected

Education Code

• Chapter 48. Foundation School Program
  • Section: New Section
  • Section: 2551
  • Section: 2553
  • Section: 2556

• Chapter 1. General Provisions
  • Section: New Section

Tax Code

• Chapter 26. Assessment
  • Section: 08