05:48 PM CDT on Wednesday, July 14, 2004

Associated Press

A key legislator Wednesday offered a compromise to help efforts to overhaul the Texas school finance system.

Senator Florence Shapiro co-chairs a working group on the issue.

Shapiro says August is the last realistic opportunity to address school funding and property tax reduction in a special legislative session.

Governor Rick Perry also has set August as the target date.

The first special session on school finance ended in May -- in failure.

The total cost of the plan would be $5 billion -- including new programs -- and $3.5 billion in property tax reduction.

Here's a look:

-- Shapiro's plan initially would reduce local property taxes by more than 20 percent.

-- The measure also would raise an additional $1.5 billion for new education programs -- such as a teacher pay raise and bilingual initiatives.

-- Property taxes, which now account for the majority of the education budget, would be replaced with increases in the sales tax, the motor vehicle sales tax and the cigarette tax.

-- Income from legalizing video gambling at horse tracks is not included in Shapiro's plan.

She says it could be offered separately to further reduce property taxes.