Texas lawmakers have introduced House Bill 1030, a significant piece of legislation aimed at reforming property tax relief for school districts. Proposed on March 7, 2025, this bill seeks to address the financial burdens faced by local school districts by modifying the state’s funding mechanisms.

The primary purpose of House Bill 1030 is to eliminate the tier one maintenance and operations tax for school districts when the state compression percentage is zero. This means that districts will not be able to impose this tax for the current or any future school years. Instead, they will receive funding as if they had a maximum compressed tax rate, effectively providing them with a financial cushion during lean years. This change is expected to alleviate some of the fiscal pressures on school districts, allowing them to allocate resources more effectively.

Key provisions of the bill include a mandate for the Texas Comptroller to allocate a portion of general revenue to a fund dedicated to property tax relief. Specifically, 90 percent of any excess general revenue collected beyond a certain threshold will be directed to this fund. The funds will be appropriated exclusively to the Texas Education Agency, which will use them to reduce the state compression percentage, thereby providing further tax relief to school districts.

The bill has sparked notable discussions among lawmakers and education advocates. Proponents argue that it will provide much-needed financial relief to schools, particularly in areas where local funding is insufficient. Critics, however, express concerns about the long-term sustainability of such funding mechanisms and the potential impact on state revenue.

House Bill 1030 is set to take effect on September 1, 2025, and will apply to the state fiscal biennium beginning September 1, 2027. As the bill progresses through the legislative process, its implications for Texas education funding and property tax structures will be closely monitored. If passed, it could reshape how school districts manage their finances and provide educational services, potentially leading to improved outcomes for students across the state.