House to Address Education Funding

House Speaker Joe Straus (Photo by Jana Birchum)

When the Texas Supreme Court rejected challenges to the state's school finance system last month, it was a blow to hopes of educators and administrators. The fear was that, without the court putting a gun to the Legislature's head, there would be no impetus to fix a funding process that even the justices admitted is substandard.

However, it seems that some lawmakers have acknowledged that something has to be done – including the third most powerful elected official in Texas, House Speaker Joe Straus. On June 2, he issued new interim charges to the House committees on Appro­priations and Public Education, telling them to start work on something more than Band-Aid reforms. While the state may have won the case, he said, "The Supreme Court made clear that our school finance system can be improved."

This is Straus' second push for re-evaluating how Texas pays for schools. Last November, before the court ruling, he instructed Public Education to examine specific components of the current system including the Cost of Education Index. However, his new charges suggest far more structural planning. The charge has two components. First is a review of the end of Additional State Aid for Tax Relief (ASATR). In 2006, when the Legislature last revised the recapture system, a fix was put in place that would offset the payments made by some ISDs. ASATR ends in 2017, and its demise will mean that over 200 districts – including Lake Travis and Lago Vista ISDs – would suddenly be subject to recapture. The political reality is that parents and officeholders previously protected from recapture are likely to descend on the Lege next year to demand that hold harmless clause stays in place. House Approp­ria­tions Committee Member Donna Howard, D-Austin, said that, without an ASATR replacement, many of these districts "will be in crisis mode."

The bad news for Travis County residents is that many of the larger local ISDs that are subject to recapture – including Austin and Eanes – do not benefit from ASATR. If the Legislature simply renews its terms without revising them, then they will see no relief, and will not see their case for changes strengthened by new allies from the former ASATR districts. Howard, a former Eanes ISD trustee, said, "School finance is extremely provincial. Any time anything is done and it doesn't affect you, you're not going to stick your neck out."

The second charge could be of much greater importance to Austinites. Straus instructed the committees to examine the whole "Robin Hood" recapture system: "Specifically, recommend ways to reverse the increasing reliance on recapture payments to fund public education statewide."

School finance in Texas has seen the state contribution to grade school education plummet for decades, while local tax bills have soared. In recapture districts, a crippling proportion of those property taxes are sent to the state. Eanes currently loses 44% of its maintenance and operations taxes – intended to cover day-to-day spending – while AISD will soon be sending half of its M&O tax dollars, unless there is reform. AISD Trustee Gina Hinojosa, who is the Democratic nominee for the Texas House in Austin's 49th District, said, "I am more than pleased that [Straus is] prioritizing public education, and school finance in particular, and not washing his hands." While she supported tackling ASATR, she said, "That's such a small part of a bigger problem. If we're going to focus on something, I'd rather we focus on the Cost of Education Index, which is inherently unfair because we're using measures that are 30 years out of date."

Straus' call doesn't come completely out of the blue. Lawmakers came close to targeted reforms last session that would have at least filled some holes, but deferred in favor of structural reforms next session. However, that proposal came before oil and gas tax revenues collapsed. "Last session we had some money, but couldn't close the deal," said Howard. "Now we have no money to work with."

Yet restoring school finance is one of the key areas upon which rural Republicans and urban Democrats often agree. The barrier to reform will likely remain the suburban Repub­licans – most particularly those in the Senate, where Lt. Gov. Dan Patrick is broadly expected to bring up his own school finance bills, in the form of his controversial voucher plans. However, that could be the one upside of the court ruling, since the Supremes did not order the Lege to pass at least some reform. Howard said, "Without that gun to our head, we can dodge that ­bullet."