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Tag Archives: texas school funding

Analysis: The Taxes Texas School Districts are Afraid to Cut

A state law that’s supposed to keep a leash on school tax increases might be preventing temporary tax breaks in the Texas districts with the highest tax rates. But reversing it could make it easier to raise taxes.

It’s hard to tell the tax hawks from the tax doves sometimes. A legislative proposal meant to make it easier for school districts to grant temporary tax rate cuts was derailed this week by opponents who say it would also allow districts to raise taxes without voter approval.

It would do both things — and either of them would probably make property taxpayers happy.

Currently, school districts with tax rates of $1.04 or more can’t raise their rates without voter permission. They also cannot temporarily lower their rates without holding another vote when it’s time to return to the original higher rate.

Several lawmakers in the Texas House and Senate have proposed allowing a school district that’s already got a tax rate above $1.04 to lower its rate temporarily without having to hold a new election to raise it back to the original rate. If they could do that, taxpayers would be more likely to get those temporary cuts.

A district with a rate of $1.15, for instance, would be allowed to cut the rate to $1.10 for a year and then return to $1.15 without going to voters for permission. The logic is that voters had to approve the original rise to $1.15, so there’s no need to ask them again.

House Bill 486, sponsored by state Rep. Gary VanDeaver, R-New Boston, made it to the full House but was swatted down by his colleaguesttxxt on a technicality. He has time to fix it and send it back to them. The Senate is poised to consider identical legislation next week.

State Rep. Jeff Leach, R-Plano, is the one who called the foul on VanDeaver. With some amendments, Leach said, he might be persuaded to support VanDeaver’s legislation.

Leach’s home school district — Plano ISD — is a prime example of the districts in question, and his taxpayers could be among the proposed legislation’s beneficiaries.

PISD voters overwhelmingly approved a $481 million bond package in May 2016. Among other things, that money gives the district temporary budget relief, according to School Board President Missy Bender — enough to cut spending by $15.6 million and to cut $7.7 million from the district’s “Robin Hood” payment to the state this year.

But the district expects it will need to revert to its current tax rate pretty quickly. Under current law, it could cut the tax rate now — by about 3.8 cents, Bender says — but would have to hold an election to return to the current rate later. Alternatively, the district can leave things be, keep charging taxpayers the higher current rate and save the unspent proceeds for a future rainy day.

“I can’t keep it at the lower rate, but from time to time, I’d like to be able to save them money,” Bender said of the district’s property taxpayers.

Roughly a third of Texas school districts — 438 — had maintenance and operations tax rates above $1.04 in 2016, according to the Texas Education Agency. Most of those — 329 — had moved their rates all the way up to $1.17, the highest rate allowed under normal circumstances.

The current law encourages districts to leave the tax rate alone, Bender says — to skip the temporary cut and bank the money. That avoids the district’s risk and expense of a future election. Supporters of current law contend the districts should lower rates whenever they have the opportunity and shouldn’t raise them under any circumstances without voter approval.

Under the proposal stalled in the House this week but still alive in the Senate, her district would be able to lower its rate by 3.8 cents now and return — without a new vote — to its current rate later on. Supporters of changing existing law, a group that includes Plano and most of the state’s other school districts, argue taxpayers who’ve once approved a tax rate shouldn’t be asked to approve it all over again after a temporary tax cut.

The cuts in question would probably not be huge — Plano could save its average homeowner about $113 with a 3.8-cent cut this year, Bender says. But any cuts would probably be welcome; taxpayers only rarely get these temporary reprieves under current law.

“Boards are hesitant to lower the rate when they are able to do so because they would have to hold another election to return to the rate that voters had already approved,” state Rep. Donna Howard, D-Austin, told the House Ways & Means Committee at a hearing last month. Howard, who sponsored legislation identical to VanDeaver’s and made the opening argument for both of them, said any tax rate increase would be one that had previously been approved by voters.

As the districts read it, this is a choice between temporary tax cuts and no cuts at all. As the defenders of current law see it, the decisions over rising tax rates ought to be in the hands of voters and not school boards.

But only one side is dangling a tax cut.

More columns from Ross Ramsey:

Author:  ROSS RAMSEY – The Texas Tribune

Abbott, Patrick Disagree on Special Session for School Funding

Gov. Greg Abbott turned down Lt. Gov. Dan Patrick’s suggestion that he call a special session to overhaul school funding.

Days after Lt. Gov. Dan Patrick suggested that Gov. Greg Abbott call a 30-day special session to overhaul the state’s school funding system, Abbott said Monday that no such special session was needed.

Patrick told the Midland Reporter-Telegram last week that there is not enough time during next year’s 140-day regular session to discuss overhauling the controversial “Robin Hood” school funding system, which redistributes money from property-rich school districts to property-poor districts.

“If the governor is willing, I am willing to address it in a special session,” Patrick told the newspaper.

But Abbott made clear Monday that he is not willing. His office issued a statement saying the matter should be thoroughly discussed in regular session — not a separate special session.

“Governor Abbott believes Texans deserve for issues—including fixing a broken Robin Hood system—to be thoroughly debated and addressed in a regular session where responsible and hardworking legislators have plenty of time to address these serious topics. Texans don’t want a full-time legislature, they want a legislature that can get their work done and then go home,” spokesman John Wittman wrote in a statement.

In May, the Texas Supreme Court upheld the state’s school finance system as constitutional while also deeming it “undeniably imperfect” and urging lawmakers to make improvements.

Read more about school funding here:

Author: ALIYYA SWABY – The Texas Tribune

Analysis: Rising Local School Property Taxes ease State Budget Woes

It would not be completely accurate to say billions in local school tax money is being used for general state spending.

But it wouldn’t exactly be wrong, either.

Property-rich school districts in Texas hate sending money to the state to help property-poor school districts. But the state has little incentive to change that system: Every dollar the rich districts send in is a dollar the state itself doesn’t have to spend.

The money coming in from those property-rich districts is quite a pile, too. For lawmakers writing the 2018-19 budget, that “recapture” money will increase by an estimated $1.44 billion, freeing that much state money for other general spending.

The richer school districts (“richer” here refers to the value of their real estate and not to the incomes of the residents) are sending $3.69 billion to the state in the 2016-17 budget period. The state has to use that money on public education; it’s an effort to level out the differences in how much money is available to educate kids from different parts of the state.

That said, any money that comes in from the rich districts allows the state to spend the dollars it would have spent on education on other programs and services. The numbers are rising, too. The Texas Education Agency estimates it will “recapture” $5.13 billion during the next budget period, up from $3.69 billion in the current budget.

At the same time the agency’s official budget request to state lawmakers would require the state to spend 8.4 percent less from general revenue than the current budget a drop that’s partly attributable to the increase in recapture money available to the state.

The locally raised taxes recaptured from property-wealthy districts lower the amount of state-raised money — sales taxes and so on — that have to be spent on schools. Local taxpayers, in this case, are saving state taxpayers some money.

Intentionally or not, it’s a great political deal for state lawmakers. They can squawk at local school districts for high property tax rates at the same time they’re using some of that money to lower the state’s expenses for public education. The state budget is easier to balance because of the local tax money marbled into school spending.

Houston ISD’s voters are the latest to fall into this recapture business, joining voters in the 230 other Texas districts that were required to put some of their tax money in the state pot this year.

They’ll see it on the ballots when early voting starts next week — a proposition asking whether they are for or against “Authorizing the board of trustees of Houston Independent School District to purchase attendance credits from the state with local tax revenues.”

If the voters say yes, the school district will send the state an estimated $165 million next year. If they say no, approximately $18 billion in commercial property will be taken off of the district’s roll of taxable properties and assigned to a poorer district’s tax rolls. Either way, that $165 million will be leaving the district.

Some Houston officials — several school trustees and Mayor Sylvester Turner among them — believe and hope that a “no” vote will serve as a wakeup call to Texas lawmakers, prompting major revisions to the school finance laws.

Maybe, maybe not. They would not be causing new problems for the Texas Legislature of the kind that might prompt school finance reform. The courts can force such an effort, but it’s unlikely that Houston voters will.

If anything, Houston’s troubles ease pressure on the state lawmakers who have to write the next budget. Money is expected to be tighter for the next two years. If Houston’s property taxpayers are forced through school recapture to send $165 million to the state, that’s that much money those budget writers won’t have to find for public education. They can spend it somewhere else.

Put Houston into the mix with all of the other districts that send money to the state, and those budget writers are getting an additional $1.5 billion — give or take — from local school property taxes. Yes, that money has to be used for public education, but it replaces what the state would otherwise have had to spend.

That helps state budget writers in a year when lower oil prices and a cooling economy are cutting into the state’s income.

That, in political and legislative terms, is the opposite of pressure.

More columns from Ross Ramsey:

  • The Clinton campaign is buying television ads in Texas, but not enough of them to capture the attention of most TV viewers — or most voters. So what’s the deal?
  • Texas Democrats have pined for years for a candidate who could turn their luck around. Now they’re hoping a Republican will answer their prayers.
  • Regulators are deciding how much lobby wining and dining Texas lawmakers can accept without revealing their names. Hint: It’s a lot.

Author: Ross Ramsey – The Texas Tribune

Texas Supreme Court Upholds School Funding System

The Texas Supreme Court on Friday issued a ruling upholding the state’s public school funding system as constitutional, while asserting that the state’s more than 5 million students “deserve transformational, top-to-bottom reforms that amount to more than Band-Aid on top of Band-Aid.”

“Our Byzantine school funding ‘system’ is undeniably imperfect, with immense room for improvement. But it satisfies minimum constitutional requirements,” Justice Don Willett wrote in the court’s 100-page opinion, which asserted that the court’s “lenient standard of review in this policy-laden area counsels modesty.”

There were no dissenting opinions; Justices Eva Guzman and Jeff Boyd delivered concurring ones.

“Good enough now … does not mean that the system is good or that it will continue to be enough,” Guzman wrote. “Shortfalls in both resources and performance persist in innumerable respects, and a perilously large number of students is in danger of falling further behind.”

Since the 1980s, school districts have repeatedly sued the state in an attempt to increase public education funding. The latest case, brought by more than two-thirds of Texas school districts, is the seventh time such a case has reached the state Supreme Court.

“This is an historic ruling by the Texas Supreme Court, and a major victory for the people of Texas, who have faced an endless parade of lawsuits following any attempt to finance schools in the state,” Attorney General Ken Paxton said in a statement Friday. “We have said all along that school financing must be debated and shaped by the Texas Legislature, not through decades’ worth of ongoing litigation in the court system, and I’m pleased the court unanimously agrees.”

“Today’s ruling is a victory for Texas taxpayers and the Texas Constitution,” said Gov. Greg Abbott, who was attorney general when the lawsuit was filed. “The Supreme Court’s decision ends years of wasteful litigation by correctly recognizing that courts do not have the authority to micromanage the State’s school finance system.”

Houston Lawyer Mark Trachtenberg, who represented property-wealthy school districts in the case, said the ruling “represents a dark day for Texas school children, especially given the Legislature’s repeated failure to adequately fund our schools.”

“Given the importance of education in the 21st Century economy, Texas simply cannot afford to be bringing up the rear among the states in financial support of public education,” he said.

Teacher groups also bemoaned the ruling.

“It is a sad day when the state’s highest court decides that doing the least the state can do to educate our children is enough,” said Texas State Teachers Association President Noel Candelaria.

Meanwhile, the Center for Public Policy Priorities, a left-leaning think tank, called on the Legislature to “make meaningful investments in our schools so that all Texans have the chance to live up to their full potential.”

A recent study by the National Education Association found that Texas ranks 38th in the country in per-pupil public-education spending.

In the latest school finance suit, more than 600 Texas school districts sued the state after the Legislature cut $5.4 billion from the public education budget in 2011.

Their lawyers argued the state’s method of funding public schools was unconstitutional on a variety of grounds — that the Legislature had failed to provide districts with sufficient funding to ensure students meet the state’s increasingly difficult academic standards; that big disparities had emerged between property-wealthy and property-poor school districts; and that many school districts were having to tax at the maximum rate just to provide a basic education, meaning they lacked “meaningful discretion” to set rates. That amounts to a violation of a constitutional ban on a statewide property tax.

In a 2014 ruling, Travis County District Court Judge John Dietz — a Democrat — upheld all of those claims, siding with the plaintiff school districts.

He ruled against two other parties in the lawsuit that did not represent traditional school districts.

In early 2012, a group representing parents, school choice advocates and the business community filed a suit alleging that the current school finance system is inefficient and over-regulated. The Texas Charter Schools Association also sued the state, arguing that a cap on charter school contracts and charters’ lack of access to facilities funding was unconstitutional.

Then-Attorney General Abbott appealed Dietz’s ruling directly to the all-Republican state Supreme Court.

During oral arguments Sept. 1, state lawyers asked the court to dismiss or remand the case to a lower court so it may consider changes lawmakers recently have enacted to the state’s school finance system. Last year, the Legislature increased public education funding by $1.5 billion and authorized another $118 million for a high quality pre-kindergarten grant program that Abbott championed.

Before issuing his ruling, Dietz reopened evidence for a four-week period so that he could consider changes made by the 2013 Legislature, which restored about $3.4 billion of the $5.4 billion in public education cuts made in 2011 and changed graduation and testing requirements.

Correction: A previous version of this story incorrectly said Friday was the first time the Texas Supreme Court has upheld the state’s school finance system as constitutional. It was the second time. 

Disclosure: The Texas State Teachers Association and the Center for Public Policy Priorities have been financial supporters of The Texas Tribune. A complete list of Tribune donors and sponsors can be viewed here.

Author: Kiah Collier  – The Texas Tribune

The Texas Tribune is a nonpartisan, nonprofit media organization that informs Texans — and engages with them – about public policy, politics, government and statewide issues

Sen. Rodríguez Organizes School Funding Workshop

The Texas Supreme Court will soon deliver a decision in Texas Taxpayer and Student Fairness Coalition v. Williams, which will determine if there are any Texas constitutional violations in the way schools are funded in Texas.

To review the potential impacts, State Sen. José Rodríguez has organized a workshop regarding school finance from 9-2 on Friday, Feb. 12, at the Region 19 Service Center.

“If a violation is found, then the Texas Legislature will be legally forced, once again, to address the hard questions of how to fund our public schools,” Rodríguez said. “If the Governor calls us into a special session to take on this issue, our regional leaders and administrators must be ready to advocate for their students with proposals that will prepare them to be college- and work-ready, and to be future leaders of Texas.

He added “The stakes could not be higher for our state and our students.”

Texas school finance expert and former state Rep. Paul Colbert will help lead the discussion. As a state representative, Mr. Colbert co-authored several education reform bills, including H.B. 72, the Education Reform Act of 1984, and S.B. 1, the school finance reform bill passed in 1990. He is considered one of the foremost experts in Texas on public school finance, and drafted or influenced much of the Texas school finance legislation from 1974 to 1991.

Mr. Colbert is now a consultant in strategic planning and problem-solving, public affairs, and public policy for numerous clients. His clients have included the El Paso, Ysleta, Houston, Kaufman, and Boles school districts. As a consultant, Mr. Colbert created the equitable state aid distribution system for the teacher salary increase in 1999, and drafted the legislation and brokered the compromise that expanded access to dual credit and early college programs.

Since leaving office, he has continued to have a major impact on legislation in Texas, particularly in public and higher education and school finance, was a lead witness for the Equity Center and MALDEF in the previous school finance lawsuits in Texas, and did much data analysis for the current lawsuit.

Mr. Colbert has received the “Champion of Equity Award” from The Equity Center. He also conducted the School Finance Reform study for the State of Oklahoma. Prior to his election, Mr. Colbert served as Research Director for the Senate Education Committee and as an advisor on school finance to Governor Briscoe.

The public is invited to attend the event. To ensure adequate seating and refreshments, interested parties are asked to go to www.Eventbrite.com and RSVP for the event.

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