School finance still waiting to make its way to the front of class
March 10 marks the 60th day of the 85th Texas Legislature and the deadline for the unrestricted filing of bills and join resolutions other than local bills, emergency appropriations and bills that have been declared an emergency by the governor.
One of the bills that made it under the deadline is House Bill 21, which was filed Monday by Rep. Dan Huberty, who was named Chairman of the House Public Education Committee. The bill relates to the school finance system, which has been an ongoing topic of discussion since the Senate and House introduced their budget proposals. House Bill 1 and Senate Bill 1, were unveiled in January and there were differences between the two budgets regarding funding for public education.
For the 2018-19 biennium, SB1 proposed adding $2.65 billion to cover public school enrollment growth, which is expected to top 80,000 each year, according to the bill. HB1 set aside funding for public school enrollment to grow by about 165,000 students over the next two years and includes an additional $1.5 billion that could be spent only if the Legislature reforms the school finance system.
The approved state budget for the 2016-17 biennium was $209.43 billion, which is a 3.56 percent increase over 2014-15. It included an increase of approximately $1.5 billion to the State’s Foundation School Program (FSP) above $2.5 billion for enrollment growth.
The FSP establishes the amount of state and local funding due to school districts under Texas school finance law. The FSP has two main components, operations funding and facilities funding, each of which is tied to the tax efforts of school districts. The operations funding component of the FSP provides school districts with assistance in financing their maintenance and operations.
The facilities funding component of the FSP provides school districts with assistance for debt service related to school facilities through two programs. The first is the Instructional Facilities Allotment program which provides funding to school districts for debt service payments on debt associated with the purchase, construction, renovation and expansion of instructional facilities. Districts use this funding to make annual debt service payments on qualifying bonds and lease-purchase agreements. The Existing Debt Allotment program provides funding to school districts for debt service payments on eligible bonded debt. FSP is administered by the Texas Education Agency.
Gov. Greg Abbott held his State of the State address in February and declared early education as his first of five emergency items. “I think we can all agree it’s time to put school finance litigation behind us,” said Abbott during his address. “It’s time to stop fighting about school finance and start fixing our schools.
“To improve our schools we must begin by building a strong foundation at the very beginning. Our goal should be to ensure all Texas students are performing at grade level in reading and math by the time they finish the 3rd grade.
“To begin that process, my budget provides additional funding for schools that adopt high-quality Pre-K programs. To begin the process of building a better education system in Texas, we must improve early education. This is why I’m declaring early education as my first emergency item as governor.”
In May of 2016 the Supreme Court of Texas issued a ruling upholding the state’s public school funding system as constitutional. This was the seventh time since the late 1980s that the supreme court has been called upon to assess the constitutionality of the Texas school finance system. More than two-thirds of Texas school districts were part of the latest case brought against the state. The court said in its decision that the system meets minimum constitutional requirements, while adding that Texas children “deserve transformational, top-to-bottom reforms that amount to more than Band-Aid on top of Band-Aid.”
HB21 is the most recent addition by lawmakers to improve funding for schools amid a budget shortfall for the state. The bill proposes to add about $1.6 billion into the public education system, boosting funding for almost every school district in Texas.
The bill would add $210 per student for more than 95 percent of school districts- for a basic allotment of $5,350 per student. It would roll both the high school allotment and the additional state aid for non-professional staff into the basic allotment.
According to the Texas Education Agency, recapture, also known as “Robin Hood,” is a mechanism in state funding formulas that ensures that a district’s property wealth per student does not exceed certain levels, known as equalized wealth levels. HB21 would provide a reduction of the recapture by the state of revenue from higher-wealth districts for redistribution to lower-wealth districts. The bill would lower recapture by approximately $163 million in 2018 and $192 million in 2019, and create a hardship grant to assist districts that will lose money once Additional State Aid for Tax Reduction (ASATR) expires. ASATR is funding that the state provided to school districts in order to encourage them to reduce their tax rates to $1 per $100 in property valuation in 2006. State law calls for that money to go away in 2017. In the current school year, ASATR funding provides an estimated $350 million to the state’s public education system.
HB21 would provide a funding boost for districts based on the number of students with dyslexia they serve. It would also change transportation funding formulas that gives high-wealth districts and charter entities access to such funds for the first time.
The bill is currently pending. The committee will resume discussion of school finance and other bills next Tuesday, when possible action is expected.