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Texas Senate
August 19, 2005
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Session Ends with No Resolution on School Finance Reform

AUSTIN - Both Houses of the Legislature adjourned sine die today, signifying the end of another unsuccessful attempt to improve Texas schools and lower local property taxes.

The effort hit an early snag this time, when both tax and education reform measures died in the House early in the Session. Even though the Senate was able to pass a school reform measure soon after that, there was no real movement on a tax reform plan after House Bill 3 failed. Lt. Gov. David Dewhurst today laid out what he thought was the reason why the Legislature could not resolve this difficult issue.

Dewhurst pointed to two specific reasons that prevented an agreement between the House and Senate. The first is the question of which branch of government should govern this issue. The Texas Supreme Court is currently considering a challenge brought against the state which claims its education system is unconstitutional because it does not provide equal funding among school districts. Many in government hoped that by changing the education system, the Legislature could render this challenge moot, while also improving the quality of education. Others felt the court should decide first, and that the House and Senate could then take direction on education reform based on the court's ruling. Dewhurst said he resided firmly in the first camp, while many in the House preferred the latter solution. It was this fundamental disagreement, over whether or not the Legislature should even be addressing the issue of school finance, which led, in large part, to the stalemate over the issue.

The second reason, said Dewhurst, was that certain special interest lobbyists, particularly those representing the petrochemical industry, were against tax reforms that broadened the business tax. He said that these lobbies were not effective in the Senate, but were able to gain the necessary leverage in the House to prevent any meaningful tax reform.

Dewhurst added that he believes the Senate tried as hard as it could to fix the school finance problem in Texas. "I'm disappointed that the Legislature couldn't solve school finance. I think the public deserves better from its elected officials," he said. "Having said that, I'm proud of the Senate. I'm not aware of anything the Senate could have done more to solve school finance." He went on to say that Senators and staff would continue to work on the issue over the interim so that should the governor call a third special session, the Senate would be ready.

Senator Robert Duncan of Lubbock said that at the heart of this issue is Texas' antiquated tax system. The current system, under which five out of six businesses can avoid paying franchise taxes, does not adequately tax Texas' modern economy. "The number one most important thing we have to resolve is we have to reform our tax structure," said Duncan. "Without adequate money going into education, you cannot reform. The amount of money we were trying to put into reforms the House and Senate both wanted, was really not sufficient to accomplish what was intended."

Session video and all other Senate webcast recordings can be accessed from the Senate website's Audio/Video Archive.