On the Lege

The Beginning of the End

Gov. Rick Perry (l) insisted the new school financing plan 
will solve the funding crisis; his November gubernatorial 
opponent, Comptroller Carole Keeton Strayhorn (r), says 
it just pushes public schools' money woes a little further 
into the future.
Gov. Rick Perry (l) insisted the new school financing plan will solve the funding crisis; his November gubernatorial opponent, Comptroller Carole Keeton Strayhorn (r), says it just pushes public schools' money woes a little further into the future.

On Monday, the Legislature wrapped up a special session on school finance a day early, and Gov. Rick Perry declared, "Mission accomplished!" Then Comptroller Carole Keeton Strayhorn called a press conference and said, "No, it isn't!"

"Is, too!" Perry shot back. "Not!" Strayhorn retorted, and then covered her ears before Perry could answer. Kids today!

In case you blinked and missed the excitement, lawmakers accomplished this week what they've failed to do in so many sessions past – approve a new education-funding package that doesn't look half bad on paper. The new tax plan, which Perry said he will sign "with great passion and joy," will cut school property taxes 33% over two years, give teachers a $2,000 pay raise, and provide an average 4% increase in new money for school districts, with low-income districts getting additional state aid without wealthier school districts feeling quite the same squeeze from the "Robin Hood" days of old. Also, the plan establishes a uniform school start date on the fourth Monday in August, beginning in 2007.

The Lege came up with the plan by incorporating many of the recommendations of a Perry-appointed tax reform commission, headed by former Democratic Comptroller John Sharp. Now, instead of over-relying on property taxes to fund schools – a tax system which the Texas Supreme Court ruled unconstitutional and gave lawmakers until June 1 to revise – the state will draw much of its school funding from three new revenue sources – a new business tax (which won't take effect until 2008), a $1 tax hike on smokes, and a new tax on used-car purchases.

Critics call the plan a short-term fix that, as Strayhorn sees it, "punts our problem just past the November election." Strayhorn is sounding the alarm now, not just because she's doing her job as comptroller, but because she's running against Perry in November as an independent candidate. And also because she's a perpetual thorn in Perry's side.

House Democratic leaders agree with Strayhorn's numbers, which show the Perry plan leading Texas into another multibillion-dollar budget hole over the next few years. In Strayhorn's words, taxpayers will be stuck with a "$23 billion hot check" in five years. For political purposes, Democrats are steering clear of the comptroller's numbers and relying instead on a similar analysis by the nonpartisan Legislative Budget Board. So House Democrats rolled out a report card Tuesday that has Republican leaders earning a string of F's for their work this session. "What they've done is pass a bill that has things that look good," said Waco Rep. Jim Dunnam, "but it's not going to work. It's the biggest bait-and-switch that I've seen since I've been in the Texas Legislature."

While Dems, and even Perry, applauded a provision added two weeks ago that would have given seniors and disabled Texans some added property tax relief, the amendment suffered a last-minute cut in the final package. The loss of that amendment, said Austin Rep. Elliott Naishtat, means that well over a million citizens won't see proportionate cuts in their property tax bills.

As for education, well, we all know how the Republican leadership feels about public schools. The Lege essentially guaranteed that the lion's share of new tax revenue will be dedicated to property tax cuts. "There is in this bill no long-term funding source for schools," Rep. Scott Hochberg, D-Houston, said. "We have not changed anything in that regard, except to take the promise of a long-term funding source and dedicate it to tax relief in a way that prevents it from being used for schools."

The Texas State Teachers Association and the Texas Federation of Teachers also panned the school package. TFT's Linda Bridges offered this statement: "We need lasting solutions for our school finance problem, not a quick sugar fix that leaves our schools on a starvation diet for the future. When the legislature comes back in session next January, lawmakers will face a budget crisis created by the unfunded promise of property-tax reduction made in the bills passed this session." A similar critique came from the Center for Public Policy Priorities, which predicted gloom and doom in the next budget cycle, with drastic budget cutbacks, an increase in sales taxes, and the introduction of casino gambling in Texas.

The House Democrats' press conference, of course, contrasted sharply with the upbeat news briefing of Houston-area Republican House members on Monday, and an even bigger pep rally at the Governor's Mansion on Tuesday, which included the Big Three – Perry, House Speaker Tom Craddick, and Lt. Gov. David Dewhurst – who, after several failed attempts at passing a school finance plan, could finally say they did just that, except they said it like this: "We cut property taxes!" Which is what they intended to do all along.

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KEYWORDS FOR THIS STORY

special session on school finance, Rick Perry, Carole Keeton Strayhorn, Scott Hochberg, Tom Craddick, David Dewhurst, Elliott Naishtat, Jim Dunnam, Texas Federation of Teachers, Texas State Teachers Association, Center for Public Policy Priorities

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