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school finance

Many more school districts are feeling the pinch

Not just HISD. Not by a long shot.

For eight-straight years, Cypress-Fairbanks and Conroe ISDs earned the Texas Smart Schools Award, bestowed on school districts with prudent financial practices and high academic achievement.

Now, Cypress-Fairbanks faces a $50 million deficit next school year, and Conroe is projected to face its first deficit in nearly a decade in the next two to four years.

They are not alone.

As the Texas Legislature studies potential changes to the state’s school funding mechanisms, the majority of large Houston-area school districts are facing budget shortfalls they say stem from a lack of state aid. Of the 10 largest Houston-area school districts, all but three approved budgets last summer that included deficits of more than $1 million, according to a Chronicle review. At least nine say they may have to dip into reserve funds within the next three to five years if revenues do not increase.

For some, it is more dire. If nothing changes at the state or local level, district officials say Spring Branch ISD in west Houston will be financially insolvent in three years. Cypress-Fairbanks ISD will use up all its reserve funds in four or five years. Pasadena ISD only avoided a $20 million shortfall for the next school year by passing a tax hike referendum, and multiple districts are considering similar measures to keep their schools afloat.

That pain is felt in large and small districts across the state. North East ISD in San Antonio expects to cut $12 million from its budget next year, likely leading to teacher layoffs, according to the San Antonio Express-News. By 2020, budget documents in Ysleta ISD near El Paso show the district likely will draw down its reserve funds by $12 million. Friendswood ISD, which educates roughly 6,000 students in a sliver of southeast Greater Houston, is facing a $1.9 million budget shortfall next year.

“If we’ve been one of the most efficient districts in the state, and we’re facing this crisis, imagine what other districts are dealing with,” Cy-Fair ISD Chief Financial Officer Stuart Snow said.

[…]

Sen. Paul Bettencourt, R-Houston, who sits on the Commission of Public Education Funding, said districts should expand their revenue streams to include sources other than local property taxes and the state. He pointed to Dallas ISD, which pulls in about $10 million annually from philanthropy. United Airlines also staffed one of DISD’s schools with 25 full-time employees, a partnership Bettencourt said should inspire districts elsewhere.

“It’s not going to be one-size fits all — there are many, many ways to do it right,” Bettencourt said. “At end of the day, we want the education system to get students the best educations they can get for best deals taxpayers can support. But we need to look for all the ways we can do it right.”

First of all, to Paul Bettencourt: You cannot be serious. Philanthropy? Are you kidding me? Dallas ISD’s 2017-2018 general revenue expenditures were over $1.4 billion. That $10 million represents 0.7% of the total. You gonna suggest everyone search their couch cushions, too? Oh, and I don’t know about you, but I’m old enough to remember when two of the biggest philanthropic entities in Houston were Enron and Continental Airlines. Good thing HISD didn’t make itself dependent on them, you know?

This is entirely the Legislature’s responsibility. We are here because they refuse to adequately fund schools, and because they use the increases in property valuations to fund the rest of the budget, while blaming local officials for their shortfalls and tax hikes. As with everything else in this state, nothing will change until the people we elect change. If you live in one of these districts, don’t take your frustrations out on your school board trustees. Take it out on the State Reps and State Senators who skimp on school finance, and the Governor and Lt. Governor who push them to keep doing it.

HISD faces major changes

This is a very big story, but a key component to it is not discussed here.

Houston ISD officials said Saturday the district will need to cut about $200 million from its 2018-19 budget to bring spending in line with an increasingly gloomy financial outlook.

In an equally momentous move, Houston ISD officials also proposed far-reaching changes to how the district operates its magnet and school choice systems, some of the boldest moves to date by second-year Superintendent Richard Carranza.

Still reeling from Hurricane Harvey, Houston Independent School District officials revealed at a board meeting Saturday that the district is facing a double whammy: A multimillion-dollar, state-mandated “recapture” payment requiring districts with high property values to “share the wealth,” and an expected drop in enrollment and tax revenue because of the devastating storm, which severely damaged schools and delayed the start of classes by two weeks.

The proposed cuts come at an inopportune time, with the district battling to stave off a potential state takeover because of 10 chronically under-performing schools.

Although the measures outlined Saturday are preliminary and could change significantly before HISD’s board votes on them, officials acknowledged that the district is entering an uncertain time.

“It’s a sea change for HISD,” said Rene Barajas, the district’s chief financial officer. “But at the end of the day, from a budgetary perspective, we’re still going to get the job done. It’s just going to be harder.”

There’s a lot more and there’s too much to adequately summarize, so go read the rest. We know about the recapture payments, which even though they have been reduced due to Harvey are still significant. We know HISD has been talking about revamping its magnet programs for some time, and there’s a cost-savings component to that as well. We know that property values and enrollment have been affected by Harvey, and we know how daily attendance determines the amount of money the district gets from the state. So none of this is a surprise, though having to deal with all of it at once is a big shock.

What’s missing from this article is any mention of what the state could and should do to help ameliorate this blow. I think everyone agrees that if a school building is destroyed by a catastrophic weather event, it should be rebuilt via a combination of funding sources, mostly private insurance and emergency allocations from the state. Why shouldn’t that also apply to the secondary effects of that same catastrophe? It’s not HISD’s fault that its revenues, both from taxes and from state appropriations, will be down. There needs to be a mechanism to at least soften, if not remove, this burden. Bear in mind that one reason why the drop in property values is such a hit is because the state has shoved more and more of the responsibility for school finance on local districts. If Harvey had happened even a decade ago, the appraisal loss would still be felt, but not by as much. That’s not HISD’s doing, it’s the Legislature’s and the Governor’s and the Lieutenant Governor’s, all with the approval of the Supreme Court.

But what can be done can be undone. With little to no pain on its part, the Lege could tap into the Rainy Day Fund to get HISD past the worst of this, or it could recognize that the nearly one billion it appropriated last session for “border security” is little more than macho posturing, an endless boondoggle for a handful of sheriffs, and an sharp increase in traffic citations, and redirect some of that money to HISD and any other district in similar straits. There are other things the Lege could do, but all of it starts with the basic principle that the Lege should do something to help out here. When are we going to talk about that?

Has Harvey changed anything politically?

You’d think it would, but it remains to be seen as far as I’m concerned.

A month to the day after Hurricane Harvey made landfall in Texas, the reality of the storm was beginning to sink in on the minds of politicians, policy makers and advocates bracing for a long recovery.

In short, any political plans people had pre-Harvey are now moot.

“Whatever any of us thought or hoped that the agenda for the next session would be, it is going to be overtaken by mother nature,” House Speaker Joe Straus told a full auditorium at the University of Texas Saturday. “It’s going to the biggest challenge that we face.”

[…]

Politicians said it’s still too soon to know exactly what the state needs to do to help the areas slammed by the storm cover, such as how much money it will cost to fix schools and roads and invest in such infrastructure to guard against future storms.

What policy experts and politicians across the board do know is it could take years for the state to recover.

The storm may provide an opportunity for a special legislative session for lawmakers to rethink the state’s school funding formula given property taxes, which schools depend on for funding, are expected to tank in storm-ravaged areas, said state Rep. Dan Huberty, R-Humble.

“I don’t believe 1 million children are going anywhere, but their homes have been destroyed,” he said, noting his home sustained $50,000 in damage from Harvey. “I just don’t see any path to victory for the schools if we don’t take this very seriously going forward.”

Huberty wants lawmakers to return to Austin for a special legislative session focused on storm relief. In that conversation, they could rehab the state’s school funding formula to level out funding for districts that stand to lose property tax revenue from the storm.

[…]

Education Commissioner Mike Morath said he’s still undecided about whether to cancel, delay or ease how the state grades schools based on the tests. However, his tone changed from last week when he told the State Board of Education it was unlikely Texas would tinker with the STAAR.

That will be worth keeping an eye on. I’ve been thinking about what would have to happen for me to accept that “things have changed” in a substantive fashion. Two possibilities come to mind:

1. A special session to address school finance. This can’t be just to make payments to districts to cover Harvey costs that insurance and the feds won’t pay, though that absolutely needs to happen, and it can’t be something that waits till 2019 and is the initiative of the House Education Committee and Speaker Straus, because we already know they’re on board for this. It also can’t be used as a vehicle for pushing through the usual hobbyhorses like vouchers or the new obsessions like bathroom bills. The call would have to include both addressing disaster funding and more importantly the overall inequities of the system. The reason why this would be a change would be that it would demonstrate for the first time that Greg Abbott wants to fix this problem, and it would provide him with the chance to separate himself from Dan Patrick. For a variety of what should be obvious reasons, I don’t expect this to happen, but if it does it will be a real change.

2. Someone loses an election as a result of being unwilling to take positive action to abet recovery. I don’t think this will happen because right now the main obstacle to getting things done is Paul Bettencourt, and he’s not in any position to lose a race. The members of Congress who voted against Harvey aid, whatever their reasons for doing so, are all well outside the affected area. If a special session does happen, then that would create opportunities for people to say and do potentially costly things, but in the absence of such, I any current officeholder has much to worry about at this time.

I’m sure there are other possibilities, but these are what come to my mind. Everything else feels like normal business to me. Maybe if the state winds up doing nothing to help cities and school districts cover costs, despite the $10 billion-plus in the Rainy Day Fund, that would count as something having changed, though that’s clearly not what the story is about. I’m open to the idea that “things” will “change” after Harvey, but I’m going to wait until I see it happen before I believe it.

House to study Harvey-related issues

Good to see.

Rep. Joe Straus

House Speaker Joe Straus is asking three House committees to wade into issues related to Hurricane Harvey, including how the state can maximize federal funds and whether to rethink how to grade schools affected by the storm this year.

Straus issued five interim charges Thursday, focused largely on education issues, like the scope of damage to schools and figuring out how to help districts absorbing students displaced by Harvey. He also wants lawmakers to look at student testing and accountability to “prevent unintended punitive consequences to both students and districts.”

[…]

Straus’ other charges include taking a close look at the state’s infrastructure and use of state and federal funds during storm recovery and review the role of regional entities to developing flood control projects.

“Hurricane Harvey has devastated our state and upended the lives of millions of Texans,” said Straus said in a letter to House members asking for further suggestions of issues lawmakers should study leading up to the next legislative session that begins in January of 2019. “The importance of getting these issues right when we meet again demands that we start working on them now.”

As we know, the TEA isn’t inclined to cut school districts any slack at this time, so it’s nice for the Lege to look at that. I’ll be very interested to see what they come up with regarding infrastructure. As noted before, we authorized a fund for building reservoirs and the like. What are we doing with that, and can we use it for flood mitigation instead of drought mitigation? This seems like as good a time as any to find out. The Trib has more.

House passes school finance bills

I doubt they’ll meet a different fate than they did in the regular session, but kudos anyway.

Rep. Dan Huberty

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.

[…]

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.

[…]

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.

See here for the first go-round on HB21, and here for the ASATR story. I don’t expect anything to happen with any of this, but I suppose a surprise is possible. The House and the Senate are on such different pages that it seems unlikely in the extreme, though.

This special session is going to be so much fun

So much repressed hostility

Starring Dan Patrick as Thelma, Greg Abbott as Eunice, and Joe Straus as Vint

Five days before the Texas Legislature is scheduled to open a special session, it is clear the relationship between the leaders of the House and Senate remains as strained as it was at the end of the regular session.

On Thursday, Lt. Gov. Dan Patrick used a press conference to blast fellow Republican and House Speaker Joe Straus, comparing his education funding proposals to a “Ponzi scheme,” accusing him of laying the groundwork for a state income tax, and complaining that Straus won’t even meet with him one-on-one to bridge their differences.

Those comments come almost exactly one month after Straus used a speech in San Antonio to demand the state’s school finance system be added to the special session call and took issue with the Senate’s focus on transgender bathroom issues. And earlier this year Straus had compared the Senate’s budget writing to Enron accounting methods.

Patrick said his news conference on Thursday was to roll out new education proposals, including a bonus system for teachers. But much of the focus of the first 10 minutes was on his counterpart in the House and his continued call to have public school finance added to the special session call.

Patrick said Straus’ was using education funding as “dangerous political stunt” and accused him of having no plan to pay for the billions of additional funding Straus has said the state should be committing to schools.

“Where does that money come from? The only way to do it is a state income tax,” Patrick told reporters.

Later Patrick was even more direct.

“I will not join the Speaker and lay the groundwork for a state income tax,” Patrick said.

[…]

“It’s encouraging to see the Lieutenant Governor’s newfound focus on school finance reform,” Straus responded in a prepared statement.

“Nothing could be more important in this special session than beginning to fix our school finance system so that we improve education, keep more local dollars in local schools, and provide real property tax relief, just as the House overwhelmingly approved in the regular session,” Straus said.

so little time.

“My position is very well known. And let me say this very clearly: I know how to govern without being an extremist,” Straus said. “I know how to govern, trying to bring people together to focus on issues that really matter to all Texans, and I think that’s where our focus ought to be in the special session. It’s where our focus should be in any regular session as well.”

The bathroom proposal would keep transgender people from using multi-occupancy restrooms of the gender with which they identify in government buildings, or at least in public schools.

Straus, along with advocates for transgender people and business groups, has voiced concern about the possible economic effect of boycotts because the bill is viewed as discriminatory. He also has expressed a worry that it could hurt transgender people.

“I see no good reason to promote a divisive bathroom bill when it does nothing but harm to the economy, and some very vulnerable people could be harmed,” Straus said.

[…]

Straus, who has been a thorn in the side of Abbott and Patrick on red-meat issues, said he considered it “actually encouraging” that Patrick was talking about school finance. Straus has said that issue is more worthy of attention than most of those on the special-session agenda.

On Friday, when Abbott was showcasing his record as he announced for re-election in San Antonio, Straus made his point about the need to focus on core issues by citing CNBC’s annual ranking of America’s Top States for Business. In it, Texas fell from No. 1 to No. 4. The No. 1 state was Washington. Its governor and both senators are Democrats.

“While No. 4 is not a terrible place to be, I don’t like the direction. And I think that our Texas political leadership ought to be focused on making Texas No. 1 and reverse that slide,” Straus said.

They’re putting the “special” in “special session”, that’s for sure. The Observer has more.

Special session officially set

Brace yourselves, it starts next week.

Gov. Greg Abbott issued a declaration for a special session of the Texas Legislature Monday, formally inviting lawmakers back to Austin to pass “sunset legislation” that will keep several key state agencies open.

The long-awaited procedural move allows lawmakers to begin filing bills for the special session set to begin on July 18.

In addition to the formal declaration, Abbott also released a draft version of 19 additional items he plans to add to the special session agenda later on. Last month, Abbott announced that lawmakers would consider 20 total legislative items during the special session.

[…]

Secretary of the Senate Patsy Spaw said her office received a copy of the proclamation around 11:00 a.m., which she forwarded to senators to alert them that they could begin filing bills. A physical copy of the proclamation was also delivered to senators’ offices in the Capitol building. Senators began filing bills Monday afternoon.

Meanwhile the House, which has had an e-filing system in place for years, received over two dozen bills before 1 p.m.

Robert Haney, the House chief clerk, said the first bill filed Monday, House Bill 41 from state Rep. Mike Schofield, R-Katy, was received at 11:42 a.m. The bill aims to change how the state calculates the constitutional spending limit, which restricts how much the budget can grow from one biennium to the next.

Within an hour, dozens of other bills were filed including two pieces of bathroom-related legislation from state Rep. Ron Simmons, R-Carrollton. HB 46 would forbid “political subdivisions, including a public school district” from adopting or enforcing measures to “protect a class of persons from discrimination” in regulating “access to multi-occupancy restrooms, showers or changing facilities.” HB 50 is identical except applying only to a school district board.

See here and here for the background. Special sessions are limited to the agenda the governor sets. That has never stopped anyone from filing bills on whatever other subjects they wanted, some good, some bad, and some utterly pointless, because you never know when the governor may exercise his power to add to that agenda. The real question for this session is what happens when some number of Abbott’s bills don’t get passed – indeed, don’t even get a vote. “Sunset and sine die” may be the battle cry, but nothing would stop Abbott from calling everyone right back, as Rick Perry did in the past. How much is enough for Abbott? We’re about to find out.

What West Texas can do to improve their schools

Here’s an op-ed from the Statesman about one educator in West Texas who has had enough.

My hero this week is Graydon Hicks, Fort Davis superintendent of schools.

A West Texas publication published his open letter to Gov. Greg Abbott and Lt. Gov. Dan Patrick raking them over the coals for “the lack of positive legislative action for public schools in Texas” at the most recent session, which adjourned at the end of May without passing a school finance bill.

Hicks is a West Point graduate and an experienced school administrator. He is no-nonsense guy who does not mince words. After detailing the effect of shrinking state financial support for public schools on Fort Davis schools over the past 10 years — combined with an increasing number of unfunded mandates and requirements — Hicks wrote, “How much more do you want to harm our children?

“If your intent is to dissolve public education (and your actions are more than a clear signal of such), then simply go on the record with that statement and remove the state’s authority to further overburden us without financial support. Quit pontificating about bathrooms. Quit hiding your intentions behind righteous statements about school vouchers and choice.”

Hicks accompanied his letter with a chart showing the annually declining amount of state funding available to the Fort Davis school district and the increasing burden on local taxpayers since 2008. That year, state funding amounted to $3.9 million, or 68 percent of the school district’s budget. Local property taxes provided $1.8 million, or 32 percent. In 2017, the state will contribute $378,000 — about one-tenth of its 2008 commitment, or 15 percent of the total budget. Local taxes this year will provide $2.2 million, or 85 percent.

“The Fort Davis ISD has 226 students,” Hicks wrote. “It has no cafeteria, has no bus routes, has dropped our band program, has eliminated (or not filled) 15 staff positions, has cut stipends for extra-curricular activities, has frozen (or reduced) staff pay for one year, has cut extra-curricular programs, has no debt, and has increased our local tax rate to the maximum allowed by the law.

“We have nothing left to cut.”

I agree that Superintendent Hicks sounds like a fine fellow who is speaking truth to power. That said, I feel compelled to point out how Jeff Davis County (*), which is where Fort Davis ISD, voted in the last gubernatorial election:


Governor
			
Greg Abbott             623  60.54%
Wendy R. Davis          366  35.57%
Kathie Glass             31   3.01%
Brandon Parmer            9   0.87%


Lieutenant Governor
			
Dan Patrick             560  56.62%
Leticia Van de Putte    375  37.92%
Robert D. Butler         48   4.85%
Chandrakantha Courtney    6   0.61%

Hold that thought. Now here’s a similar story about the school funding woes in West Texas:

Educators were excited to hear Gov. Greg Abbott announce he would call lawmakers back to Austin for a special legislative session to consider $1,000 teacher pay raises.

But Donna Hale, superintendent at 200-student Miami ISD in rural Roberts County, is wondering where the money is going to come from. An unfunded mandate, she said, could throw a wrench into their already difficult budgeting process.

“That’s the last thing we really need – the state saying you’ve got to do this when they’re not offering any support for us,” said Hale, who already doubles as the district’s librarian and said she was considering taking over as principal to cut payroll costs.

A wind farm and a sea of oil and natural gas wells in Roberts County has been good to Miami ISD, giving the district a flush tax base to pay for teachers and buildings. But its $1 billion dollar tax roll was cut in half this last year amid tumbling oil and gas prices. A state aid provision that it has relied on in recent years to guard against economic downturns expires in September and will take more than a third of the district’s budget with it.

Many rural schools like Miami ISD, the only school district in the county, are facing a similar dilemma and pleading with the State Legislature to act. Lawmakers return to the Capitol next month for a legislative overtime period, but school finance reform has taken a back seat to bills regulating bathroom use and creating a school choice program.

Again, I sympathize, and again, I wonder how did Roberts County vote in 2014?


Governor
			
Greg Abbott             324  93.91%
Wendy R. Davis           15   4.35%
Kathie Glass              5   1.45%
Brandon Parmer            1   0.29%


Lieutenant Governor			

Dan Patrick             320  93.29%
Leticia Van de Putte     12   3.50%
Robert D. Butler         10   2.92%
Chandrakantha Courtney    1   0.29%

I think you get where I’m going with this. Now, I will stipulate that in 2014, one might have been able to believe that Greg Abbott, who was touting an expansion of pre-K, and Dan Patrick, who had served as the Senate Education Committee chair and had passed some bipartisan bills during that time, could at least have been okay on education and school finance issues. Here in June of 2017, after a session that included the Senate refusing to consider HB21 and a special session that includes vouchers on the agenda, it’s really hard to believe that now. Further, both counties are represented in the Lege by pro-education members. Roberts County is served by Sen. Kel Seliger, who was the only Senate Republican to oppose the main voucher bill, and by Rep. Ken King, who was endorsed by Texas Parent PAC in the 2012 primary. Jeff Davis County has two Democrats, Sen. Jose Rodriguez and Rep. Cesar Blanco, in the Lege. Both were unopposed in 2016, and Blanco was unopposed in 2014, but in all three cases they drew a comparable number of votes to Republicans on the ballot. In addition, former Rep. Pete Gallego carried Jeff Davis County in 2010, even as Rick Perry and the rest of the Republicans were also winning it. The voters there do vote for pro-education candidates. Will they – and other counties like them – recognize in 2018 that “pro-education” does not describe Abbott or Patrick? I for one will have a lot more sympathy for their plight if they do.

(*) Yeah, I know.

School finance bill is dead

It started with this.

State Rep. Dan Huberty said Wednesday that he would not accept the Senate’s changes to his school finance bill, launching a last-ditch effort to hammer out a compromise with less than a week left in the session.

After a passionate speech railing on the Senate for gutting his bill, Huberty, a Houston Republican who is chairman of the House Public Education Committee, announced he has decided to request a conference committee with the Senate on House Bill 21.

The bill was originally intended to inject $1.5 billion into the state’s funding for the majority of public schools and to simplify some of the complex, outdated formulas for allocating money to school districts across the state. The Senate took that bill, reduced the funding to $530 million, and added what many public education advocates have called a “poison pill”: a “private school choice” program that would subsidize private school tuition and homeschooling for kids with disabilities.

“Members, some of your schools will be forced to close in the next year based on the committee substitute of House Bill 21,” as passed by the Senate, Huberty said, before moving to go to conference. “I refuse to give up. I’ll continue trying. Let’s at least attempt to rescue this bill.”

The House voted 134-15 to request a conference committee with the Senate on the bill.

See here and here for the background. The House’s request for a conference committee was denied by the Senate.

An effort to overhaul the state’s beleaguered school finance system has been declared dead after the Texas Senate Education Committee’s chairman said Wednesday that he would not appoint conferees to negotiate with the House.

“That deal is dead,” Larry Taylor, R-Friendswood, said.

Taylor’s remarks come after his counterpart in the House, Dan Huberty, R-Houston, gave a passionate speech in which he said he would not accept the Senate’s changes to House Bill 21 and would seek a conference committee with the Senate.

HB 21 was originally intended to inject $1.5 billion into the state’s funding for the majority of public schools and to simplify some of the complex, outdated formulas for allocating money to school districts across the state. The Senate took that bill, reduced the funding to $530 million, and added what many public education advocates have called a “poison pill”: a “private school choice” program that would subsidize private school tuition and homeschooling for kids with disabilities.

Lt. Gov. Dan Patrick pronounced the bill dead in a statement Wednesday afternoon.

“Although Texas House leaders have been obstinate and closed-minded on this issue throughout this session, I was hopeful when we put this package together last week that we had found an opening that would break the logjam. I simply did not believe they would vote against both disabled children and a substantial funding increase for public schools,” he said in the statement. “I was wrong. House Bill 21 is now dead.”

House Speaker Joe Straus said in a statement Wednesday that the Senate has not prioritized school finance reform this session.

“We appointed members of a conference committee today because the House was willing to continue to work on public school finance immediately. Unfortunately, the Senate walked away and left the problems facing our schools to keep getting worse,” he said.

HB 21 was the first time in years that the Legislature has taken up major school finance reform without a court mandate.

HB21 was also the vehicle for addressing the recapture issue that is costing HISD (among other districts) millions and which is being litigated on the grounds that the TEA didn’t make its changes to the formula properly. You can kiss that good-bye as well. It’s somehow fitting that the Lege could not come to an agreement on school finance, as this proves the lie of the Supreme Court ruling that insisted they could do this on their own without the Supremes forcing them to. Not as long as we have Dan Patrick presiding over this Senate they won’t. The Chron has more.

Senate wrecks school finance bill

It’s what they do.

The Texas Senate has scrapped much of a proposal to revise how the state funds education in place of a plan to create a school voucher program for children with disabilities.

The bill passed the Senate 21-10 at 12:50 a.m. Monday, marking the second time in two months the chamber has approved legislation that would allow parents to use public school dollars to subsidize their child’s tuition at a private school.

“It’s heartbreaking,” said Sen. Larry Taylor, a Friendswood Republican and Education Committee chairman sponsoring the bill. “This would empower some of those parents to have some leverage.”

The new language, added on the Senate floor late Sunday night, now includes money for charter school facilities, autism grant funding and programming for special education students transitioning out of school. The changes also reduce the amount of new money into education from about $1.9 billion to about $500 million during a tight budget cycle amid lower-than-expected state revenue.

The changes come to House bill 21, the lower chamber’s flagship proposal to begin a multi-year process of rehabbing the state’s school funding formula after the Texas Supreme Court called the system constitutional but in need of improvement. The House measure deleted outdated pieces of the formula, reduced recapture and added weights to allocate more money per student with dyslexia or learning English as a second language.

The Senate hijacked the bill shortly after it arrived in the upper chamber, adding to the bill a school voucher program, which the House has opposed, throwing the fate of the school finance fix into jeopardy.

Basically, HB21 as we once knew it is dead. The AFL-CIO changed its position on it from Support to Oppose a few days ago as these changes were first being made. At this point, the House should stick to its guns on vouchers and reject the amended bill. The Trib has more.

More on the HISD recapture re-referendum

Here’s the full Chron story about Saturday’s re-vote on recapture.

About 84 percent of constituents voted “for” HISD’s Proposition 1, giving the school district the green light to send $77.5 million to the Texas Education Agency rather than let the state forcibly remove some of most valuable commercial properties from the district’s tax rolls.

The reversal from the “come-and-take-it” mentality followed trustees’ meetings with state officials and lawmakers earlier this year. Board members feared vindictive action from Austin and also had second thoughts about going with the more costly “detachment” option.

Christopher Busby, an HISD teacher at the Sam Houston Math, Science, and Technology Center who voted for Proposition 1 on Saturday, said paying recapture was the lesser of two evils.

“Recapture is not on the ballot; recapture has already happened. This is about how we handle recapture,” Busby said. “The solution that does the least damage to the district is a ‘for’ vote.”

Mark Jones, a political science fellow at Rice University’s Baker Institute, said HISD gained nothing through the two referenda, which cost the district an estimated $1.7 million.

“In the end, what HISD has done is use a lot of its political capital and has gained absolutely nothing,” Jones said. “They used political capital in (the) fall to persuade people to vote no, and they used political capital this spring to get those same people to vote yes. But they could have just said yes and paid the state like everyone else.”

[…]

Most trustees agree that referendum produced some desirable outcomes – the Senate authorized a work-study committee to look into overhauling the state’s school finance system in January, and Rep. Dan Huberty, R-Houston, proposed a bill that would increase state education spending and lessen the amount districts would pay under recapture.

After the November vote, board President Wanda Adams and trustees Skillern-Jones, Anna Eastman and Mike Lunceford grew worried that refusing to pay the state recapture fee willingly would have dire consequences for the district and the board.

Trustees Jolanda Jones and Manuel Rodriguez Jr. insisted that the district hold fast in its decision to withhold the recapture money. Otherwise, they argued, HISD risked losing ground in getting the state to rethink recapture and its school funding formulas.

“The whole point was to get the Legislature to move on this. The only reason they’re paying attention was not because we have a great lobbying team, it’s because we voted no,” Jones said in February. “The second we relent and bend over, it’ll ruin this for rest of state and our momentum because everyone is looking at Houston.”

Jones with Rice’s Baker Institute said the state’s actions were more likely the result of a May 2016 Texas Supreme Court ruling that found while the state’s school finance formula was constitutional, it desperately needed to be overhauled.

Please note that the November election was required by state law once HISD was put into recapture. Only the May election was optional. As you know, I agree with the trustee’s interpretation of what the November “No” vote meant, and I disagree with Mark Jones. I’ll cite David Thompson as my evidence for that. What happens from here is unclear, but I believe that there is now a greater appreciation of how messed up our school finance system is – I mean, raise your hand if you knew six months ago that recapture funds helped offset state spending on education instead of going to other school districts – and I believe there is a greater consensus about what needs to be done to fix it. Not at the top, of course – we’re never going to get a real fix with the Governor and Lt. Governor we now have – but among legislators themselves. There’s still a lot of work to do – HISD in particular can and should keep pushing the TEA to give it and other recaptured school districts credit for transportation costs and pre-k programs – but progress has been made. I’m happy with the way things played out.

House approves bill to kill margins tax

Dumb.

The Texas House on Thursday approved a proposal that would phase out an unpopular business tax that provides funding for public schools.

The proposal by state Rep. Dennis Bonnen, R-Angleton, would not reduce the state’s franchise tax during the current penny-pinching legislative session, but it would do so in future years. Under Bonnen’s bill, economic growth would trigger reductions in the tax, which currently brings in about $8 billion every two-year budget cycle, until it ultimately disappears.

About $1.8 billion in franchise tax revenue in the current two-year budget cycle goes to the Property Tax Relief Fund, which pays for public schools. Democrats, arguing that the tax cut would cause lawmakers in later years to underfund crucial public programs, railed against the proposal for nearly two hours. They offered a series of amendments that would have lessened the extent of the tax cut or redirected funds for college tuition, pre-kindergarten and other priorities, but all were defeated.

The final vote took place late Thursday evening at the end of a long day on the House floor, which followed a marathon debate Wednesday over “sanctuary” jurisdictions that lasted until roughly 3 a.m. When Bonnen’s proposal finally hit the floor, few Republicans offered any remarks in response to Democrats’ outrage; most lawmakers in the chamber appeared to be paying little attention.

[…]

Businesses dislike the franchise tax, often called a “margin tax,” because they say it’s overly complicated and can punish them in less-prosperous years. Because it’s based on a business’s gross receipts, a business can still be required to pay the tax even in years it takes a loss. Many call the tax, which was passed as a way to reform the state’s school finance system, an unnecessary burden, and high-profile Republicans including Gov. Greg Abbott have sought its demise.

Lawmakers in 2015 cut the tax rate by 25 percent, which gave them $2.6 billion less revenue to help craft a budget this year. Proponents of the tax’s elimination argue it would stimulate the state’s economy and create jobs.

In the short term, it’s difficult to say just how much revenue is at stake in Bonnen’s proposal because the tax is highly dependent on economic conditions. A fiscal note written by the state’s Legislative Budget Board estimated it could cut public school funds by up to $3.5 billion in the 2020-2021 biennium.

I mean, look, I know the margins tax was a poorly conceived kludge that everyone hates (or at least claims to) and which has been a top GOP whipping boy for a couple of sessions, but please do keep two things in mind. One, this tax, which replaced the also-hated and seldom-paid franchise tax, was created in 2006 to help fill the revenue void left by the Supreme Court school finance decision in 2005 that led to a mandated across-the-board property tax cut. It was never going to fully fill that void, and indeed its poor design and regular underperformance has been a problem, but it at least made up for some of the funding for schools that disappeared when the previous system was declared to have been an unconstitutional statewide property tax. Something is going to need to replace the revenue lost to this tax being (eventually) eliminated, and all we have right now is wishful thinking about economic growth, a continued reliance on local property taxes, and a handful of magic beans. And two, it’s probably not a coincidence that the amount of revenue lost in this biennium to the previous one’s margins tax cut is almost precisely the amount the House and Senate are arguing about in order to make this session’s budget “balance”. Cause and effect, y’all. You should have one of your interns Google it.

House passes school finance reform bill

Well done.

Rep. Dan Huberty

State Rep. Dan Huberty succeeded at a difficult task Wednesday: getting the Texas House of Representatives to vote for legislation overhauling the funding system for public education, without a court mandate.

After a four-hour discussion of more than 30 proposed amendments, the House voted 134-16 to tentatively accept its top education leader’s plan to inject $1.6 billion into public schools, simplify the complex formulas for allocating that money, and target certain disadvantaged student groups for more funding. The bill must still be approved on a third and final reading in the House.

[…]

The tentative victory comes after senators approved a budget that cuts state funding for public schools by $1.8 billion in general revenue, and uses local property tax revenue to make up the difference.

Huberty’s bill would increase the base per-student funding the state gives to school districts, in part by increasing funding for students who are bilingual and dyslexic. The Legislative Budget Board estimates about 96 percent of districts and 98 percent of students would see more money under the bill.

“This is the first time in over 30 years that we have the opportunity to vote for school finance, to make a holistic change,” Huberty said before Wednesday’s vote.

Throughout the evening, Huberty successfully moved to table many of his colleagues’ proposed amendments to the bill, either because they would add to the bill’s price tag or because he deemed them irrelevant to his legislation.

“This is the school finance bill,” he reminded Rep. Jason Isaac, R-Dripping Springs, who unsuccessfully tried to attach a provision to HB 21 that addressed the testing and accountability system.

The House budget allowance for this bill would provide more funding to more school districts for busing, but many legislators expressed concern that the money would be stretched thin because districts that didn’t provide bus service would still receive transportation money. None of the amendments to address transportation funding passed.

Rural legislators banded together to add a provision that would help hundreds of small districts with fewer than 1,600 students. The provision, proposed by Rep. Drew Darby, R-San Angelo, would remove an existing financial penalty for school districts smaller than 300 square miles, which was originally intended to encourage them to consolidate.

Darby proposed putting all districts with fewer than 1,600 students at similar levels of funding, which he said would increase funding for more than 400 districts.

“Almost half the school districts in Texas will benefit from these amendments,” he said.

Legislators voted 86-59 to approve Darby’s amendment, despite Huberty’s opposition.

See here for the background. The Darby amendment was about Additional State Aid for Tax Reduction, for which you can get some background here. Getting something through the House is a big accomplishment; as the story notes, Rep. Jimmie Don Aycock declined to put a bill forward in 2015 on the grounds that it didn’t stand a chance. Priorities are shifting, and there seems to be a lot of support for finally addressing some of the serious shortcomings in the current system. Which, if it happens, would vindicate the Supreme Court’s decision to not force the issue but leave it up to the Legislature. Assuming that Dan Patrick and the Senate – and Greg Abbott – go along, of course, That’s far from a sure thing, as a brief perusal of the Senate’s budget proposal would show. But it’s a start, and it could happen. That’s more than what we’ve had in a long time. Kudos all around.

House releases school finance fix bill

A step in the right direction.

Rep. Dan Huberty

The top public education policymaker in the Texas House unveiled a $1.6 billion plan on Monday that he described as a first step to overhauling the state’s beleaguered school funding system.

At a Capitol press conference, state Rep. Dan Huberty said House Bill 21 would boost per-student funding for nearly every public and charter school in the state while reducing the amount of money wealthier school districts are required to give up to buoy poorer ones. The state’s so-called Robin Hood plan has become a hot-button political issue as large districts like Houston have recently had to begin making payments.

“House Bill 21 will not only improve our schools but it will also reduce the need for higher property taxes,” said Huberty, a Houston Republican who chairs of the House Public Education Committee.

[…]

He said HB 21 would increase the basic funding for almost all school districts from $5,140 to $5,350 per student per year. That would happen in part through an increase in transportation funding by $125 per student for all school districts, including property-wealthy districts that currently have limited access to that money.

It also would increase the amount of money the state gives to schools for students with dyslexia. And it would include additional funding for high schools and non-professional staff.

Huberty estimated it would lower payments that property-wealthy school districts pay to the state to subsidize property-poor school districts by $163 million in 2018 and $192 million in 2019. As the state’s share of school funding has decreased, more school districts with swelling enrollment are on the hook for such Robin Hood payments.

The bill is similar to an unsuccessful school finance initiative filed in 2015 that would’ve injected twice as much money into the system — $3 billion — and boosted per-student funding across the board. Still, $1.6 billion is a significant sum amid the current budget crunch.

This bill had a hearing yesterday as well, and despite being overshadowed by the sound and fury of the bathroom bill hearing, there was a report about it.

The bill would inject about $1.6 billion into the public education system, boosting funding for almost every school district in the state although a few would be left out. It also wouldn’t renew a soon-expiring program that awards supplemental state funds to more than 150 districts to offset a decade-old property tax cut — a major concern for education officials who depend on the funding. A provision in the bill that would award some grant money to make up for the loss isn’t enough, they told the committee Tuesday.

“My districts are going to lose,” said Mike Motheral, executive director of the Texas Small Rural School Finance Coalition. He said he represents 14 West Texas school districts that could lose up as much as 53 percent of their state revenue with the end of the state aid program.

“One of my districts will lose $4.5 million and they have a $10.5 million budget,” he said.

When the Legislature reduced property taxes by a third in 2006, it guaranteed school districts like the ones Motheral represents at least the same amount of funding they received in 2005-06 through a state aid initiative. The extra aid expires Sept. 1, so many districts have been asking for an extension to avoid falling off a funding cliff. About 156 school districts currently receive such aid.

As written, the bill proposes letting the initiative providing extra state aid expire and instituting a $100 million two-year grant program, prioritizing districts that would lose money through the new funding formulas. That’s not enough to cushion the blow, school officials told the committee Tuesday.

[…]

Numbers released Monday along with the bill show that about 35 of the state’s 1,200 school districts and charters would lose funding in 2018 and 58 would lose funding in 2019. The rest would see basic funding increase from $5,140 to $5,350 per student annually thanks to an increase in transportation funding and more money for students with dyslexia.

Many school officials and advocates who testified on the bill Tuesday said it leaves too many behind.

“We want a bill that has no losers,” said Christy Rome, executive director of Texas School Coalition, which represents mostly wealthier school districts.

Here’s HB21. I agree with Christy Rome and Mike Motheral. There shouldn’t be any losers in this. As much as HISD and the other districts affected by recapture should be made right, it should not come at the effect of these other districts. The right answer is the put enough money in to fix the formulas. Easy to say, and Lord only knows what kind of reception this gets in the Senate. But this is what it comes down to, and what needs to happen. The Chron has more.

A re-vote on recapture?

This is very interesting.

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.

[…]

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.

The effect of this new interpretation of the law would be to reduce HISD’s bill for recapture by about $60 million. HISD would still need to pay a bit more than $100 million to the state, so this is hardly a cure-all, but it’s a significant savings.

To me, this is a win for the No vote on recapture last November. As the story says, the TEA could have interpreted the law in this fashion, to allow districts that grant the higher homestead exemption more credit in the byzantize school finance system, years ago. I believe one reason – maybe not the only reason, but surely a big reason – why it didn’t happen before now is because there wasn’t a loud enough voice demanding the change. HISD’s No vote on recapture was a big deal that got people’s attention and focused some energy on just how screwy the system had become. Another boost to their argument was that HISD was being penalized for having a lower tax rate than it could have had. This particular kink in the way the finances were calculated was one of the things that “No on recapture” advocates like David Thompson pointed out, as it was a simple fix that could be easily implemented and would not only be fair but also have a big effect. Maybe this happens anyway if HISD meekly paid its recapture bill, but if anything should be clear at this point in time, it’s that kicking up a fuss tends to be a better way to get what you want.

Bettencourt’s office put out a press release lauding HISD for scheduling another vote. I haven’t seen any other reporting on this – as of Saturday there was nothing on HISD’s website or Facebook page about this – so he’s either being a bit premature or he’s gotten some verbal assurance that the Board will indeed approve a May election at its Thursday meeting. The Board can claim a victory here, and it should be able to sell the idea of writing a smaller check to the state to its constituents and allies from the last election. I’d be inclined to vote Yes this time around – the problem isn’t fully solved, and even without a big school finance overhaul there are other things that could be done for recapture districts like giving credit for pre-K students, but it’s a step in the right direction. It will be interesting to see how the Board reacts, and to see if groups like CVPE and the teachers’ union go along. Whatever else happens, this was a good thing.

Senate to begin studying school finance changes

We’ll see what this looks like.

Leaders in the Texas Senate are vowing to find ways to overhaul the state’s school finance system, saying a recent Texas Supreme Court decision granted them a prime opportunity to shake up the heavily criticized status quo.

On Monday, they announced the creation of a Senate budget working group — led by Friendswood Republican Larry Taylor — to tackle the issue. That group will work with the Senate Education Committee, which Taylor chairs, to propose replacements for the current school finance system.

“The opportunity is huge for us to get it right,” said Jane Nelson, chairwoman of the Senate’s powerful Finance Committee. “We need a whole new method of school finance.”

They’ll face an uphill climb in a session where legislators face several obstacles to major reform, not the least of which is money. The announcement comes a week after the Senate unveiled its preliminary budget, which did not include additional funding for public education.

During the Finance Committee’s first hearing of the 2017 legislative session on Monday, Nelson, R-Flower Mound, advised the newly formed working group to “start with a clean slate” in recommending a new school finance scheme. “It should be less complicated, innovative and should meet the needs of our students,” she added.

[…]

“We’re left with a question mark as to what this effort will mean by the Senate,” said Lynn Moak, a school finance expert at the Austin-based consulting firm Moak, Casey & Associates. The main question is “whether they’re trying to reform school finance within existing dollars or looking for possible additional dollars to fund the system.”

Nelson last week unveiled the Senate’s $213.4 billion two-year budget proposal, calling it a bare-bones starting point for financial discussions in what promises to be a particularly tight-fisted year. That proposal did not touch funding formulas for public education.

The House’s base budget — also released last week — included an additional $1.5 billion that could be spent on public education only if the Legislature reforms the school finance system.

Here’s the Chron story, which has the local angle.

In Houston, where voters last November overwhelmingly rejected having local taxpayers pay the state for $162 million in so-called “recapture” of school funds, HISD Trustee Jolanda Jones said the creation of the Senate group signaled that the message from the ballot initiative had been heard in Austin.

“They’ve done more with HISD pushing back than they have in 24 years of hearing school districts complain about it,” Jones, a vocal opponent of “recapture,” said Monday. “Recapture is based on the premise of Robin Hood, taking from the rich and giving to the poor, but that’s never what it did. It took from the poor and reallocated to the poor. Help me understand why 75 percent of our kids are poor, really poor, receiving free and reduced-priced meals, and you’re taking money from us? It makes no sense; we need more money, not less.”

Because the district will refuse to pay the recapture fee, the Texas Education Agency has threatened to remove commercial buildings from HISD’s taxing district this July so it can give the money to other “property poor” districts.

HISD Trustee Anna Eastman said she hopes lawmakers will act before the TEA takes the property tax revenue from local commercial properties, though she is not sure overhauling the school finance system can be done in one session. But she was heartened to see the Senate look at the funding system.

“School finance can’t be based on some kind of cryptic formula that makes it so kids in a certain pocket are getting lots of money and others are getting little,” Eastman said. “Areas such as ours shouldn’t be picking up all the slack for areas that can’t generate revenue off property growth. It shouldn’t be that big of a gap.”

In Pearland, where local schools receive $9,358 per student, the lowest share in the Houston area, Superintendent John Kelly said that if the state does not increase its share, his district may have to dip into reserve funds to provide any kind of an increase to employees or to meet rising costs. He said lawmakers have been disingenuous in saying they want to lower taxes while requiring districts to raise more local taxes.

“They talk out of one side of their mouth ‘tax cuts’ for people, but on the other side they’re confiscating the increase in tax values across the state,” Kelly said of the Legislature.

That would need to be a part of any overhaul for it to be worth the name. I’m more wary than optimistic. I fear what we will get will be another shuffling of existing funds that will mostly change who’s getting screwed less. I don’t have any faith that Dan Patrick’s Senate will put more money into the system, or that they will alter it in a way that allows for, let alone mandates, covering the costs of growth in a sensible fashion. Let’s not forget that at the same time this is going on, there will be a renewed push for private school vouchers, which will only drain more money from public education. They could surprise me in a good way, and I will reserve judgment until I see what they come up with, but I do not start out feeling very hopeful about this. The track record of the players involved argues otherwise. RG Ratcliffe, who also sees vouchers in this, has more.

Where we begin with school finance

A nice overview from the Trib on school finance, where the problems are many and the budget situation is non-optimal.

The current system is held together by a number of short-term fixes that have not been updated or reformed in decades. The Texas Supreme Court upheld the funding system as constitutional in May, and at the same time put the onus on state lawmakers to reform it — but few believe a major overhaul will come without a court order.

Even if legislators decided to tackle an overhaul of the whole system, experts say there is not enough money in state coffers to increase state spending, lower local spending and relieve Texans upset about rising property taxes. For now, some lawmakers are backing a simple plan to increase money to all school districts through the general appropriations bill, instead of taking apart the complex school finance system. Others have filed bills to tweak individual weights in the system, which provide additional money for disadvantaged student populations.

[…]

Legislators will also have to decide this year whether to re-up a program that provides extra funding for fewer than 200 districts that would otherwise have lost money in previous school finance rewrites. When the Legislature reduced property taxes by a third in 2006, it guaranteed school districts at least the same state funding they received for the 2005-06 school year by creating the Additional State Aid for Tax Reduction initiative.

That aid expires Sept. 1, but the districts still receiving the money are clamoring for an extension. “At some point, it does need to go away for the sake of more equity. But it can’t fall off a cliff at this point in time,” said Guy Sconzo, executive director of the Fast Growth School Coalition, which represents the fastest-growing districts in the state. “It does the entire system no good if any part of the system effectively goes bankrupt.”

So far, five legislators have filed bills to extend the funding program. State Rep. Ken King, R-Canadian, filed House Bill 811, which would extend funding through 2020-21. Sen. Lois Kolkhorst, R-Brenham, proposed an extension through 2022-23. Both lawmakers were members of their chambers’ public education committees last session.

King, who is on the short list to chair the House Public Education Committee this session, said some districts are still getting a large chunk of their overall funding through this program and that they cannot be cut off immediately. “I’m going to put a mechanism in place for school districts to roll off of the aid in 2021 and hopefully replace the dollars with another school funding system,” he said.

Other school finance advocates oppose the extension, calling it a “Band-Aid” that exacerbates the inequity among districts.

“It maintains an already inefficient portion of the system,” said Ray Freeman, deputy executive director of the Equity Center, which represents property-poor districts. Instead, he said, legislators should reform the base formulas so districts have access to a stable source of funds.

The Houston Independent School District will be a major focus this session because its voters in November rejected sending $165 million in local property taxes to poorer school districts. In the Texas finance system, districts with a wealthier tax base spend local money to help educate students in districts with less property tax money, as part of the “Robin Hood” or “recapture” system.

Texas Education Commissioner Mike Morath has warned that the state will probably move commercial properties from Houston ISD tax rolls to those of a nearby district. Houston legislators will be under pressure to find a way to ease the burden, as those property owners could face higher tax rates in their newly assigned districts.

David Thompson, an attorney representing Houston ISD, said a legislative win for Houston on school finance could also mean a win for other districts. “There are particular issues that would address some of the concerns in Houston and at the same time be helpful for schools across the state,” he said.

The state should update its formulas for determining which districts get transportation funding, and the state should also provide full-day pre-K funding for all districts, Thompson said.

“Everybody starts by saying, ‘There’s no money.’ There is,” he said. The state should allow the local dollars people are already paying to stay in education, instead of “siphoning local property taxes” for non-education purposes, he said.

But some legislators are saying Houston ISD voters dug themselves deeper into a school funding hole and should live with the repercussions. “I don’t think the Legislature has a lot of appetite to let Harris County out of recapture when everybody else is paying it,” King said.

[…]

School finance experts agree that increasing the basic allotment, the base funding each district receives per student, is likely to be the most popular way of changing the system. The House Public Education Committee recommended this approach in its interim report.

“The amount we set for the basic allotment drives the entire school finance system and, given our current system, increasing that amount would be a prudent move to help all districts,” said State Rep. Trent Ashby, R-Lufkin. “It’s important to note, this method can also be achieved through the General Appropriations Act alone, so it may also be the most realistic thing the Legislature can do this session without having to pass a stand-alone bill.”

It’s likely to be a favored proposal in the House, Ashby said. But like many other plans, it requires more dollars to public education, a difficult challenge this session, given that lawmakers have less money to spend than they did when they last met in 2015.

There’s also vouchers, the A-F grading system for accountability ratings, continued discontent with STAAR, curriculum and graduation requirements, etc etc etc. It’s important to remember that the local property tax boom that helped lead HISD and other districts into recapture is also a huge boon for the state budget, and not something legislators will give up easily. I think the best case scenario is some more money from general revenue, adjustments to the funding formula for transportation and pre-K as David Thompson noted, and a temporary extension of the Additional State Aid for Tax Reduction initiative with a plan to fix it next session. HISD will still owe recapture money even if all that is done, but I for one would feel a lot less aggrieved by recapture if these things happened, and would support a recapture re-vote to take place before detachment could begin. We’ll see how it goes.

Who is paying for public education

The state is paying less, while local districts are paying more.

The state of Texas will spend a projected $40.5 billion on public education during the current 2016-17 budget period, and when state officials tell you they’re spending more on education, they’re telling the truth.

Not all of the truth, but some of it. Their spending increases haven’t kept up with the burgeoning number of students. In the 2017 fiscal year, the state is planning to spend $19.6 billion, according to the Legislative Budget Board, up 7.4 percent from the amount they spent 10 years earlier.

The average daily attendance in 2017, one way to measure the number of students in public schools, will reach 5.04 million, an increase of 16.8 percent over the 4.3 million in Texas classrooms 10 years earlier.

This isn’t a brainteaser: The population has been rising faster than state spending. Texas is spending more, but not keeping pace.

Local and federal spending increases have covered the difference. Public school districts are on track to spend $26.2 billion in 2017, up 44.2 percent from 2008. Federal spending rose 22.2 percent to $5.1 billion.

On a per-student basis, local spending rose $990.21 over those 10 years, state spending fell $339 and federal spending rose $45.06.

The state is spending more than it was overall, but it’s spending less per pupil.

[…]

Try this exercise. Don’t fool with the overall cost of public education in each of those 10 years — leave that number alone — but keep the state’s overall share of 44.9 percent in place the whole time. State government would have spent $18.6 billion more than it did on public education over the past 10 years. Local school districts paid 44.8 percent of the total in 2008 and are on track to carry 51.5 percent in 2017. Had the burdens remained constant, local school districts would have spent $11.6 billion less over that decade.

For the second session in a row, state Rep. Donna Howard, D-Austin, has pre-filed a proposed constitutional amendment that would require the state to keep its share of public school spending at 50 percent or higher.

Pinch yourself — that would cut $10.3 billion from what the school districts and their property taxpayers are spending in the current budget, but it would cost the state government — fueled by sales and other taxes — the same amount. That’s back-of-the-envelope math, but you get the idea.

If the state agreed, as Howard has proposed, to cover even more of the cost of public education local schools could spend less. They’d be able to lower property taxes by a sizeable, politically significant amount. Legislators would be on the hook for education support they have been foisting off on local school boards.

Wouldn’t that be something? I’m sure you can guess what its odds of passage are, but it’s still worth the effort. This highlights perhaps the main reason why so many people called for the defeat of the recapture referendum last month. The money HISD will have to send to the state won’t go towards education elsewhere, which at least would be a good moral reason for supporting it. It’s an accounting maneuver that gives the state credit for spending on education when it really isn’t doing anything more. And remember, the Supreme Court said this was all fine. Meanwhile, Dan Patrick wants to divert money away from public education to the private school vouchers that he doesn’t want you to call vouchers because that’s an unpopular name. I’ve said it before and I’ll say it again: Nothing will change until we have different people in charge of these things. In the meantime, spare a bit of pity for your school board trustee, and tell your Rep and your Senator to support Rep. Howard’s bill.

TEA says no more special ed limits

We’ll see about that.

The Texas Education Agency has agreed to stop auditing school districts that give specialized education to more than 8.5 percent of students, officials announced Wednesday, cheering experts, advocates and lawmakers outraged by the policy.

In a letter to the U.S. Department of Education, which had ordered the state to eliminate the arbitrary decade-old enrollment benchmark, officials promised to suspend it and work to eventually end it altogether.

“TEA will send a letter to all school districts in the state reminding them of the requirements of IDEA (the federal law on special education),” wrote Penny Schwinn, the agency’s Deputy Commissioner of Academics. “In addition, TEA will … not use (the policy) for the purposes of interventions staging moving forward.”

But the agency also vigorously defended the policy, saying it was not a “cap” on enrollment, was not meant to save money and did not seriously punish districts for failing to comply. Officials also said they had no evidence that the policy had kept any disabled students out of special education, and they did not offer any plan for identifying and helping children who may have been shut out.

[…]

Advocates criticized the state’s letter, saying that “stakeholder input” is not the same as public input, that the policy still saved money by preventing spending increases as more students have entered the state, and that the state’s explanation for the enrollment drop did not make sense because federal laws have affected all states, while only Texas has had a large drop.

“Disability Rights Texas is disappointed by the Texas Education Agency’s defensive response filed with the U.S. Department of Education today,” the group said in a statement. “Students’ futures are held in the balance while TEA refuses to claim any responsibility for the dramatic decline in services to children with disabilities.”

Earlier in the day, 22 national disability advocacy groups wrote to the TEA to say they were “deeply troubled” by the Chronicle’s findings.

After the TEA released its letter to the federal government, Straus said in a statement that the agency’s decision to suspend the target was “good news for Texas families.”

A spokeswoman for the U.S. Department of Education said the department would review the TEA letter.

“Texas addressed multiple questions and issues and included a number of attachments,” said the spokesman, Jessica Allen. “The Education Department will carefully review the state’s response and, after the review is concluded, determine appropriate next steps.”

See here, here, and here for some background, and here for a copy of the TEA’s letter to the US Department of Education. Let’s just say that I’m not prepared to take the TEA’s word for it, and any “solution” that doesn’t involve ensuring that all school districts have sufficient funding to adequately provide for all of their special-needs kids is no solution at all. Until we have assurances on that score, this is all talk and no action. The Trib has more.

Hochberg speaks on recapture

We should listen and at least consider what he’s saying.

Scott Hochberg

Scott Hochberg

HISD loses the recapture money, one way or another, even if it doesn’t actually write a check.

And the state gets its money one way or another, because the taxes from the removed properties will go to a poorer district in Harris County, letting the state reduce its funding to that district.

But here’s the thing: If HISD writes a check to the state, it loses only the amount of the check. But, if the district gives up taxable property, it loses the recapture amount, plus all the bond taxes the district would have collected off that property.

That means the tax rate we all pay for bond payments, now and in the future, has to go up to make up for the taxes lost from the lost property.

And, once the property is gone, it’s gone forever. No take backs or fingers crossed.

State law actually favors districts that send cash. There’s an “early decision” discount available for those districts. A no vote means we pay the full price.

Voting no is like giving away your garage to avoid paying property taxes on your house. That’s why no district in the state has ever chosen the option of having property removed instead of sending a check. It’s a bad deal.

The argument for voting no is that it will “send a message” to the legislature that it needs to fix the school funding system, and the legislature will obey. Maybe, but I served 20 years in the Texas Legislature working on these issues, and I don’t buy it. It’s not a bet I would make, much less risk HISD taxpayers’ money on.

Hochberg isn’t saying anything we haven’t heard before, but because he’s Scott Hochberg, who knows more about school finance than anyone else in the state, we have to take it seriously. To a large degree, this comes down to how much of a chance you think there is that the Lege will take positive action after a No vote. (On that note, a small bit of dissent to what Hochberg says: If you do believe that the Lege could take positive action, you can also believe they’ll do something about how detachment works as well. It may well be crazy to believe this, but if you’re going to believe it you may as well be all in.) I maintain there is no “good” answer on this, and Hochberg is clear about the many shortcomings of the school finance system, which he worked hard and long to improve. It’s a question of what is less bad. Hochbeg’s case for a Yes vote on the recapture referendum is a strong one. Other people whom I respect make a strong case for No. Do what you think is least bad.

Another look at the case for HISD recapture

Dale Craymer taps the brakes on the vote-NO-on-recapture train.

BagOfMoney

Houston Independent School District voters face an unhappy choice this November – vote “YES” or “FOR” on Proposition 1 to authorize the state to recapture roughly $160 million of the school district’s property taxes or just vote “NO” or “AGAINST.”

It seems like a no-brainer. School board members, several other local officials and the Houston Chronicle editorial board are urging a “NO” vote, as a way to protest a state school finance system commonly referred to as “Robin Hood.”

What folks aren’t being told, though, is that a “NO” vote is a “YES” vote for higher taxes.

[…]

Folks advocating for a “NO” vote contend taxpayers have nothing to fear. The vote will “blow up” the school finance system and force the Legislature to “fix” it.

That may be a bad bet.

The Legislature has no good options. They could raise spending so that all districts get as much money as Houston. But lawmakers have no money and would have to raise $8 billion in new taxes – clearly a fantasy given a fiscally conservative Legislature, and an option most Houston and other voters statewide wouldn’t like.

Lawmakers could make a special provision and allow Houston to keep the money while all other districts go wanting. That would be a bad vote for those five out of every six lawmakers who don’t represent Houston, and could threaten the constitutionality of the current system.

Craymer calculates the tax increase, due to having a smaller base on which to repay bond debt, as $50 annually for a house with a $300K appraisal. Gotta say, that doesn’t sound too terrifying to me, though that value will increase over time and could impinge on future bond issues. Mostly, I agree with his assessment that it’s an extreme longshot to believe that the Lege will take meaningful action.

Even with all that, Craymer does not really endorse a Yes vote on recapture, he just wants to make sure everyone is informed about what it means before they vote. Daniel Williams pushes back on some of Craymer’s assertions, and goes deeper into the weeds.

If the proposition passes the money paid to the state goes to the general fund. In theory the lege is supposed to then move those funds over to finance under-financed schools – but there’s no guarantee that will happen and the lege has a long history of playing shell games with money in the general fund. If the prop does not match the reassigned property taxes go directly to other school districts, not through the general fund. The reassigned properties would be subject to the tax rates of the reassigned districts so those properties would likely wind up paying higher property taxes.

This, to my mind, is the very best argument for “no.” Even under the worst case scenario a “no” vote means more money for schools – maybe not Houston schools – but schools all the same.

Also, while it very likely that the lege is going to rework the system HISD may have a different course of action under the new process. If they are locked into buying attendance credits by a ballot initiative it may be difficult for them to legally get out of it.

Some have argued that a “no” vote is a dangerous game of chicken. That the legislature just doesn’t have any options to increase funding. Let’s dispose of this fiction: they could close the excise tax loophole, they could index the gas tax, they could stop letting WalMart keep a portion of the sales tax, they could tap the rainy day fund (that’s why it’s there), they could repeal the tax break for yachts they recently created, the list goes on.

Now, you might say that these options are not politically viable – and you’d be right. The current mess is what we keep voting for. The three biggest expenses in the state budget are education, public health and transportation. This is what we vote for when we elect people who say they’re going to “cut taxes” – cuts to education, public health and transportation. If we’re going to change that it has to start at the ballot box. So, vote “no” on the HISD question, but only if you’ll also stop voting for Austin-bound candidates who say they’ll cut taxes.

Daniel agrees there’s no good answer, but a No vote keeps some options open. I agree with that, and I strongly agree that if you’re going to vote No, you also need to vote No to politicians who refuse to address the underlying problems with the system. If you want a fix, do what is needed to get one.

UPDATE: Leah Binkovitz of the Kinder Institute weighs in, including some words of wisdom from former Rep. Scott Hochberg, one of the very few people in the state who actually understands the school finance system. Hochberg does not agree with a No vote on the recapture issue, which should give anyone pause.

Hey, here’s an idea: Increase funding for public education

That’s just crazy talk.

Texas House budget and public education leaders said Wednesday that the best way to overhaul the state’s school finance system is to increase the base amount of money it gives to each district per student.

While costly, boosting the “basic allotment” — currently $5,140 per student — would help ease systemic funding inequities among the state’s 1,200 school districts and reduce the growing number of wealthier districts that are required to send money to the state to help buoy poorer ones, according to state Reps. John Otto of Dayton and Jimmie Don Aycock of Killeen. The two Republicans, who are both retiring before the 2017 legislative session, chair the House Appropriations and Public Education committees, respectively.

The panels are meeting jointly Wednesday and Thursday to hear from various experts, organizations and the public on how to fix key provisions of the state’s complex, patchwork method of funding public schools. The assignment came from House Speaker Joe Straus in early June, weeks after a momentous Texas Supreme Court decision that upheld the system as minimally constitutional while also deeming it “undeniably imperfect” and urging lawmakers to make improvements.

Otto and Aycock added that the benefits of increasing the basic allotment could go beyond reducing the number of districts that must make “recapture” payments under the state’s Robin Hood plan.

They said the move could also lower the amount of money the state is required to send to a small share of school districts every year since the state forced them to cut property taxes. (Long-held opposition to the Robin Hood plan has gained some momentum recently with Houston ISD, the state’s largest school district, facing its first recapture payment.)

[…]

Rising property values have saved the state about $14 billion over the past decade, Otto told the panels Wednesday, citing calculations from the Legislative Budget Board. Local revenue has made up an increasing share of public education spending during that time.

“Essentially the burden is shifting to the locals, and the state is benefiting from that,” Otto said.

If the state were investing more, school property tax rates would be much lower, officials from state agencies and schools said Wednesday.

Nicole Conley, chief financial officer for Austin schools, told the panels the district would be able to slash its tax rate by 35 cents per $100 valuation if it didn’t have to pay recapture. That would save the average Austin homeowner $1,400 annually, she said, urging a “complete overhaul” of the system while acknowledging that is unlikely.

“I do think that a complete overhaul will be something that is going to require a substantial investment from the state; I’m not quite sure about your temperament and readiness to get there,” she said, adding that lawmakers have become “over-reliant” on recapture.

She suggested capping the number of districts required to pay recapture and providing transportation funding to those that still have to, which the state doesn’t currently do.

It’s nice to see these things discussed, but don’t get your hopes up. Both Reps. Aycock and Otto are retiring, and even if they were coming back there’s no way that any legislation to address public ed funding or school finance in this way would make it through Dan Patrick’s Senate. I’m glad that the concerns of school disitricts (not just HISD) that are being affected by recapture are being heard, but it doesn’t make the strategy of voting down that HISD referendum this fall any less chancy. The Chron has more.

HISD board members against the HISD ballot item

I missed this when it first appeared.

Three Houston school board members on Thursday evening publicly urged voters to oppose a measure that would authorize the district to forfeit $162 million to the state.

Trustees Jolanda Jones, Harvin Moore and Rhonda Skillern-Jones went on the offensive at the live-streamed board meeting, asking voters to join them in voting “no” on the Nov. 8 ballot measure required under the state’s school-finance system.

The board members are taking a gamble, calling on state lawmakers to revamp the funding system to relieve the Houston Independent School District when the Legislature reconvenes in January.

“We are King Kong in this state,” Jones said, noting that the Houston school system is the largest district in Texas and should have influence.

[…]

Here’s the rub: If the ballot measure fails and the education commissioner detaches property from HISD — an unprecedented move — the district will not be able to tax those properties to fund the repayment of debt. And the district has significant debt, including the ongoing $1.9 billion construction bond program approved by voters in 2012.

The district overall cannot take a position on the measure. However, it has launched an educational campaign, focused on the confusing state-mandated ballot language that will ask voters whether they approve purchasing attendance credits from the state. A “yes” vote to the credits means the district sends the $162 million.

If the funding system does not change, the Houston school district estimates that its “recapture” payment will rise to $257 million in 2017-18, $308 million in 2018-19 and $386 million the following year.

See here for the background. As the story notes, former HISD board member and current “education czar” for Mayor Turner Juliet Stipeche is also opposed to the referendum. I get where they’re coming from, and the escalating recapture payments are daunting, if not crippling. There is definitely an urgency in trying to get the Legislature to do something to avert the problem, or at least to mitigate it. The problem is that there’s no sign that the Legislature, or Greg Abbott and Dan Patrick, have any interest in lifting a finger for HISD. Indeed, it’s quite clear that at least on the Senate side, all the energy in 2017 is going to be on making things worse for public education in general. I get the idea, and I don’t think approving the issue does any good. I’m just not sure that defeating it isn’t worse, even if it does have the potential for an upside. See here for the official HISD page on recapture. What do you think about this?

The recapture blues

What are you gonna do?

BagOfMoney

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 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.

The genesis of this story is HISD having to make a recapture payment, which comes at an especially bad time for them. I wish the story had explored the HISD board’s handing the issue off to voters, as that subject needs to get more attention, but I’ll have to wait till another day for it. The bottom line is that Pierce is right, a statewide tax is the fairest way to do this, and it ain’t gonna happen any time soon. The Republican leadership wants to spend less on education, and it wants to point a finger at the school districts when they are left holding the bag. At the risk of repeating myself, nothing will change until the leadership of this state changes.

School finance can always get worse

Now here’s a brilliant, why-didn’t-we-think-of-that-before idea: Give schools less money as incentive to do better.

thebeatingswillcontinueuntilmoralei

Depending on whose measure you’re using, Texas is somewhere between 38th and 49th in the nation when it comes to per-student funding. Instead of wallowing in our poor luck, or paying something closer to the national average, Senate Education Chairman Larry Taylor convened a hearing Tuesday that considered a more sanguine response: A big round of applause for forcing schools to do so much with so little.

“The school districts are capable of generating high outcomes with low funding,” Education Resource Group President Paul Haeberlen assured the Senate Education Committee. “If you give them less money, they are forced to deal with it.”

Since 1999, Haeberlen’s group has measured and promoted efficiency in Texas school districts. This year, he was one of a handful of experts — along with Lori Taylor of the Texas Smart Schools initiative — invited to address an interim charge from Lieutenant Governor Dan Patrick to study “performance-based funding mechanisms that allocate dollars based upon achievement versus attendance.”

In other words, Patrick wants to study how to fund schools not based on their needs, but on their results.

That would be a dramatic shift in how Texas funds its schools. The current system funds schools based on their enrollment, with adjustments for local costs and students’ special needs. The state rates schools on their test scores and graduation rates, but doesn’t tie funding to them. Teachers’ groups are already fighting Texas’ efforts to tie teacher pay to test scores; Now, Patrick wants to consider expanding that to the entire school finance system.

But with the Texas Supreme Court’s recent encouragement — in the form of its school finance ruling in May — for lawmakers to shake up school finance in 2017, even the most fringe ideas are on the table. Taylor, for one, suggested he’d be game to design a whole new finance scheme from ground up.

“If we’re gonna start over,” he said, “my thinking is we start with what does it cost to educate a kid today. Let’s get some real facts. What does it cost, why are those costs there?”

The Legislature has consistently balked at that kind of honest accounting in the past, even though state law requires such a study every two years. During the recent school finance trial, expert testimony put the cost of public education at $6,404 more per student than the state already pays.

But Haeberlen assured the committee that what schools need isn’t more money, just an attitude adjustment. An analysis by his firm, ERG, produced a list of the most efficient school districts in Texas by comparing their spending efficiency with the quality of their test scores and other measures. Haeberlen suggested rewarding those few districts — possibly financially — and encouraging all the rest to follow their lead. “People want rewards, and the rest of the crew will follow,” he said. “It’s just how business works.

What could possibly go wrong?

The good news is that this idea really is as half-baked as it sounds, in that no concrete proposal exists as yet for it. In addition, the foundation for this plan is based on even more reliance on standardized test results, which may be a tough sell even to Republicans. But make no mistake, Dan Patrick’s goal here is to spend less on schools. How he achieves that isn’t important – if this dumb idea doesn’t fly, he’ll find another one. These two Trib stories have more on this “plan” and the hearing at which it was aired, so read up and know what we’re facing. Nothing will change until the Legislature changes.

The Observer talks to now-retired Judge John Dietz about school finance reform

A brief taste:

Former Judge John Dietz

One really important point, which was certainly not addressed [by the Supreme Court]: With economically disadvantaged students, the undisputed testimony is that if you didn’t grow up economically disadvantaged, when you arrived at school you had roughly a 1,500-word vocabulary and understood probably another 1,000 words. An economically disadvantaged child shows up knowing 500 words or less. What do you do about that?

The undisputed testimony is that it takes about time and a half over a period of four to six years to overcome the poverty of their experience. And you do it through preschool. You try to get them into a learning situation before kindergarten. When they’re in school, you try to have after-school programs, you try to pull their parents in to see the school not as an enemy but as a friend. You try to have summer programs that are not just remedial but try and get them excited about education. Because it’s the economically disadvantaged people who are substantially all of the dropouts that you lose beginning in eighth grade and ninth grade. And is the Legislature doing anything about that?

It’s undisputed, it takes 50 percent more of the resources to educate an economically disadvantaged child; 60 percent of our population in this state is currently economically disadvantaged and it’s only getting worse.

Go read the whole thing. If it makes you angry, it should.

Straus wants to study school finance

I appreciate the effort, but I plan to keep my expectations low.

Rep. Joe Straus

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.

[…]

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.

I trust that Straus has good intentions here, and even with Rep. Jimmie Don Aycock’s retirement, there are plenty of House members who are knowledgeable on school finance issues to take this up. The main problem of course is getting anything worthwhile through the Senate, where Dan Patrick is as obsessed with vouchers as he is with bathrooms. As is so unfortunately often the case, just not taking a step backwards is the main goal for 2017. The Chron and the Rivard Report have more.

On big money high school stadiums

Texas Monthly is against ’em.

BagOfMoney

As a part of a $220 million bond package, McKinney ISD is adding an opulent events center and 12,000-seat high school football stadium that will cost a total of $62.8 million. According to the Dallas Morning News, the stadium, set to open in 2017, will cost $50.3 million itself with $12.5 million used from a previous bond package passed in 2000 that will go towards stadium infrastructure: roads, water, sewer, electricity. Manhattan Construction has been hired to build the stadium, and if that name rings a bell, it’s because they were behind Houston’s NRG Stadium, Globe Life Park, and AT&T Stadium—home of the Dallas Cowboys of Arlington. The bond package also includes $62.5 million for upgrades throughout the district, with $51.4 million allocated toward additions and renovations to six of the schools in the district.

There will be $30.5 million spent on technology, including a program that would give all entering freshman a laptop. Three of the schools will see renovations to fine arts facilities, which sounds good, sure, until you consider that it will only bring them up to par. Cockrill Middle School, Evans Middle School, and McKinney Boyd High School’s fine arts programs have been burdened with “overcrowding in the band halls, lack of storage, practice space and congested fine arts hallways.” Meanwhile, the sanctuary of gladiator arts will sparkle in McKinney.

Placing athletics over academics and the arts is a tale as old as time. Sports—well, male-dominated athletics, particularly football and basketball—have more eyes and glory involved than pretty much every other high school institution outside of prom, and even then there’s room for debate. But the fact of the matter is that high school football, though we tend to spend exuberant amounts of money on it, doesn’t yield great returns. In 2011, the Dallas Morning News’ sports section conducted an investigation of Dallas-area football teams and their profitability, and only three districts had a net profit. McKinney’s had a net loss of $208,889.35.

I can’t say I approve of these big-ticket expenditures, either, but the voters did approve them. Obviously, only a few lucky (read: wealthy) school districts can provide this kind of extravagance for their students, but that’s not all that different than how we fund education in general, and we know what the Supreme Court thinks about that. I suppose many people would care less about how much McKinney and Allen and Katy spent on their football teams if our public schools were adequately and equitably funded in general, but we don’t live in that world. If everyone who is now complaining about McKinney’s event center worked towards that world, maybe we could.

TEA Commissioner has no opinion yet on federal transgender bathroom directive

Noted for the record.

Texas Education Commissioner Mike Morath on Tuesday praised the state Supreme Court’s recent opinion upholding the state’s public school funding system and demurred on questions about bathroom use by transgender students.

“Last time I checked, it was a free country,” Morath said in a wide-ranging interview with The Texas Tribune’s Evan Smith when asked whether Lt. Gov. Dan Patrick’s efforts to overturn a policy in Forth Worth allowing transgender students to use the bathroom that matches their gender identity clashed with Morath’s belief in the importance of local control.

The issue erupted last week when the Obama administration ordered every public school in the nation to allow transgender students to use the bathrooms and locker rooms that align with their gender identity rather than their biological sex.

[…]

But the Texas Education Agency is still reviewing the federal directive, Morath said Tuesday, contending that it was too soon for him to weigh in on the issue.

“Until we have a clear sense of our options, it’s just not appropriate for me to comment,” he said.

Not very illuminating. I’ll take him at his word about not having fully reviewed the federal directive, but that’s a temporary excuse. To be fair, if Dan Patrick shoves a potty package check bill down everyone’s throat, then Mike Morath’s opinion of the federal missive matters not at all. Still, it would be nice to know just what kind of person Mike Maroth is. Please have an answer ready the next time someone asks you about this, sir.

Supreme Court upholds school finance system

I’m stunned.

BagOfMoney

The Texas Supreme Court on Friday issued a ruling upholding the state’s public school funding system as constitutional, while asserting it could be better.

“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.”

“The judicial role is not to second-guess whether our system is optimal, but whether it is constitutional,” the ruling said.

It is the first time the state has won a school finance case. Justices Eva Guzman and Jeff Boyd delivered concurring opinions.

I haven’t had the time to review this, and it may take me a couple of days to do so. The immediate reaction I have is that the Supremes are saying it sucks, but not badly enough for them to do something about it this time. One wonders where the bar is, not that it does any good right now. I’ve posted an analysis that was forwarded to me in email beneath the fold. In the meantime, there are two things I know: One is that the Legislature is not going to spend any time on school finance this session, and two is that nothing will change until we elect different leaders. I don’t know what else to say. A statement from Mayor (and former State Rep.) Sylvester Turner is here, and the Rivard Report, the Observer, and the Austin Chronicle have more.

(more…)

We’re still lousy at funding schools

In case you were wondering.

BagOfMoney

Texas still ranks in the bottom third of states in spending per pupil in the U.S., with essentially no change in either amount or standing, a new study shows.

The finding doesn’t help, and could undercut, the state’s position in a long-running school finance case.

Figures compiled by the National Education Association and released Friday show that Texas schools are spending an average $9,561 per student in the current school year. That is well under the national average of $12,251 and ranks Texas 38th among the 50 states and District of Columbia.

Of neighboring states, only Oklahoma spends less, said Clay Robison, spokesman for the Texas State Teachers Association, the state NEA affiliate.

Last year, Texas also was 38th in the comparisons, based on numbers furnished to the NEA by state education agencies. In the 2014-15 school year, Texas spent $9,559 per student in grades K-12, based on average daily attendance. The national average was $12,061.

In recent years, Texas has fallen about $1,000 per child further below the national average, said Noel Candelaria, president of the state NEA affiliate. This school year, Texas is $2,690 below the national average. Five years earlier, in 2010-11, it was $1,685 behind, he noted. Back then, Texas spent $9,462 per child. The 2010-11 academic year was the last one before the Legislature whacked $5.3 billion from public schools.

“At a time when the Texas Supreme Court is considering a lower court ruling that found the state’s school finance system unconstitutional, these figures tell a shameful story,” Candelaria said in a statement.

[…]

Combining budget writers’ decisions in the past two legislative sessions, the Legislature put an additional $6 billion into public schools, Solicitor General Scott Keller noted.

But former Chief Justice Wallace Jefferson, who appeared as a private lawyer for Dallas, Fort Worth and dozens of other districts suing the state, said lawmakers have put the districts in a straitjacket by raising expectations of student performance while lowering the state’s share of the total tab.

Meanwhile, the Legislature effectively has imposed an unconstitutional statewide property tax because “once again local districts are without meaningful discretion over their rates,” he said.

Even if one accepts Keller at his word, that barely takes Texas back to where it was before the 2011 cuts, and that’s without accounting for enrollment growth or stricter accountability standards. I don’t expect Texas to be at the top of a list like this, but we do have an awful lot of students who live in poverty, and an awful lot of students who come from homes where English is not the primary language spoken. We also don’t do much in terms of pre-kindergarten, meaning that not only do we have a lot of high-need students to educate, we let them fall farther behind by not preparing them for school ahead of time. Yet we demand more of our districts and our students. It makes no sense.

The argument stated by former Justice Jefferson is basically what the Supreme Court found in the last school finance lawsuit, in 2005. That led to the 50-cent cut in local property tax rates, which was supposed to be made up by the state in the form of the business margins tax and other sources. We all know how that has gone. Having the state pay a higher share of the public education budget is the right idea – local districts have been shouldering an ever-increasing about of the burden in recent years – but it needs to be done in a way that doesn’t allow the state to shirk its responsibilities. I hope that’s what this Court has in mind, and if so I wish them luck in writing an opinion that will get the Lege to do what it needs to do.

First look at how HISD will balance its budget

Seems to be fairly well-received.

Ken Huewitt

The Houston school district’s interim superintendent on Thursday rescinded his proposal to reduce funding for gifted students amid concerns from parents and board members.

At the same time, Ken Huewitt proposed bolstering the budgets of schools with significant concentrations of low-income students, using $21 million from federal funds. Schools with the highest percentage of poor children would get the most extra money – an attempt to address the academic challenges at what Huewitt called “hyper-poverty” campuses.

Huewitt’s plan calls for revamping how campuses are funded at the same time as the Houston Independent School District faces an estimated $107 million budget shortfall in the coming year. The financial woes stem from the district expecting, for the first time, to have to send tens of millions of dollars back to the state because it is considered too property wealthy.

“This is about funding the needs of our kids,” Glenn Reed, general manager of budgeting for the school district, said after the board’s budget workshop Thursday.

To balance the budget, Huewitt has proposed several cuts, including ending the $10 million bonus program for teachers and other school staff, and cutting $11 million in contracts with outside vendors.

He also would eliminate the $19 million that went to help a few dozen low-performing schools, as part of former Superintendent Terry Grier’s “Apollo” reform program.

See here and here for some background, and remember again that this is not HISD’s fault, it’s the Legislature’s fault. I don’t know how the search for the next Super is going, but if the search firm/screening committee isn’t asking every candidate detailed questions about how they would have handled this situation, they are not doing an adequate job. I hate that HISD is having to go through this, but from what we have seen so far, Interim Superintendent Huewitt seems to have done a pretty good job of it. We’ll see what comes out when the Board votes on the budget.

Lawsuits and low oil prices

Both are threatening the next Texas budget.

BagOfMoney

Last week, lawyers for the state of Texas got the latest in a string of bad legal news.

A lawsuit challenging the state’s foster care system as inhumane appeared to gain steam when an appeals court rejected the state’s request to stop the appointment of two “special masters” to recommend reforms.

The overhauls that have been discussed so far would be pricey to implement — as much as $100 million per year, according to rough estimates from the state comptroller’s office. But they actually are on the lower end of all the extraordinary legal expenses the state is facing at a time when stubbornly low oil prices are simultaneously threatening to blunt its coffers.

Three other lawsuits against the state — two of them pending before the Texas Supreme Court, with rulings expected soon — could cost the state billions if it ends up on the losing side. Experts say the state may have the cash to cover one of them in a single budget cycle, but probably not any more than that — especially if low oil prices persist, dampening the state’s stream of tax revenue. That could mean budget cuts when lawmakers meet for the 2017 session, at least if the Republican-dominated Legislature remains steadfast in its refusal to tap the state’s nearly $10 billion Rainy Day Fund.

Two of those three lawsuits, both tax cases, could cost the state a combined $10.4 billion in tax refunds and up to $2 billion in collections per year beyond that, according to the comptroller’s office, which is closely monitoring them.

Potential cost estimates do not exist for the last case — a high-profile challenge to the state’s public education funding system — but past school finance rulings have cost the state billions.

Such sums would handily eclipse the state’s $4.2 billion projected surplus, which could itself dwindle if oil prices remain low and further blunt tax collections. (Comptroller Glenn Hegar has already lowered projections once.)

“Any of those by themselves are a huge hit,” said Dale Craymer, president of the business-backed Texas Taxpayers and Research Association. “But if you start losing two or three of those issues then, yeah, it’s much more questionable that the state’s general revenue reserves are sufficient to cover that.”

See here and here for some background. There’s not much that can be done about the price of oil, though after years of living it up, and of politicians claiming credit for all that robustness, I doubt there’s much sympathy out there for us. The rest are the result of policy and/or legislative decisions, some of which may well bite us in the bottom line. I’m rooting for the Supreme Court to stick it hard to the Lege on school finance, but the other cases I’d rather see the state win. As much political hay as there is to be made in a chaotic situation, there’s nothing good from a public policy perspective on those cases, and I have little faith the Lege would do a good job cleaning up the mess. But on school finance, all bets ought to be off. We’ll see how it goes.

North Carolina takes a big step backwards on equality

Shameful.

RedEquality

Wednesday was a whirlwind day in North Carolina’s government. The legislature convened a special session, a complicated multi-part bill was introduced, it passed through the House and Senate — both Republican controlled — and Gov. Pat McCrory (R) signed it into law. Just like that, North Carolina became the state with the most hostile laws against LGBT people in the country.

Targeting Charlotte for passing its recent LGBT nondiscrimination ordinance, the sweeping legislation preempts municipal nondiscrimination ordinances, essentially making it illegal for cities and counties to extend protections to the LGBT community. Only two other states, Arkansas and Tennessee, have such a law, but North Carolina’s bill goes much further. It also bans transgender people from using restrooms that match their gender unless they’ve managed to change their birth certificate, and prevents civil suits from being filed in state court even when discrimination is documented by the already-poorly-funded Human Rights Commission. On top of all the anti-LGBT measures, the legislation went further and prohibited cities from mandating any employment compensation (minimum wage, benefits, etc.) beyond what is offered at the state level.

Gleefully signing the bill that he openly called for, McCrory claimed that “the basic expectation of privacy in the most personal of settings, a restroom or locker room, for each gender was violated by government overreach and intrusion by the mayor and city council of Charlotte.” Calling the ordinance a “radical breach of trust and security under the false argument of equal access,” he said that he believes it “defies common sense and basic community norms by allowing, for example, a man to use a woman’s bathroom, shower or locker room.”

In a video statement, Lt. Gov. Dan Forest (R) added that “the loophole this ordinance created would have given pedophiles, sex offenders, and perverts free reign to watch women, boys, and girls undress and use the bathroom.”

What is perhaps most troubling about the passage of this law in North Carolina is that it could pave the way for other states to also target the transgender community for discrimination. South Dakota’s may have been vetoed, but Tennessee’s supposedly dead bill has already been revivedthis week as several other states continue to introduce theirs.

Kansas lawmakers are considering a bill that would ban transgender people from bathrooms and allow people to sue schools and government agencies if they saw transgender people in their facilities. Republicans in Minnesota’s legislature have similarly introduced a bill targeting public restrooms — albeit without the lawsuit provision. And when the Michigan Department of Education announced this week that it was considering some protections for transgender students, it prompted a GOP backlash that could result in legislation to either overturn or block them.

What happened in North Carolina could prove to be the deadly recipe that helps these other discriminatory bills actually make it across the finish line.

[…]

The very opposite is happening in Georgia. Gov. Nathan Deal (R) has until May 3 to consider an anti-LGBT bill that has been widely scorned. Just this week, Disney and Marvel promised to pull out of the state if he signs it, following pressure from other companies like Apple and the NFL that have made similar threats, including not bringing the Super Bowl to the state. This was after plenty of public debate during the many weeks the legislature spent considering and amending the bill.

The test for North Carolina will be to see what political and legal consequences there will be for the lawmakers who rushed this legislation through. Democratic National Chair Debbie Wasserman Schultz (D-FL) scorned the Republican party for being “stuck in the Stone Age on LGBT equality.” Denouncing North Carolina’s lawmakers for “steamrolling over local officials just because they had the courage to stand up for transgender rights,” she promised that “our friends in the LGBT community deserve better and so do all the people of North Carolina.”

The key, I think, is for the companies and organizations that have been threatening action in Georgia now need to actually take those threatened actions in North Carolina, and they need to do it quickly and with as much fanfare as possible. There have to be consequences – not just at the ballot box, but right now – or else we will see this same sort of bill get pushed through in a lot of other states. And yes, that includes Texas. Our next legislative session is not for another ten months, by which time one hopes it has been made clear that this sort of legislation is Not Acceptable, but we could get a special session on school finance much sooner than that, and there’s no telling what could happen. Our legislative process is not designed to work in this kind of lightning-strike manner, but remember that the 2011 redistricting bills were passed during a special session with minimal public input. I can also easily envision some kind of amendment to a school finance bill that forbids ISDs from enacting anti-discrimination policies or accommodating transgender students. So don’t think this can’t happen here, or that it can’t happen before next year. It can, and it will if we’re not ready for it. TPM, Daily Kos, The Slacktivist, and Slate have more.