Budget & Taxes (Audits & Accountability)

HB 99 replaces school districts' local property taxes (M&O taxes) with a state value-added tax (VAT) starting in 2030, if voters approve a related constitutional amendment. The bill repeals school district authority to levy M&O property taxes and creates a 6.72% state VAT on goods and services, with all revenue directed to the Foundation School Fund for public education operations. It also repeals specific sections of the Tax Code and Education Code related to local property taxes. The law requires voter approval for the constitutional change before taking effect on January 1, 2030.

HB 91 would reduce school district property tax rates by using surplus state revenue to lower the "state compression percentage" that determines how much districts can charge for maintenance and operations. It directs the comptroller to allocate surplus state revenue into a property tax relief fund, which the commissioner can then use to further reduce this percentage. If the percentage reaches zero, school districts would be prohibited from imposing the lowest tier of property taxes and would automatically qualify for full state funding as if they had the maximum allowable tax rate. This bill directly affects all Texas public school districts by potentially lowering their local tax burdens and changing their funding structure.