Supreme Court Rules School Property Tax Cap Unconstitutional

Part of the way Texas schools are funded is unconstitutional, according to the Texas Supreme Court. But it's not the controversial "Robin Hood" funding system. Instead, the property taxes we all pay.

With Tuesday's Supreme Court ruling, the road map to a solution has been rewritten. The state-mandated $1.50 per $100 valuation cap on school property taxes amounts to an illegal state-wide property tax, the Court said. A state-wide property tax is unconstitutional in Texas.

However, the court left intact the Robin Hood system of sharing school funds and said overall school funding is adequate, though barely.

State Senator Kevin Eltife, R-Tyler: "What a shame is that it takes a court ruling to do our job. We knew this was a problem. We knew it was the wrong way to fund public education."

Eltife says he thinks there is light at the end of all this.

"I think you're going to see meaningful property tax relief. I hope there would be a minimum of a 50 cent (per $100 valuation) property tax cut off the $1.50," said Eltife in his Tyler office Tuesday.

That kind of cut could save homeowners thousands of dollars a year, but it would leave a funding hole of $5 billion.

"We can shift the burden of property tax to another [taxing method] that's fair and equitable -- one that everyone pays," Eltife added.

Eltife and other legislators support a broad-based business tax that protects small businesses, but raises more money from larger corporations. An increase in state sales tax is also possible.

But Tyler's schools superintendent says no matter how, the dollars have to be there.

"Where the revenue would come from would not be important. But for me personally, an equitable broad-based tax would be a fair way to fund public schools," said Superintendent David Simmons.

A state committee will put forth proposals.  A resolution to the funding crisis must be made by June 1.

If the legislature doesn't meet the deadline, the courts could order public schools shut down.  But Senator Eltife says now lawmakers have just one issue to debate, it'll be easier to come to a solution.

Reported by Morgan Palmer.