Tag Archives: texas school finance

The Texas Senate on Monday approved a bill to massively overhaul public school finance, but did so while backing away from a proposal to use an increased sales tax to lower school district property taxes.

After an hours-long debate on dozens of proposed changes, the Senate voted 26-2 on House Bill 3, which under the version passed by the upper chamber would increase student funding, give teachers and librarians a $5,000 pay raise, fund full-day pre-K for low-income students, and lower tax bills.

The House and Senate will have to negotiate their significant differences over the bill — including how to offer teacher pay raises and property tax relief — in a conference committee before it can be signed into law.

“When you’re doing something as complex as this, there’s going to be something you don’t like,” said state Sen. Larry Taylor, R-Friendswood, the bill’s author, anticipating tension throughout the day’s debate.

Since school districts levy the majority of property taxes in Texas, many lawmakers have been seeking ways to help reduce those portions of Texans’ tax bills. But since the state is required to ensure school districts have enough money to educate students, any tax relief effort would have a significant cost — requiring the state to reimburse schools, if they’re unable to collect enough from local property taxes.

Taylor had originally included several provisions that would provide ongoing tax relief, paid for by an increase in the sales tax by one percentage point.

Republican leaders, including Gov. Greg Abbott, had thrown their support behind that sales tax swap, arguing it would help Texans who are currently being taxed out of their homes. But the proposal has serious detractors in lawmakers from both parties in both chambers who are opposed to a higher sales tax.

So Taylor stripped the increase from HB 3 and offloaded some of the more expensive property tax relief provisions in the bill. The bill no longer includes an expansion in the homestead exemption from school district taxes. It lowers property tax rates by 10 cents per $100 valuation, instead of 15 cents, saving the owner of a $250,000 home $250 instead of $375.

The legislation would still limit the growth in school districts’ revenue due to rising property values, a proposal pitched before session began by the governor. School districts that see their property values significantly increase would have their tax rates automatically reduced to keep tax revenue growth in line. That would now start next year, instead of in 2023.

“The bill before us today has no linkage to the sales tax and is not contingent upon a sales tax,” Taylor said.

Instead, the bill creates a separate “Tax Reduction and Excellence in Education Fund” to fund school district tax relief. State Sen. Kirk Watson, D-Austin, said a working group came up with a plan to get $3 billion from several sources, including the severance tax on oil and gas extraction and an online sales tax.

“This does not increase any taxes of any kind,” he said.

The House and Senate have passed versions of HB 3 that are similar in some ways: Both would raise the base funding per student — a number that hasn’t budged in four years — and would provide about $780 million for free, full-day pre-K for eligible students.

Among the disagreements: how to make sure school employees get much-needed raises. The Senate has prioritized $5,000 pay raises for all full-time teachers and librarians. The House has directed districts to give all school employees about $1,388 in raises on average statewide and designated extra money for raises to be given at districts’ discretion.

Senate Democrats’ efforts to extend those $5,000 raises to full-time counselors and other employees failed along party lines Monday.

Also controversially for some, the Senate includes money providing bonuses to schools based on third-grade test scores and funding districts that want to provide merit pay for their top-rated teachers. Many teacher groups have opposed both, arguing it would put more emphasis on a flawed state standardized test.

State Sen. Beverly Powell, D-Burleson, failed to get an amendment to the bill approved that would strike tying any funding to third-grade test scores.

Teachers, parents and advocates following on social media had paid attention to Powell’s amendment, mobilizing in support through a Twitter hashtag “#NoSTAARonHB3.”

Taylor pointed out that the bill also allows school districts to use assessments other than the state’s STAAR standardized test, which has lately come under renewed scrutiny, with researchers and advocates arguing it doesn’t adequately measure students’ reading abilities. He approved an amendment requiring the state to pay for school districts to use those alternative tests, which he estimated would cost about $4 million.

Read related Tribune coverage

• After Texas Senate committee approves school finance bill, House panel advances sales tax increase to fund property tax relief
• Texas Sen. Larry Taylor unveils new school finance bill, adding $5,000 teacher pay raise
• Texas Senate aligns with House on how much to spend on education, property tax reform

Author: ALIYYA SWABY – The Texas Tribune

After a contentious three-hour public hearing Monday, the Senate Finance Committee unanimously passed a bill that would provide annual $5,000 pay raises for all full-time classroom teachers in the state.

One of Republican Lt. Gov. Dan Patrick’s top priorities this legislative session, Senate Bill 3 is now eligible to be taken up by the full Senate, with a bipartisan group of more than 20 co-authors signed on.

“It will provide an immediate financial boost for teachers, assist in retaining good teachers, and recruit the best and the brightest to this critical profession. I will be moving this bill to the floor and out of the Senate at the earliest possible date,” said Patrick in a statement Monday afternoon.

Testimony on the legislation, authored by the Senate’s lead budget writer, Jane Nelson, R-Flower Mound, at times revealed a fracture in the education advocacy community, with administrators and school district advocates wanting more flexibility on how to use additional money and teachers supporting directed pay increases. Many teachers expressed their appreciation for the legislation while asking for it to be expanded to include librarians, school counselors and support staff.

Nelson said she would look into expanding the bill but stressed that money is limited.

“This one bill is the bill we’re choosing to put out there first because it deals with who we think is the No. 1 factor, besides the parent, in our child’s education,” she said.

But lawmakers did approve some changes Monday that would provide pay raises to charter school teachers — in addition to those at traditional school districts — and prevent school districts from decreasing teacher salaries in future years. They also approved a change that would cover requisite increases in teacher pension costs due to the pay raises, bringing the cost of the bill from $3.7 billion up to about $3.9 billion.

Nelson also said multiple times that this bill would not preclude lawmakers from passing merit pay legislation, which would reward the state’s most effective educators with bonuses. Sen. Larry Taylor, R-Friendswood, chair of the Senate Education Committee, is expected to author a school finance bill that will include that policy proposal.

Marianne Eckley, a Lewisville Independent School District kindergarten teacher, said a pay raise could help cut back the number of jobs she has to work. She said she works three jobs during the week and one job during the summer, and she doesn’t have time to go on vacation with her family.

“My family gives up so much, and I would never give up the teaching profession, but it is very hard every year to commit, thinking I’m hurting my family and hurting my future,” she said.

Some advocates told the Senate Finance Committee that they would prefer lawmakers give districts more control over how they use any additional funding instead of requiring across-the-board raises.

Chandra Villanueva, policy analyst for left-leaning Center for Public Policy Priorities, pointed out that some districts could instead prioritize that funding to recruit educators in subjects for which there is a shortage of teachers.

A few times, Sen. John Whitmire, D-Houston, and Paul Bettencourt, R-Houston, pressured critics of the bill to change their stances.

Sitting in front of the panel of lawmakers, Christy Rome, who represents a coalition of property-wealthy school districts, said she appreciated the focus on teachers but would prefer more local control over how to use the money.

Both Whitmire and Bettencourt said they were “disappointed” by Rome’s stance.

“Y’all are not smart enough … to be for the bill,” Whitmire told her.

Al Rodriguez, an Elgin ISD administrator, received a similar response for his hesitance on across-the-board raises.

“I would urge you to try and find a way to be for it because this is probably going to be the best vehicle,” Whitmire told him.

“If at the end of the day, that’s all there is, obviously we’d be for it,” Rodriguez responded.

Disclosure: The Center for Public Policy Priorities has been a financial supporter of The Texas Tribune, a nonprofit, nonpartisan news organization that is funded in part by donations from members, foundations and corporate sponsors. Financial supporters play no role in the Tribune’s journalism. Find a complete list of them here.

Author: ALIYYA SWABY – The Texas Tribune

Two of the most expensive ways to make Texas voters happy just happen to be the top priorities of the state leaders and legislators assembling next week in Austin.

The state’s school finance system is out of balance when it comes to raising money for education, and out of date when it comes to distributing the money it raises. It’s expensive to re-balance — even when overall spending remains the same — because it pits one set of taxpayers who’ll be paying more against others who’ll be paying less.

And lowering property taxes — a closely related but different financial puzzle — is both expensive and elusive. Most modern attempts to cut property taxes have cost the state a lot of money and left most property owners wondering why the advertised savings never appeared.

Texas’ school finance solution might not be about spending more money, though that was one of the recommendations in a new report from the Texas Commission on Public School Finance, formed to recommend a top-to-bottom rewrite of the state system for funding public education. If there’s already enough money in the system, then the solution may be redistributing it more equitably.

That redistribution, however, is expensive. The state has to raise money on its own if it wants to replace what is currently being raised from cranky property taxpayers. And the state has to figure out who will be the winners and the losers if spending formulas are adjusted, as those “adjustments” mean spending more money on one set of students and less on others.

Even so, the plans advanced so far for public school finance in Texas, as ambitious as some of them are, remain cautiously vague when it comes to sources of new money.

In its final report, that commission said it wanted to: balance local and state funding for public schools; to rework “outdated or otherwise inefficient allotments, weights and programs;” to increase equity in schools “with significantly greater investment in low-income and other historically underperforming student groups;” to reduce the growth of property taxes and reliance on the so-called “Robin Hood” system that moves money from wealthier districts to poorer ones; to encourage adoption of “data-informed best practices” and to immediately spend more money to do it; and to increase per-pupil funding in the future based on the results of those practices.

Even if not one more dime is spent on public education in Texas, leveling the fundraising load would force the state to raise more money. The last rebalancing, in 2006, put the state and local shares of public school spending at about 45 percent each, with the other 10 percent coming from the federal government. Now, the numbers are 55.5 percent local and 35 percent state, with the rest coming from the feds. Roughly speaking, it would cost more than $11 billion to balance that, an amount that would require the state to find that much money somewhere — kind of an early Halloween for some set of taxpayers — in order to lower school taxes for property owners.

It is a financial problem, but it’s also a political one. That local money is raised from property taxes. Texas has the sixth-highest property taxes in the country, according to the Tax Foundation, a Washington, D.C.-based think tank that tracks state and federal tax issues. Property owners vote. Voters are screaming at the state’s politicians to ease the load. One reason state leaders want to cut property taxes is to make those people happy. But it’s a lot to ask: Those same elected servants fear how their masters — you — might react if they increase other taxes to offset cuts in property taxes.

The formula changes are problematic in another way. It costs more to educate some students than others, and state funding for school districts is adjusted to take those differences into account. Changing those outdated adjustment formulas without new money inevitably means spending more on some students and less on others. That will ripple through each school district in a different way — and those ripples will be noted in advance by lawmakers trying to figure out what the changes will do to their schools at home.

It’s as tricky as the property tax part: expensive to tinker with, and fraught with political risks for politicians who are trying — whether you believe it or not — to produce a great public school education for Texans for as little money as possible.

Author:  ROSS RAMSEY – The Texas Tribune

There is a chart on page 205 of the newest edition of a wonky and essential Texas government publication called “Fiscal Size-Up: 2018-19 Biennium.”

You might not be running to look it up — only a particular order of nerds do that — but these numbers from the Legislative Budget Board are going to be the centerpiece of a lot of conversations and arguments over school finance for the next two years.

That agency, co-chaired by Lt. Gov. Dan Patrick and House Speaker Joe Straus, has been producing the reports since 1952 to give lawmakers a periodic look at where things stand in the state’s budget.

This chart tracks what local, state and federal taxpayers have been contributing to public education in Texas over the past decade.

Spoiler: The load has steadily shifted to local property taxpayers.

Some highlights:

• Texas is spending 6.3 percent less per student, in constant dollars (stated in 2010 dollars, adjusted for inflation and population), than it was spending in 2010. Overall spending per student, in constant dollars, was $9,845 in 2010 and is projected to be $9,226 in the 2019 fiscal year.
• The state’s share of public education spending has dropped from 37.6 percent of the total to 35 percent of the total projected for the 2019 budget.
• The federal share has dropped, too, from 16.4 percent of the total to 9.5 percent in 2019.
• The local share — the part funded by property taxes — has risen from 46.1 percent to 55.5 percent.

If you look two years earlier — back to the 2008 school finance budgets that followed the Legislature’s last rebalancing of school budget formulas — some of those shifts are even starker.

In 2008, lawmakers set the balance — the shares covered by each government — at about 44.8 percent local, 44.9 percent state and 10.3 percent federal. Today, those levels are 55.5 percent local, 35 percent state and 9.5 percent federal.

Those numbers are the source material of complaints that the state has shifted the burden of public education to local property taxpayers, all while state lawmakers and budget-writers have been critical of what they call spendthrift school boards and educators.

In actual dollars, spending appears to be way up. The tab for public education in Texas in fiscal 2010 was $44 billion. In 2019, it’s projected to be $55.4 billion. That’s a 25.8 percent increase.

Over that same period, however, the student population grew to 5.2 million from 4.5 million. And when you extract inflation, overall spending dropped 6.3 percent in constant dollars: What was $44 billion in 2010 slides to $41.2 billion in 2019 — even as about 700,000 more kids are added to the school population.

That’s a lot to chew. A couple of interim studies are trying to make sense of school finance in advance of the legislative session that begins in January.

It’s not easy work, if only because the numbers are so big. If you applied 2008’s shares of the public education load to today’s numbers, the system would need $6 billion less from local school districts, about $5.5 billion more from the state, and about $438 million from the federal government.

Those are one-year numbers, and it’s a running problem — not a one-time fix. To keep the state and local shares at about 45 percent each, state lawmakers would have to find $9 billion for the next two-year budget.

Here’s another spoiler: They don’t have that kind of money lying around.

Correction: An earlier version of this column didn’t account for population growth as part of the constant-dollar spending on public education. That spending grew 15.6 percent — not 18.9 percent — from 2010 to 2019.

Author: ROSS RAMSEY – The Texas Tribune

A state panel responsible for proposing improvements to Texas’ embattled public school finance system is facing criticism from an unexpected source: some of its own members, who say the panel’s hearings seem geared toward a predetermined outcome of making schools do more with their current funding.

Texas school districts have repeatedly sued the state over the past few decades, arguing it hasn’t provided enough money to ensure public school students an adequate education. During the 2017 session, lawmakers failed to make immediate changes to how the state allocates money to public schools — and instead agreed to create a 13-member commission to undertake a longer-term study.

That panel, which includes appointees from House Speaker Joe Straus, Lt. Gov. Dan Patrick, Gov. Greg Abbott and the State Board of Education, has held four hearings since it was assembled in January. Its next hearing is scheduled for Monday.

In those hearings, some commission members argue, presentations by experts have been skewed toward making the case that schools do not necessarily need more money to produce better outcomes for students.

“There’s a steady stream of presenters … trying to convince us that there’s enough money in the system and that adding more will not show results — that districts are essentially spending the money incorrectly,” said State Rep. Diego Bernal, D-San Antonio, one of four members appointed by Straus.

He said the commission has also heard from school leaders with innovative ideas, such as how to keep the best teachers at the most challenging schools and how to use full-day pre-K to get students at an academic baseline early in life.

“Those two things without question cannot be funded or sustained with the current funding levels we have,” Bernal said. “Even the districts that piloted it said they were about to run out of money.”

But the panel’s chair, Scott Brister, disagreed that the hearings were staged for any predetermined outcomes. He said the Texas Education Agency’s staff has worked to bring experts who can provide a framework for how school finance works and what an adequate education looks like.

“You’ve got to figure out what you would like the schools to look like before you figure out whether you need more money or less money or where that money’s going to come from,” said Brister, a former state Supreme Court justice. Appointed to the commission by Abbott, Brister was the sole justice to dissent in a 2005 lawsuit brought by school districts claiming the school finance system was inadequate and inefficient. The court ruled in favor of the districts and forced lawmakers to overhaul the funding system.

“I’m not interested in spending more money and getting no change. What’s the point of that?” Brister said this week. “The Constitution requires school districts to be free and efficient. … Surely it means you don’t waste money on stuff that doesn’t work and doesn’t make a difference. That’s one of our constitutional standards. We have to consider it.”

Over the past decade, the state has decreased its share of public education funding, allowing rising local property taxes to make up the difference. Currently, less than 40 percent of school funding comes from the state, while local property taxes pay for more than half. In 2011, lawmakers cut more than $5 billion from schools to close a budget deficit and never completely restored the money.

Texans will have their first, and potentially only, chance on Monday to publicly address the commission. Texas school leaders and public education advocates are expected to spend several hours, if not the whole day, testifying that they want the state to invest more money in public schools, instead of relying on local property tax revenue, and that they cannot educate students on the budget they have.

“Only after you get past that question [of adequate funding] do you get to talk about how to spend that funding,” said Monty Exter, a lobbyist at the Association of Texas Professional Educators, who plans to testify Monday. Exter said he sees three different groups on the commission: one that wants to increase funding to public schools, another that believes public schools are important but that increasing funding isn’t feasible, and a third that wants to defund public schools.

“My argument is that you haven’t funded us enough to get better outcomes,” said Nicole Conley Johnson, a member of the commission and chief financial officer of Austin ISD.

According to the TEA, Austin’s school district is expected to pay the state $545 million this school year to help subsidize poorer school districts, through a function of the school finance system nicknamed “Robin Hood.” Austin ISD has the highest Robin Hood payment in the state and has gone through several rounds of budget cuts over the last few years.

Johnson, who was appointed to the commission by Straus, agreed that the commission hearings seem to be skewed toward efficiency: “They want more for the same amount of resources.”

During the inaugural commission hearing in January, former Texas Supreme Court Justice Craig Enoch showed members a chart of 2011 student state test scores for school districts mapped against the amount of money those districts spent.

“There is a pattern here, but the pattern is not based on how much money is available,” he said. “In fact, the school district that performs the best is the school district that gets $2,000 less per student than the average funding.”

He suggested the state look into why certain school districts do better with less funding, and why others do worse with more. “Scholars and education experts are divided on the extent to which there is a demonstrable correlation between educational expenditures and the quality of education. The thing that matters is student outcomes,” based on test scores or high school graduation rates, he said.

Johnson and fellow commission member Doug Killian, the superintendent of Pflugerville ISD, pushed back on Enoch’s chart, pointing out the data was outdated and not comprehensive.

Chandra Villanueva, policy analyst at the left-leaning Center for Public Policy Priorities, said the commission should be trying to ask what schools need to educate students, instead of asking what they can do with existing resources. “Let the Legislature decide if they want to raise taxes or shift other priorities in the budget,” she said. “I don’t think the [commission] should prematurely tie their hands.”

The commission will split into three subcommittees to brainstorm recommendations to the Legislature at the end of the year on where the state should get revenue to fund public schools, how it should overhaul existing formulas to allocate funding more equitably, and what it should expect its public school students to achieve. Each subcommittee will get to decide whether and how to include the public in its discussions, according to Brister.

Sen. Paul Bettencourt, a Houston Republican chairing the panel’s revenue subcommittee, said it’s too early to say what those recommendations will look like.

“We’ve been drinking from the fire hose on public policy. I haven’t had any discussions with anybody yet to step back and get out of the line of fire and see where we are now. For me personally, I’m still in listening mode,” he said.

Disclosure: The Association of Texas Professional Educators and the Center for Public Policy Priorities have been financial supporters of The Texas Tribune, a nonprofit, nonpartisan news organization that is funded in part by donations from members, foundations and corporate sponsors. Financial supporters play no role in the Tribune’s journalism. Find a complete list of them here.

Read related Tribune coverage:

• Texas panel set to discuss school finance fix. Can they iron out lawmakers’ disagreements?
• Amid state cuts, a Texas high school football coach got a $20,000 raise. His district says he’s earned it.
• At one small rural school, less state money means everyone does more

Author: ALIYYA SWABY – The Texas Tribune

Whether you feel sorry for them or not, Austin ISD property taxpayers will be sending $533 million of their local school taxes to the state for redistribution to poorer districts in the next school year.

That means that about 35 percent of the local school taxes collected in that district are spent elsewhere — the biggest “recapture” rate in the state.

And as far out as that might seem, it’s a sign that the state’s school finance system is working just the way state officials designed it to work. The state government puts up some money. The federal government puts up some money. Local school districts put up some money. They even out the spending per student, making (somewhat outdated) adjustments for costs of living, for different kinds of students with more expensive educational needs and for local districts’ ability to raise money from property taxes.

The better-off districts contribute some of their locally raised money to the districts where property tax revenue doesn’t cover the local cost of schools.

In Austin — the poster child for recapture in Texas right now — the school district is telling taxpayers they’ll be sending $2.6 billion to the state over the next five years. Property values are soaring and have been for years, and even in a better-balanced system, AISD would probably be putting money into the pot for school districts elsewhere.

To make matters worse, the state’s per-student spending has dropped over the last decade as its overall share of public education spending has dropped — to about 38 percent today from about 45 percent in 2007, according to the Legislative Budget Board.

That shifts even more of the load to local school districts — and it increases the amount of money taxpayers in AISD and other recapture districts have to raise for use in other school districts around Texas.

If the state raised its share, local districts would have less to pay. Recapture districts would be sending less to the state. Maybe — and this is probably fantasy — taxpayers would have less to complain about at town hall meetings when they’re chewing out their public officials over high taxes.

If state lawmakers can find the money to do it and get past their partisan and personal differences in these last days of the special session, they could increase state funding for education by up to $1.8 billion.

That money is hard to find, in part because so many legislators and honest number-crunchers either object to using the state’s savings account — known as the Rainy Day Fund — or to deferrals and other accounting tricks that can balance spending in the short term but have to be repaid later.

The Rainy Day solution eats into savings — and does it for ongoing expenses, to boot. The other — deferrals and accounting tricks — increase the size of the hole (already estimated at $7.9 billion by the Texas Taxpayers and Research Association) that will face budgeteers when the next Legislature assembles in January 2019.

Lawmakers are also talking about forming a commission that would study school finance, presumably to burn down the current setup and build a shiny new one in its place. Gov. Greg Abbott could put a commission like that together if the Legislature fails — former Gov. Mark White, who died last week, did just that in the 1980s to push the overhaul of public education generally regarded as White’s grand achievement.

If recapture taxes were separated from school taxes, Austin ISD taxpayers would see that they’re paying more on recapture than they are toward Travis County — and almost as much on recapture as they’re paying the city of Austin. Next year, according to Austin Mayor Steve Adler, those taxpayers will be sending more property tax dollars to the state than they do to the city.

That has public officials in places like Austin considering some creative financing of their own.

That’s got city officials talking publicly about raising taxes to move some non-educational school spending from the school district’s budget to the city’s budget — think maintaining buildings or watering lawns — to keep that money out of the reach of state school finance formulas. The idea here is that more of the money raised locally would escape the state’s recapture. Yes, city taxes would rise. But school taxes would drop. And less money would go to the state. It’s original — give it that — but it’s not something you’d see coming from a good government think tank.

Here’s a measure of how dysfunctional school funding has become in Texas: Austin’s ludicrous workaround would be an improvement.

Read related Tribune coverage:

• With a little more than a week left for this special session of the Texas Legislature, lawmakers are preparing closing arguments — and obituaries — for their pet issues. [Full story]
• An eye-opening proposal to kill the local school property tax in order to force Texas lawmakers to build a new school finance system won unanimous approval Thursday from the House’s tax-writing Ways and Means Committee. [Full story]
• Texas legislators would love to lower your property taxes, but none of the proposals they’re considering in the special session would do that. [Full story]

Author:  ROSS RAMSEY – The Texas Tribune

The Texas House on Friday passed a package of bills that would put $1.8 billion into public schools and help out struggling small, rural school districts.

House members voted 130-12 to approve the lower chamber’s main piece of school finance legislation, House Bill 21, just as they did during the regular session.

The House also voted 131-11 to pass House Bill 30, which would fund the school finance bill by putting $1.8 billion into public schools. Once the House gives the measures final approval, they will head to the Senate.

The funds cited in the legislation would come from deferring a payment to public schools from fiscal year 2019 to 2020, and would allow an increase in the base funding per student from $5,140 to $5,350 statewide.

Lt. Gov. Dan Patrick has called this payment deferral mechanism a “Ponzi scheme.”

House Speaker Joe Straus lauded the House’s vote.

“The Texas House voted Friday to support our schools, relieve the burden on local property taxes and begin fixing our broken education finance system,” he said in a statement. “With House Bill 21, we have a great opportunity to help schools and address the biggest cause of higher property-tax bills.”

The Texas Supreme Court ruled last year that the school finance system was in need of serious reform, but ultimately constitutional. Gov. Greg Abbott added school finance reform to the agenda a few days into the special session in July.

The House Public Education Committee’s chairman, state Rep. Dan Huberty, R-Houston, the author of HB 21, has pushed his bill as a preliminary step to fixing a beleaguered system for allocating money to public schools.

“You cannot have property tax reform unless you have school finance reform. That is just a fact,” he said Friday. “We have the time to get this done. We just have to have the will to get this done.”

HB 21 would increase the base per-student funding the state gives to school districts, in part by increasing funding for students who are dyslexic and bilingual. It would also gradually remove an existing financial penalty for school districts smaller than 300 square miles, which was originally intended to encourage them to consolidate.

When Huberty brought HB 21 back in the special session, he added a controversial provision: funding to help charter schools build new facilities. Leaders of education associations opposed that decision, arguing legislators should look to fund traditional public schools before charter schools. Huberty removed that provision before bringing it to the House for Friday’s vote.

Huberty’s bill would also create a transitional $200 million grant program over the next two years to help school districts that lose money under his bill. Many of those districts rely on a state aid program designed to offset a decade-old tax cut. Additional State Aid for Tax Reduction, or ASATR, is set to expire in September; about 250 small, rural school districts depend on it to keep their doors open.

The House voted 67-61 Friday against approving House Bill 22, a separate measure that would have continued ASATR for two years before letting it expire in September 2019. Some school districts have warned they might have to close without the program, which totaled about $400 million this year.

Meanwhile, the Senate has tucked a few provisions to increase funding for public schools into a larger “private school choice” bill, funded by deferring payments to health care companies that provide Medicaid. The House has repeatedly voted against subsidizing private school tuition with state funding.

Read related Tribune coverage:

• The Texas Senate passed a bill that would provide funding for teacher bonuses and retirement benefits, slashing a controversial provision that would require school districts to increase teacher salaries without additional state money. [link]
• In what seems to be an overture to the House, Gov. Greg Abbott added two new education-related issues to his special session call Thursday: school finance reform and increased benefits for retired teachers. [link]
• Senate Education Chairman Larry Taylor on Wednesday afternoon said that he would not appoint conferees to negotiate with the House on a proposed school finance overhaul. “That deal is dead,” he said. [link]

Author:  ALIYYA SWABY – The Texas Tribune

A reinterpretation of the state’s school finance law will leave $100 million in the accounts of some of the state’s property wealthy districts — and will leave a hole of that size in an already tight state budget.

After reconsideration of an 18-year-old law, state education officials are adjusting their school finance calculations in a way that could save several dozen school districts roughly $100 million — while costing the state the same amount in revenue.

One of the apparent beneficiaries is Houston ISD, where the change means taxpayers will be sending about $60 million less to the state for public education than they had expected.

At issue is a calculation for recapture — the state’s term for the money that districts with higher property wealth send to the state for use in districts with lower property wealth.

It’s more commonly known as the Robin Hood system of school finance.

Some of those rich districts — “rich” here refers to the value of the districts’ property and not the income of its residents — have adopted homestead exemptions that are bigger than the exemptions mandated in state law. All school districts in Texas have to let homeowners deduct $25,000 from their taxable property values, but districts are allowed to raise those exemptions up to 20 percent of a home’s value.

Not all districts do that, and not all of those that do that are property rich. But some — including Houston ISD, the biggest one in the state — offer the higher homestead exemptions and are also subject to recapture, and they’re the ones subject to the new calculations from the Texas Education Agency.

In a letter sent Feb. 1 to school administrators, the agency’s associate commissioner for school finance said that starting in the current school year, TEA will include half of the money the districts have forfeited in optional homestead exemptions when calculating how much recapture money those districts should pay. That’s the agency’s new reading of a law that’s been on the books since 1999.

“The commissioner thinks he has the latitude to give them half credit for this,” said state Sen. Paul Bettencourt, R-Houston.

The recalculations would trim those districts’ bills considerably — by $100 million in rough numbers. In addition to Houston ISD, the unofficial list of beneficiaries of the new calculation include Spring Branch ISD, Highland Park ISD, Lake Travis ISD and Comal ISD. Officials with TEA said they have not yet calculated exact amounts for each district but said the $100 million is a reasonable estimate of the total cost this year.

It’s a boon to those districts and a hit on the state’s tight budget. “This will reduce the recapture/detachment demands on Houston ISD by approximately $60 million, and on school districts other than Houston ISD by approximately $40 million this year — a total hit to an already challenged state budget of $100 million and likely to increase in years going forward,” wrote Sheryl Pace, an analyst for the Texas Taxpayers and Research Association.

In Houston, it eases the size of a pending property tax headache. Houston ISD is new to Robin Hood, and voters there — asked for the first time ever in November’s election — said they did not want to send money to the state for use in other districts. In Houston ISD’s case, that’s an estimated $165 million.

(Actually, they voted on this murky language dictated by state law: “Authorizing the board of trustees of Houston Independent School District to purchase attendance credits from the state with local tax revenues.”)

That triggered an unused and breathtaking provision in the school finance laws that requires the state education commissioner — currently Mike Morath of Dallas — to take away enough of Houston ISD’s commercial property tax base to raise $165 million for other districts.

Unless something changes — there have been calls for a quick election where the voters might reconsider — that means Morath will start with the most valuable commercial properties in Houston ISD and assign them to poorer districts until he’s taken away enough property to cover Houston ISD’s $165 million Robin Hood bill.

Last week’s letter doesn’t erase that bit of accounting violence, but it would trim the size of the amputation; instead of sending $17.4 billion in value from its commercial property tax rolls to the rolls of poorer districts, Houston ISD would send $11.1 billion, according to estimates from the taxpayers and research association. The owners of those severed properties could end up attached to districts with higher property tax rates; it’s fair to expect some noise if they do.

Houston ISD said Friday evening that the board will consider a do-over and will vote next Thursday on whether to hold another election on May 6 to give voters an opportunity to reverse that November vote. Bettencourt said he thinks the district ought to just pay what it owes in recapture money and leave the property tax rolls alone.

“I’m glad they’re coming to their senses,” he said.

That’s not the end of this. In its letter to districts, the TEA tried to protect itself from liability for recapture payments made to the state during the 18 years that the law was in effect before the agency discovered it had been calculating incorrectly. “This change is effective for the 2016-17 school year (and state FY2017) only and forward and will not be applied retroactively to prior fiscal years,” the letter said, in bold.

Lawyers for school districts that overpaid the state might want to have a peek at that. Legislators, too.

“I think there are going to be lots of questions on Monday morning,” Bettencourt said. “I’ll be asking some of them.”

More columns from Ross Ramsey:

• Most states have dropped straight-ticket voting, but not Texas. There’s another attempt coming in the current legislative session, and it’s got some high-level supporters.
• The Texas Legislature is primed to go, but this is going to be a session outside the limelight. The Texans are busy, but the spotlight is on the new administration in Washington, D.C.
• The debate over education savings accounts and other voucher programs is only peripherally about educating kids. It’s really a debate about money. 

Author:  ROSS RAMSEY – The Texas Tribune

Editor’s note: If you’d like an email notice whenever we publish Ross Ramsey’s column, click here.

At least once a year, an official from a property-wealthy Texas school calls Christy Rome and tells her they’re just not going to do it. They don’t want to send a big chunk of their tax dollars to the state, even though they’re required to do so under a state law meant to buoy poorer districts.

“I can’t recommend that,” the Texas School Coalition chief always tells them, citing a host of potentially worse financial consequences.

The resistance dates back to the mid-1990s, when Texas lawmakers — under the gun of a court order — enacted a plan known as Robin Hood that was meant to ease vast funding inequities among school districts fueled by a property tax-based funding system.

For years, getting rid of the scheme altogether was the primary legislative goal of Rome’s 140-member coalition of school districts, which has unsuccessfully fought Robin Hood in the courts. Now, she says, the goal is simply to rein it in.

With major pushback from property-poor schools and decades of case law reinforcing the take-from-the-rich, give-to-the-poor concept, whether that will happen is a big question.

But Rome says the group is hopeful for reform during the 2017 legislative session. Resistance from property-wealthy schools has exploded, along with the number of districts — including very big ones — required to pay up under the Robin Hood plan.

The frustration is particularly rife in the state’s largest school district, Houston, which is making its first-ever “recapture” payment this year because the state now considers it too property-wealthy. The obligation — estimated at more than $160 million — drove a $95 million shortfall the district is closing by cutting funding to some campuses, along with administrative and tutoring positions and a controversial teacher bonus program.

Officials there are calling for a vigorous lobbying effort, as are those from other large and politically powerful school districts such as Austin, which has seen recapture payments skyrocket over the years amid rapid property value growth and declining student enrollment. The state’s sixth-largest district is expecting to send more than $400 million to the state this year.

Robin Hood has “far exceeded its life-hood as a law,” Houston school board trustee Greg Meyers said recently.

House Speaker Joe Straus has also ordered state representatives to study Texas’ “increasing reliance” on Robin Hood as a method of funding public education ahead of the 2017 legislative session, which begins in January. The San Antonio Republican’s directive came in early June, just after a Texas Supreme Court ruling upheld the state’s method of funding public schools as minimally constitutional and urged state lawmakers to enact reforms.

Rome said the coalition had hoped the political motivation to banish, or at least change, the system would bubble up 16 years ago when the Austin district began making recapture payments.

“That wasn’t the tipping point,” though, she said. “Maybe Houston will be.”

The coalition will face fierce resistance from property-poor schools, represented by the Equity Center, which agree with wealthier districts that the state has grown too reliant on local tax revenue to fund public education and underfunds schools in general. But they also believe Robin Hood is crucial to easing funding inequities. The system is far kinder to property-wealthy districts even if they have to make recapture payments, said Equity Center Executive Director Wayne Pierce.

Contrary to popular belief, he said, that money isn’t funneled directly to poor districts but instead into a big pot of money distributed to all of the state’s more than 1,200 public and charter schools. And he said schools like Houston and Austin still get hundreds more dollars per student than the average school district.

“Recapture is a salvation to public education,” Pierce said. “Those that pay it are still funded at higher levels and have lower tax rates, so it’s not hurting those schools but it is helping the state.”

The only way the Equity Center would support eliminating Robin Hood, Pierce said, is if the state totally changed the way it funds public schools, replacing local property taxes with a statewide property tax or other statewide tax — a concept that has had little to no political traction.

“Houston’s problems are more important than other people’s problems for political reasons,” he added.

But even some of those who are most frustrated with Robin Hood aren’t hopeful much will change.

State Sen. Kirk Watson, an Austin Democrat, says the Republican-dominated Legislature is more interested in attacking local entities for skyrocketing property taxes than acknowledging that rising recapture payments, and property values, have decreased by billions of dollars the amount of money the state is required to spend on public education every year. He notes that the average Austin homeowner’s annual tax bill is $1,400 higher because of recapture.

“I’m most of the time the glass-is-half-full kind of guy, but I’m not seeing any momentum toward doing anything other than the practice of blaming others and not fixing the system,” Watson said.

Rome acknowledges the coalition faces an uphill battle. Robin Hood has become a reliable and ever-increasing source of income for a thrifty Legislature that is eager to cut taxes whenever possible, she said. It also is facing declining state revenue amid a slump in oil prices.

Recapture payments now make up a sizable chunk of what the state spends on public education, with more than $2 billion in payments expected in 2017. (That is notably more than $1.2 billion the Texas Lottery generates annually for public schools, Rome likes to point out.)

The Robin Hood program started out small, with only 34 school districts paying up — mostly smaller rural ones near big industrial plants or other major tax-generating properties. But as property values have skyrocketed across the state, an increasing number of school districts have hit the maximum level of wealth generation set in state law. Most of them are required to send money to the state because they raise more tax revenue than they are allowed to keep.

Of the state’s more than 1,200 school districts and charters, 257 are expected to make recapture payments this school year. That is up from 142 districts that made recapture payments in 2006.

“We just feel like it’s gotten out of hand,” Rome said. “I don’t think anyone ever imagined Robin Hood would grow to the level it has now.”

Lawmakers have tweaked the system a few times over the decades to ensure it includes only the most property-wealthy districts, thus saving some schools from recapture payments. (Dallas ISD, for example, is doing everything it can to avoid having to pay up.)

As the number of school districts required to pay recapture has grown, along with the size of payments for many schools, so has the resentment.

It was on full display at a recent meeting of the Houston school board board, where trustees grudgingly voted to place an item on the November ballot that would authorize the district to send a recapture payment to the state. Some trustees have said they may encourage voters to reject the measure, in essence placing a bet that the Legislature will bail out the district next year. But they also acknowledge its failure could have negative consequences — namely, the education commissioner would then have the authority to sever select commercial buildings from the tax rolls.

“I think at this point what I would love to see is a very, very concerted — very concerted — effort to go up to Austin to talk to our legislators to continue to educate them on the impacts,” said Meyer, who represents southwest Houston on the board. “Because I can promise you $162 million — that’s going to affect kids. That will affect teachers.”

State Sen. Paul Bettencourt, a Houston Republican who has lambasted local school districts for a rising debt load that they blame on insufficient state funding, warned that HISD will be forced to hike taxes if voters reject the recapture measure. He described trustee resistance as retaliatory following the recent state Supreme Court ruling that upheld the state’s school finance system.

“They want to make a major statement, but making a major statement could have major consequences associated with it,” he said.

Many tiny, rural school districts in South Texas’ Eagle Ford Shale that saw property tax values skyrocket during the oil boom are having to pay up for the first time, too. These districts are frustrated that recapture payments lag a year behind and so don’t reflect their current dire financial state during the oil bust.

“We’ve got to now make sure we’re starting to talk to state lawmakers and legislators about where we are,” Runge schools interim superintendent Pam Seipp told The Texas Tribune in an interview this summer.

The situation is “more or less a disaster,” said Cuero schools interim superintendent Ben Colwell.

Read more coverage about how public school funding in Texas:

• Oil patch schools are facing a budget nightmare during the oil bust.
• Texas senators are exploring whether to fund schools based on academic performance rather than attendance.
• The Texas Supreme Court in May deemed the state’s method of funding public schools as minimally constitutional and urged lawmakers to enact reforms.

Author: Kiah Collier – The Texas Tribune

Citing a recent Texas Supreme Court decision that upheld the state’s public school funding system while deeming it “undeniably imperfect,” state House Speaker Joe Straus on Thursday ordered representatives to study the school finance system and recommend reforms before the 2017 legislative session.

“We can improve educational quality while also making our school finance system more efficient,” Straus said in a news release. “Ignoring some of the problems in our current system will only make them worse. School finance reform never comes quickly or easily, which is why this work needs to continue sooner rather than later.”

Straus requested that the House Public Education and Appropriations committees examine the impact of a soon-expiring provision that has allocated money to school districts to help offset mandated property tax cuts. He also asked the panels to study “the use of local property taxes to fund public education and its effects on educational quality and on Texas taxpayers.”

“As property values have increased, more school districts have become subject to recapture, meaning that some of their local property tax dollars are sent back to the state and distributed to school districts with less property wealth,” according to the news release. “For example, the Houston Independent School District is now facing the prospect of sending a recapture payment of $175 million to the state in 2017. Since 2006, the number of school districts paying recapture has increased from 142 to 238.”

“It’s important that we keep local tax dollars in local districts as much as possible, while still ensuring that all students have access to quality public schools,” Straus said.

Straus is the first statewide leader to call for action following the state Supreme Court’s unanimous decision nearly three weeks ago that upheld the state’s public school funding system as constitutional, while also urging state lawmakers to implement “transformational, top-to-bottom reforms that amount to more than Band-Aid on top of Band-Aid.”

He already has ordered the House to study the Cost of Education Index, one component of the school finance system, along with the debt load and facility needs of fast-growing school districts.

“Combined with those studies, the newly issued charges will allow the House to take a thorough look at school finance when the Legislature convenes in January 2017,” according to the news release.

Straus’ move drew praise from at least one Democratic lawmaker and school and progressive groups that worried lawmakers would not address school finance absent a judicial mandate.

“We hope that Speaker Straus’ action on this issue prompts legislators to seek out and consider forward-thinking solutions that will foster a public education system worthy of our children, not a system that meets the bare minimum,” said Texas Association of School Boards Executive Director Grover Campbell said in a statement.

“I am grateful that the House will be using valuable time during the interim to determine and discuss potential school finance recommendations,” state Rep. Donna Howard, D-Austin, a member of the House appropriations committee, said in a statement. “I am ready to join my fellow committee members and move past partisanship, look beyond our local districts, and find a school finance solution which works for all Texas children.”

The left-leaning Center for Public Policy Priorities expressed gratitude while suggesting additional studies.

“Studying the level of funding required to meet today’s academic standards would be one important way that legislators, guided by data, could help fulfill our promise to the next generation,” Executive Director Ann Beeson said in a statement.

Disclosure: The Texas Association of School Boards and the Center for Public Policy Priorities have been financial supporters of The Texas Tribune. Find a complete list of donors and sponsors 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

AUSTIN, Texas – Teachers and other educators are raising concerns that a recent Texas Supreme Court ruling on the state’s school funding system lets the Legislature off the hook for fixing it.

The state’s high court found the system to be flawed but constitutional, leaving no mandate for state lawmakers to come up with a better system.

Lonnie Hollingsworth Junior, general counsel with the Texas Classroom Teachers Association, says while the court outlined specific problems with the current system, it did not order elected officials to make changes.

“It has usually taken a court ruling in the past to push the Legislature to do what they needed to do, which was to fund the public schools in an equal and equitable and an adequate fashion,” says Hollingsworth. “But at this point, they don’t have that hanging over their heads.”

A state district court ruled the current finance system unconstitutional in 2014, saying it caused major disparities between property-rich and property-poor districts.

Hollingsworth says the state Supreme Court’s ruling set that aside, meaning the inequities will remain and that Texas property owners will continue to be burdened by ever-higher property taxes.

Hollingsworth says in recent years, the Legislature has cut school funding at the state level, leaving local districts to come up with the funds to cover costs. However, he says local officials’ hands are often tied by laws blocking tax-rate increases without voter approval.

“If you look through the court decision, it enumerates all the ways that our current system is deficient and it goes through and outlines it, and says while the system is arcane, not perfect and needs changes, it’s the Legislature’s duty to fix it,” says Hollingsworth.

Republican Gov. Greg Abbott hailed the ruling, saying it will prevent the courts from “micro-managing” the state’s school systems.

The Legislature is not scheduled to reconvene until January of next year.

Author: Mark Richardson – Texas News Service