School Funding is Last, Trickiest Piece of Budget Puzzle (TX)

May 23, 2011

The one piece of legislation that could still unravel the Legislature’s carefully knit-together budget deal landed on the doorstep of the House shortly before midnight Friday.

The Senate’s long-stalled plan to apportion a $4 billion reduction in school aid had been suddenly resurrected, passed and zipped over to the House.

But when Senate Bill 1581 hits the House floor Monday for debate, state Rep. Jimmie Don Aycock, the bill’s sponsor, said he will have to overhaul it or kill it.

“My intent will be to heavily change this bill … especially the (school) finance piece,” Aycock, R-Killeen , told his colleagues on the House Public Education Committee at a hastily called late-night meeting that ended early Saturday morning. The bill also includes other education-related budget changes, such as a reduction in the state’s contribution rate to the Teacher Retirement System of Texas.

With one week left in the legislative session, the school finance measure is one essential piece of the elaborate budget puzzle that is still up in the air after the House and Senate finally agreed on Friday to spend $80.6 billion in state money over the next two years.

It is a complicated mix of politics and math that will determine how the state divvies up the $32.5 billion pot of aid among the nearly 5 million students in Texas public schools.

Lawmakers typically spend months concocting a school finance solution, but this time the House is apparently going to write it on the fly.

Failure to get a school finance plan in place before May 30 could force lawmakers back to Austin for a special session this summer, a political embarrassment that the Republicans who run the state would like to avoid.

Democrats aren’t likely to help House leaders pass such a deep cut to public schools.

And rank-and-file members of the Republican supermajority in the House might have priorities other than expediency: protecting their school districts.

At issue is how various school districts were treated under the 2006 school finance reform package, a widely panned change enacted in the wake of a Texas Supreme Court ruling.

The court said lawmakers had enacted an unconstitutional statewide property tax. Lawmakers responded by reducing local school property tax rates by one-third and dedicating more state money to the schools to replace the local money.

So no school district suffered as the balance of state and local money changed, lawmakers essentially froze the level of per-student revenue at what each school district was getting in 2005-06. It was supposed to be a short-term solution but has persisted for five years.

That snapshot captured some districts at an ideal moment, while others were not so lucky. Small and rural districts believe they got a bum deal while many suburban and urban districts have been living high on the hog.

The floor debate could end up pitting the school districts that do well under the current system against those that don’t, Aycock said, “unless we’re very, very careful.”

On the Senate side, the GOP has already splintered over school finance.

The Senate plan written by Sen. Florence Shapiro, R-Plano , would share the pain among all the school districts, though those on the top end of state aid per student would take a harder hit.

Shapiro said the plan wasn’t perfect but was necessary because of the budget situation.

Sen. Bob Deuell, R-Greenville , said that approach was wrongheaded and ensured that “kids in higher-funded districts are worth more than the kids in lower-funded districts.”

“We shouldn’t bring the underfunded schools down at all,” Deuell said. “They’ve been underfunded for five years.”

A similar argument is being made by many House members, who have embraced a proposal by state Rep. Scott Hochberg, D-Houston , the widely recognized legislative expert on school finance.

Hochberg’s plan clears out all the clutter in the school finance system that remains from the 2006 reforms and streamlines the system for doling out school aid.

But the cuts are pretty devastating to some districts, and that has caused other lawmakers, particularly those from suburban and urban areas, to balk.

Public Education Committee Chairman Rob Eissler, R-The Woodlands , believes he has the Band-Aid solution. He simply lops off about 6 percent for every school district.

“The approach I have is the most mechanical, least emotional,” Eissler said.

It will get school districts through the next two years and give state leaders an opportunity to concoct a more lasting solution, he said.

But critics say such an approach continues the widely acknowledged disparities that exist in the current system.

Promises for more permanent solutions have been made before and then broken. But the school finance mess that lawmakers will face in 2013 might very well force them to live up to that promise this time.

Eissler said Monday’s school finance fight has the potential to derail the legislative session, but he doesn’t believe it will.

“The plan most likely to get us out of here is the one designed to get us out of here,” Eissler said.