Property Tax Alert: Texas

December 2005

The highly anticipated ruling from the Texas Supreme Court on Public School Finance has been released. The Court ruled that the current school finance system with its $1.50 cap on ad valorem property taxation by a school district results in what the court considers an unconstitutional statewide property tax.

The Court upheld the amount of funding to the schools as constitutionally adequate, but ruled the current school finance system to be unconstitutional. In other words, it is the method of raising school funding and not the amount that was ruled inadequate by the Court.

They have set a June 1, 2006 date to fix the current school finance system so that it could be in place by the 2007 school year. This means that the Legislature will be back in a special session—likely in the spring of 2006, after the March primaries—to address the decision and meet the deadline by the Court for the Legislature to act.

Please contact Rash & Associates for more information.