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School Finance Affecting Economy?

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Texas usually ranks near the top for businesses expansion and relocation. But one Texas A&M economist believes the state is slipping from that position and that the controversy over school financing is playing a big part.

With the school finance issue looming in Austin, there are as many ideas on how to alleviate the money crunch as there are lawmakers.

Some tax reform possibilities include a statewide property tax and a business tax.

Texas A&M economist, Dr. Mark Dotzour, believes this wave of uncertainty may be causing out of state businesses to delay plans to come to Texas.

"Businesses shun uncertainty. They shy away from that and the uncertainty right now is the tax situation. Certainly someone is going to pay more in taxes," said Dotzour.

That someone paying more in taxes could also be consumers and property owners.
College Station I-S-D Superintendent, Dr. Steve Johnson, agrees with Dotzour's research to a certain extent, but looks at the other side.

"We have to be cautious if we say that the taxes are going to drive everybody away. It could be if we lower the quality of the schooling, it could drive people away as well. So we kind of have to work both of those simultaneously," said Johnson.

Johnson believes that the state has relied too heavily on property taxes, but knows the money has to come from somewhere.

"If we diminish the property taxes that contribute to public schools, then something has to offset that in some form," said Johnson.

Until state legislators lay out at a definite plan for school finance, everyone will be playing the guessing game. But Dotzour hopes that businesses won't second guess their decision to come to the Lone Star State.

"The sooner we can resolve this issue, the more likely it would be that Texas will regain its national leadership in terms of job creation," said Dotzour.