Waco business community expects state lawmakers, governor to get education, property-tax reform right

What a strong year 2018 was for Waco! In December, we celebrated 81 months of consecutive economic growth; hotel-motel spending was up 15 percent from 2017 (and we had the highest hotel occupancy rate in the state!); sales-tax collections were up 2.5 percent in year-to-date spending; and unemployment dropped to a record 3.2 percent. Not to mention the multiple new businesses and restaurants that opened throughout the city and the multitude of events where our community came together to celebrate life in fun and fellowship.

With all that behind us, we’re now gearing up for the year ahead. And the 86th Texas Legislative Session looms large on the horizon.

As the organization dedicated to the economic well-being of the area, we at the Greater Waco Chamber of Commerce seek to actively promote policies conducive to growing a thriving economy and community. Our ability to help develop the economy — and your ability to help your business and our community flourish — is impacted by state and federal policies and the regulatory environment in which we operate. For that reason, the Chamber is active in the public policy sphere, advocating for businesses to our legislators on issues of importance to our community.

Prior to every state legislative session, we go through a process of seeking input from our members on policy priorities. Our public policy committee, together with other community stakeholders, listens to conversations being held around the state about coming policy debates, then develops a relevant legislative platform to inform and guide our advocacy work in the legislative session and interim that follows.

A great deal of conversation at the state and local levels over the past few months relates to property taxes, school finance and workforce development. Indeed, the growth of property taxes and the quality and future of our workforce are directly related to school funding. They consistently top the concerns we hear from our business members.

The manner in which schools are currently funded is too heavily reliant on local property-tax dollars. As economic growth occurs and property values rise, the state uses these increased local contributions to pay less in per-pupil spending. In fact, the state’s budget actually plans on (and some might say mandates) this imbalance, calling for increased property-tax valuations ranging from 6-7 percent annually for each of the next two years. This allows the state to pay less by shifting the cost down to local taxpayers. Where the state in years past paid the majority of per-pupil costs to educate our children, its share has now fallen to 37 percent of the cost being paid by the state and the balance being assumed by local property taxpayers.

Without reform to the way we fund our schools, this state share will drop to just 30 percent by 2023. At a time when Texas already has the fourth highest property-tax burden of all 50 states (ranking us 46th of 50), this will inevitably mean millions more dollars that will have to be collected locally in order to offset the loss of state dollars. Every property owner can expect his or her local property-tax bill to increase if no changes are made to the way we fund our schools.

The question of how we fund our schools also ties in with whether they are adequately funded. While money isn’t the only determining factor, it is a factor. Money matters in education, and money well-spent can allow our schools to produce the student outcomes we need.

Recognizing our current skills gap and that our student outcomes are not aligned with what our businesses need, Gov. Greg Abbott called on three key agencies — the Texas Workforce Commission, Texas Higher Ed Coordinating Board and Texas Education Agency — to work together on a shared vision for the workforce our state will need if we are to keep our economic strength. That vision is called 60x30Texas and it aims to see 60 percent of Texans ages 25-34 hold post-secondary degrees or higher by the year 2030. This is a data-driven goal; by just 2020, more than 60 percent of jobs created will require some sort of post-secondary degree. And the current reality provides a stark contrast. At present, just over 30 percent of graduating students in Texas test on the ACT or other college or career-readiness measures as “college-ready,” and less than 30 percent of high school graduates have completed any post-secondary degree six years after graduating. The implications for our future workforce — and our ability to sustain and grow our economy — are grave if we fail to act.

For these reasons, key priorities as we move into the legislative session are addressing property tax reform; opposing increases in local appraisal growth mandated by state budget planning; and increasing the state’s share of per-pupil spending on public education, focusing those dollars on the strategies proven to improve student outcomes in order to build a 21st-century workforce. Further, the process of appraisal valuation needs reform, and we call on improvements to include local input on valuation ranges. At present, the state sets target valuation ranges based on a sample of properties, and each appraisal district must come near that target. Aligned with our overarching support of local control, a priority is local input on those target ranges.

Because there has been significant conversation at the state level around the interwoven issues of property taxes and school finance, these are key priorities for our Chamber. However, as the organization responsible for the economic development of the area, we also have state legislative priorities regarding competitive incentives, small business and entrepreneurship and trade and international competitiveness. We continue to support the Texas Enterprise Fund — the state’s deal-closing incentive fund — and we call on the Legislature to expand accessibility to the fund for existing businesses of all sizes throughout the state.

The Greater Waco Chamber of Commerce is a membership-driven chamber, and there are issues across the board that impact the ability of our members to develop and grow their business. In our recent Chamber quarterly issue of Greater Waco Business (available at racks around town and at the Chamber building), we looked at the health-care sector in our community. As an example of our legislative priorities, we know access to a healthy workforce impacts day-to-day business operations. However, access to health care in Texas is limited. In fact, Texas has a rate of uninsured more than twice the national average (26 percent compared to 11 percent). Further, Texas is also experiencing both a physician and a nursing shortage. Half of Texas counties do not have sufficient physicians for their population and 35 counties have not a single physician. For that reason, our legislative priorities focused on health care include things like expanding access to health-care coverage; prioritizing preventative and behavioral health care; supporting robust nursing programs and allowing those nurses to practice within the scope of their expertise; and, given that doctors are most likely to work where they do their residency, prioritizing additional medical residency slot funding over new medical school funding.

The Chamber’s legislative agenda is robust yet focused, prioritizing those topics of greatest impact to our businesses: business climate (including tax and fiscal policy and regulatory reform); economic development; public and higher education; health care; transportation and infrastructure; and water and natural resources. To see the Chamber’s full state legislative agenda for the 86th session, please visit our just launched and newly designed website at wacochamber.com, or reach out via email to jattas@wacochamber.com. If you become aware of a bill during session that would impact your business or industry, or simply our community at large, please let us know. The interim has been busy since our legislators last convened, and we look forward to continuing to work for the good of our businesses and community in the months of legislative action ahead.

This article was originally published in the Waco Tribune-Herald.

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