Special session coming down to school finance, property taxes

^{Editor's note: This story has been updated throughout.}

With two days left in the special session, the finish line is coming into focus for Gov. Greg Abbott's agenda — though high-stakes negotiations remain pending on a pair of big-ticket items.

After a weekend that saw stalled progress on property taxes and school finance, both chambers dislodged key proposals on the issues Monday and advanced them toward conference committees. That means House and Senate negotiators will have the next two days to hammer out their differences on the two items, which top the special session wish lists for Abbott, the House and the Senate. 

As they shepherded the bills on the floor Monday, their authors offered no assurances of any deals but argued it was important to at least keep the legislation moving through the process with so little time left. Even after a meeting with Abbott on Monday evening, state Sen. Larry Taylor, the Friendswood Republican who chairs the Senate Education Committee, sought to keep expectations in check. 

"I wish I could tell you right now I already got a deal, but I don't," Taylor said as the Senate considered House Bill 21, which would provide an immediate increase in funding for public schools, though not nearly as much as the lower chamber initially proposed. 

In negotiations, HB 21 is being linked with Senate Bill 16, which would establish a commission to study reforms to the state's long-beleaguered school finance system. The House gave tentative approval to SB 16 on Monday, while the Senate did the same to HB 21 hours later. Taylor pitched HB 21 as a "bridge to get us to the next session, when we hope to be working on a totally new school finance system."

Monday also saw the House move on Senate Bill 1, which would require voter approval when larger local governments raise property taxes on existing land and buildings 6 percent or more. The legislation had been set to come up a day earlier but got postponed, apparently because it was tied up in end-of-session negotiations. 

SB 1's passage out of the lower chamber Monday was made possible by a procedural maneuver — backed by over 60 lawmakers — to end debate without taking up further amendments. That drew protests from members of the conservative House Freedom Caucus, who said they had amendments pending that would have strengthened the bill. 

State Rep. Dan Huberty, the Houston Republican who led the effort to force the bill toward conference committee, said it was necessary "so that we can finish up the session." 

A conference committee on SB 1 would likely work to hash out the most notable difference between the two versions: the "rollback" rate at which local governments must hold elections to ratify property tax increases. The Senate set that number at 4 percent, while the House has so far held firm on 6 percent.

"The intent, at least of this author, is to have the best bill for Texas taxpayers, and that means we need the best rollback rate," said state Sen. Paul Bettencourt, the Houston Republican who authored SB 1, as he requested a conference committee early Tuesday morning.

Setting aside property taxes and school finance, Abbott was poised by the end of Monday to finish the special session with at least half a dozen wins related to his 20-item agenda. They include the must-pass "sunset" legislation that will prevent some state agencies from closing, a crackdown on mail-in ballot fraud, municipal annexation reform and new abortion-related restrictions.

The weekend brought setbacks for two Abbott items in particular: capping the growth of state spending and limiting local tree ordinances. A House bill on state spending caps was brought down by opponents Saturday by a parliamentary maneuver known as a point of order, a move that was unsuccessfully challenged by a group of 12 members in a nonetheless dramatic moment on the floor. Hours later, a committee met to vote out a Senate version of the proposal, but it remains to be seen whether it can make it to Abbott's desk by Wednesday.

Also on Saturday, the House returned to the Senate a bill on local tree ordinances that the upper chamber had transformed to bring more into line with an item on Abbott's agenda. In a message to the Senate, House Speaker Joe Straus said the upper chamber's changes to the initial House bill were not germane to the bill. 

Late Monday night, the Senate took another stab at the tree legislation, House Bill 7. Its sponsor, Republican state Sen. Lois Kolkhorst of Brenham, offered an amendment that she said contained "changes designed to accommodate the speaker's concerns about the bill." Senators approved the amendment then took a series of votes sending the bill back to the lower chamber.

Throughout Monday, the outlook continued to look bleak for the most controversial proposal on Abbott's agenda: a "bathroom bill" that would regulate which restrooms transgender Texans can use. State Rep. Ron Simmons, the Carrollton Republican who has authored bathroom legislation in the House, acknowledged Monday that it would not make it to the floor but said he had not ruled out trying to propose adding it to another proposal as an amendment, a move that could be blocked if it is not germane to that bill. 

"We deserve an up-or-down vote on that, and we’re not going to get that, it doesn’t appear," Simmons said at a Capitol news conference with other bathroom bill supporters. "We’re going to fight to the end for amendment potential. I know the Senate’s doing the same thing."

Yet all signs point to the two chambers staying focused on school finance in the home stretch. On Tuesday, the House is set to take up Senate Bill 19, which would tap the state's savings account, known as the Rainy Day Fund, to ease health care costs for retired teachers. That funding source is likely a non-starter in the Senate, where members have looked askance at many of the House's proposals that would dip into the Rainy Day Fund.