Bill > HB5579

This bill modifies the Texas public school finance system by adjusting the calculation of the state compression percentage (SCP) and a school district's maximum compressed rate (MCR). Specifically, the bill changes the multiplier in these calculations from 1.025 to 1.01, which slightly reduces the rate of increase in tax compression. The state compression percentage will now be calculated using a formula that multiplies the previous year's compression percentage by 1.01 instead of 1.025, and the maximum compressed rate determination will use a similar adjusted multiplier. Additionally, the bill modifies the threshold for when the maximum compressed rate calculation changes from a 2.5 percent increase in district property value to a one percent increase. These technical changes appear to make minor adjustments to how school district tax rates are calculated, potentially providing a small reduction in the rate of tax compression. The bill is set to take effect on September 1, 2025, giving school districts and tax authorities time to prepare for the changes.

Budget and Finance

https://capitol.texas.gov/BillLookup/History.aspx?LegSess=89R&Bill=HB5579