Senate Study to Replace Ad Valorem Taxes - Final Report

The Senate Study to Replace Ad Valorem Texas was created by the Senate during the 65th Legislature's Regular Session. The Study's main purpose was to examine the possibility of using a five percent tax on crude oil inputs to refiners as a replacement for property taxes levied and collected by school districts. In addition, the Study was charged with investigating other possible sources of tax revenues that might be used, instead of a refinery tax, to replace property taxes. This Final Report is divided into two main parts. First is the section on taxes, second is the section on the problems of local control and replacing property taxes with other dollars. Each of the major divisions has a brief introduction and discussion, and further remarks will be deferred until those pages. One final note here, however, is that this Study was conducted in the context of trying to find a source of revenue which will raise between one the two billion dollars each year. This is because school districts raise that amount to pay their share of the public education system, and to make a sizeable dent in the property tax load borne by taxpayers, at least one billion dollars each year - and probably closer to two billion - will be needed.