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Texas Lawmakers Weigh Seven Plans on School Finance

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Austin, Tex.--The state legislature convened its special session on school finance here last week with a prayer for a miracle and predictions of a tax increase.

The tax increase, legislative leaders said, may be necessary to fully fund a new formula for financing the state's schools. In a ruling last October, the Texas Supreme Court ordered the legislature to devise a fairer method of funding schools by May 1.

The "miracle," as described by House Chaplain Gerald Mann in the invocation that opened the session, was for lawmakers who "were elected to raise money by taxing people who won't re-elect them if they do."

Many lawmakers said the debate over the school-funding formula--itself a complex topic--was sure to be complicated by political factors. Thirty-one members of the House and four senators face re-election battles in next week's primary, and so may be reluctant to vote for new taxes.

A task force on school finance formed by Gov. William P. Clements Jr. unveiled a "no new taxes" plan last week. The task force, whose members were appointed by Mr. Clements, Speaker of the House Gib Lewis, and Lieut. Gov. William P. Hobby, calls for a $234.6-million increase in state school aid in its first year.

Over all, it proposes a $4.3-billion increase over five years. It would raise the basic per-pupil allotment to $2,100 by the end of that period, up from the current level of $1,477.

Six other plans to create an equitable school-finance system were being discussed around the Capitol last week. Four involved some sort of tax increase, although only one recommended a specific tax plan.

Speaker Lewis, who had earlier said he was opposed to a tax hike, indicated last Continued on Page 23
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week he would vote for a tax bill "if that's the need and it can be proven."

Lieutenant Governor Hobby said the state would be forced to adopt some kind of tax package to meet the court's mandate. He supports a state income tax to raise the funds, but said he was doubtful the legislature would approve a tax plan anytime soon.

"It's not going to happen this session--I understand that," he said. Mr. Hobby added, however, that he "wouldn't be at all surprised if it didn't happen before the year is out."

Of the school-finance plans, the most expensive calls for an additional $15 billion in state spending over five years. One calls for no new money, but would reallocate existing funds.

Governor's Proposal

The proposal offered by Governor Clements's task force would provide more funding for poor school districts by making several changes in the state's current formula.

For example, the plan recommends that the state increase its aid to districts so that the statewide average contribution reaches 50 percent of total costs. The state's current share is about 43 percent.

It also proposes guaranteed equalized funding for local tax effort up to approximately the state average.

This means that poor districts, which often must tax at a high rate to receive low revenues, would only have to impose the maximum tax allowed by the state to receive revenue equal to the state average for such tax effort. The rate suggested is lower than the current levies of many poor districts. The state would make up the difference.

The plan does not call for a tax increase in the first year, however; it suggests the money come from shifting existing funds. Mr. Clements, who is not seeking re-election in November, opposes a tax increase.

Criticism of Plan

Although legislative leaders agreed the task force's plan would serve as the starting point for the debate, the proposal received pointed criticism from some educators and lawmakers.

"While there are certainly parts of this plan with which I agree," said Representative Ernestine Glossbrenner, "there are other parts I cannot in good faith endorse."

Ms. Glossbrenner, chairman of the House Committee on Public Education, served on the task force.

Both Ms. Glossbrenner and Henry G. Cisneros, the former mayor of San Antonio and a member of the panel, said the Clements plan would not add enough new money into the system in the first year.

At a press conference following the release of the task force's recommendations, a coalition of 13 education organizations denounced the report.

"We believe the task-force plan is an affront to the court," said Patti Clapp, president-elect of the Texas Association of School Boards.

The plan's recommended $234-million first-year increase "represents approximately 20 percent of what is needed in additional state funding for the 1990-91 school4year," Ms. Clapp said.

And one of the plaintiffs in the suit that forced the change called the report irresponsible.

"The Governor was calling a task force not to study the issue, but to legitimize his support of no tax increase," said James R. Vasquez, superintendent of the Edgewood school district in San Antonio.

Mr. Vasquez's district initiated the suit that led to the supreme court's decision in the case, Edgewood v. Kirby.

But Charles Miller, the Houston businessman who chaired the task force, argued that the group's plan was a viable way to create equity without a huge tax increase. But he also acknowledged that "there's no magic formula which will once and for all fix the system perfectly."

Confusion and Consensus

Disagreements among members of the task force--and the multiplicity of plans--helped create an atmosphere of confusion in the Capitol. But there were signs last week the Senate was beginning to forge a consensus around one plan.

The Senate began its deliberations with a "tutorial" on finance equity--complete with graphs and charts on an overhead projector.

Billy D. Walker, director of the Texas Center for Educational Research, said the purpose of his presentation was to help lawmakers understand the "basic principles of school-finance equity."

Still, some senators said interpreting the court's decision in the case was difficult.

Among them was Carl A. Parker, chairman of the Senate Education Committee and sponsor of the bill drawing consensus support. "Some pretty good lawyers disagree on what the court's decision in Edgewood v. Kirby requires of the legislature--especially as regards to funding," he said.

Senator Hector Uribe, who has sponsored another equity plan that was drafted with the help of the plaintiffs, suggested that the Senate receive a legal analysis of the case.

"I think some of our members may be laboring under a misunderstanding of what the supreme court said," he told the Senate.

Parker Plan's Fast Track

Even so, Mr. Parker said his plan, which he expects to formally introduce this week, may be ready to be sent to the House "in 10 days to two weeks."

The plan is similar to that of the Governor's task force, his aides said, except that it calls for more funding sooner. Mr. Parker's bill proposes that the state provide about $800 million in new funding in its first year, with increases of about $1.1 billion per year for two years after that.

The bill will be considered first by the whole Senate, and then referred to a special panel comprising the members of the education and finance committees.

Mr. Parker said the bill would probably get the votes of a majority in the Senate. But he declined to predict how it would fare in the House, or to say what kind of tax package it would include.

An "aviation tax" on airplane fuel could raise about $50 million, he said, and a broadening of the sales tax could also deliver new funds. A statewide income tax should only be considered "as part of an overall tax-reform package," he said.

"I'm also considering a tax on newspapers," he jokingly told a group of about a dozen reporters who had surrounded him just off the Senate floor.

Other Ideas Abound

Although most attention has focused on the plans developed by the task force and Mr. Parker, the five other proposals are also being debated among lawmakers.

Under a plan proposed by State Comptroller Bob Bullock and Senator Bill Haley, the state would provide an additional $800 million in funding for the first year.

A quarter of that money would be used for financing state bonds for school construction. Of the remaining $600 million, 58 percent would be earmarked for salary raises for teachers.

The plan is a temporary one-year fix of the system, and would expire Aug. 31, 1991. It would raise the necessary funds by increasing existing taxes.

The "Equality Plan" is supported by the plaintiffs in the suit and sponsored by Senator Uribe and Representative Gregory Luna.

This plan would increase state aid by $800 million in the first year of implementation, by $1.8 billion in the second year, and by $3 billion in the third. Mr. Uribe has proposed a state lottery to help pay for the plan.

The plan is unique in that it would consolidate school districts, although for tax purposes only. State funds would be provided on the basis of a minimum countywide tax effort, and then redistributed to school districts within that county on a weighted per-pupil basis.

Senator H. Tati Santiesteban's plan was developed by the Equity Center, an organization representing 264 low-wealth districts, many of which were plaintiff-interveners in the case.

The Equity Center's plan asks for $10.5 billion in new state funds over five years. It would equalize funding for 95 percent of the districts in the state.

The plan also contains a "doomsday" provision that would shut down Texas schools if a shortfall in state aid one year was not corrected by the legislature the next.

The state board of education's proposal would cost the state $944 million in its first year of implementation and about $3.6 billion in its fifth, with increases possible to adjust for inflation. It is the most expensive plan under consideration.

Besides providing increases in basic funding, the board's plan also contains language providing for a longer school year, incentives for year-round schools, and group health insurance for teachers, among other provisions.

No new state funds would be required under a plan endorsed by the Texas Research League, a public-policy think tank.

Like the Equality Plan, the t.r.l.'s proposal would create a county-based tax system.

As of last week, the proposals offered by the state board and the trl had yet to find sponsors in the legislature.

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