Legislator: Damaged districts need a hand
Property tax losses will be an issue in areas hit by Harvey
A key voice in the Texas Senate offered new assurances on Tuesday that the Legislature will help schools affected by “a significant reduction” in property tax collections due to Hurricane Harvey.
State Sen. Jane Nelson said the state is not going to let schools in communities affected by Hurricane Harvey suffer more after what they have already been through.
“I think you are going to see a very sympathetic Legislature to the needs of those students in the districts that have been affected,” said Nelson, the chair of the Senate Finance Committee, which has jurisdiction over creating the state’s budget every two years.
Her comments came moments after Texas Education Commissioner Mike Morath told the Senate Finance Committee that school districts serving more than 1.5 million Texas children are facing up to a $1 billion drop in property tax collections because of damaged homes and businesses that will get reassessed because of storm damage.
Filling the gap
The state is under no legal obligation to cover those expenses, but Morath noted the Legislature covered similar property tax losses after Hurricane Ike in 2008. But that storm only resulted in about $30 million in property tax losses. Morath said school districts have been asking him if the Legislature will fill the gap again. He said he hasn’t been able to say definitively. He added that if the Legislature does not help, it would likely mean budget cuts and potential teacher layoffs in communities still reeling from the damage Harvey caused.
Nelson, a Republican from Flower Mound, was quick to make clear that in her conversations with other legislators, Gov. Greg Abbott and Lt. Gov. Dan Patrick, that she gets the sense the state will help — but stopped short of guaranteeing that will happen.
“We don’t want to be laying off teachers,” Nelson said. “My sense is that we’re going to take care of those kids.”
State Sen. Lois Kolkhorst, a Brenham Republican, said she worries that schools that have already been through so much could see yet more disruptions if the state doesn’t help the districts.
“We don’t want to victimize them twice by laying off their teachers,” Kolkhorst said.
The Senate Finance Committee was hearing updates on postHarvey relief efforts, something Nelson has made a priority to have in each committee meeting since the storm hit.
“We’re going to keep shining a light on this until everyone gets the assistance they need,” Nelson said.
The committee also heard testimony from the Legislative Budget Board. It said, as of the end of February, $2.1 billion has so far been spent on recovery — $1.6 billion from the federal government and about $206 million from the state’s general revenue fund. Agencies have estimated another $5.1 billion is needed with $4.6 billion of that coming from the federal government.
Credit ratings
Later at the same meeting, Comptroller Glenn Hegar made a new pitch to get the Legislature to give him new authority to invest portions of the state’s Economic Stabilization Fund — the so-called rainy day fund. He pitched a similar idea last year to the Legislature, but they did not give him the authority he sought.
Now, he said allowing him to reinvest those funds would produce revenue to shore up the state’s pension fund — something he said he worries could become a long-term problem with credit rating agencies.
The state already has the top rating — AAA. He said if the state were to be downgraded, it would make borrowing more expensive.
But some senators were quick to challenge Hegar’s proposal. Sen. Kel Seliger, R-Amarillo, said the added revenues from reinvesting the money would likely be “trivial” in having an impact on the state’s credit rating.