School finance plan nears final vote

AUSTIN (KXAN) - A bill crucial to balancing Texas' budget for the next two years hits the House floor Thursday. Senate Bill 1 contains the school finance plan – the much-debated method of dolling out $4 billion in cuts to districts across the state.

Current law requires the state to fully fund schools with $4 billion more than the two-year appropriation lawmakers passed in the regular session. Now in a special session, SB 1 aims to rewrite law to legally allow those cuts.

During the first year, all districts would receive cuts of 6 percent across the board. In the second year, property rich schools would face greater cuts than poorer districts. This has been a point of contention among lawmakers, as that system would remain in place through 2018 – unless otherwise addressed in a legislative session before that time.

In addition to the school finance plan, SB 1 defers $2.2 billion in payments to the Foundation School Program over the next two years, meaning lawmakers in the next session will have to deal with that funding obligation.

There are also move than 50 other facets to SB 1 to pump money back into the budget, including: motor fuels taxes, alcoholic beverage taxes, and state parking lot leases.

SB 1 is expected to pass with a Republican supermajority in the House.

One controversial provision, however, could complicate matters. The bill would require the state to collect sales tax on Internet transactions, which Gov. Rick Perry does not favor.

“I urge lawmakers to remove the Internet sales tax language from HB 1," Perry said in a statement. "I believe this provision risks significant unintended consequences, including a loss of Texas job opportunities and weakening of our state’s competitive advantage. ...

“As I said when I vetoed similar language in a stand-alone bill, my strong preference is to conduct a thorough policy discussion with Texas lawmakers, consumers, retailers and technology experts – and with other states and even the federal government – about interstate commerce and the structure of state sales taxes in the 21st century.”

The House on Thursday declined to delete the provision,