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Texas Legislature Clears New School-Finance Plan

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Texas lawmakers last week cleared a new school-finance plan that would allow wealthy districts to keep locally generated funds once they exceeded a new state-mandated minimum rate for property taxes.

Leading state officials expressed relief late Thursday after the bill passed the House on a 92-to-57 vote and won Senate approval 21 to 10.

Even so, some of those involved in the long debate over the issue questioned whether the plan would satisfy the equity requirements imposed in a pair of unanimous rulings by the state supreme court.

State District Judge Scott McCown was scheduled to receive the legislature's plan on Monday, two weeks after he cut off state funding to schools following a legislative stalemate that left lawmakers empty-handed when the original April 1 deadline arrived.

The judge also was expected to receive a court-ordered school-funding plan that would redistribute existing funds based on local tax effort.

Officials estimated that the bill passed last week would require a little more than $1.2 billion in new state funding--about the same amount earmarked for second-year funding of the finance plan that passed the legislature last year only to be struck down by Judge McCown and the supreme court.

Legislative aides said last week they were unable to estimate how much the bill would raise local property taxes across the state.

No 'Recapture' Provision

The bill would require all local school districts to raise property-tax rates to $0.72 per $100 of assessed value and would equalize the revenue, promising $2,200 per student at that tax rate. In 1995, the bill's final year, the minimum tax rate would rise to $1.00 and guarantee $2,800 in per-pupil funding.

Beyond the equalized foundation program, the bill would allow school districts to increase property taxes by $0.45 per $100 for enrichment, construction, and debt service.

Unlike a plan rejected by the House last month, which would have pooled district revenues and redistributed excess funds from wealthy districts to poor schools within new tax districts based largely on county lines, the plan passed last week does not employ the con troversial "recapture" or redistribu tion provision.

Instead, the state would promise districts up to $967.50 per student if they adopted the full $0.45 optional rate. That amount would rise to $1,260 per student at the full rate by 1995. Districts that were able to generate more would be allowed to keep the excess.

To guard against a windfall from the enrichment funding, the bill would not allow more than 2 percent of the state's 1,052 districts to spend more than 110 percent of the amount guaranteed by the state, effectively capping per-pupil spending at $3,483 next year and $4,466 in 1995.

The bill also includes $50 million in emergency construction grants for the next two years, provides about $160 million for prekindergarten classes for poor 3-year-olds, and earmarks about $95 million for technology programs. It also lengthens the school year from 175 to 180 days.

Observers said the bill was able to win lawmakers' approval because it allowed some room for wealthy dis tricts to raise and keep extra funding.

"They were really trying very hard to level all of the school systems up," said Sonia Hernandez, ed ucation director for Gov. Ann W. L Richards. "There is great hope that this will satisfy the court."

The legislature's solution came after Lieut. Gov. Bob Bullock, who presides over the Senate, and Speaker of the House Gibson Lewis spent a weekend consulting with various interest groups and negotiating in their Capitol offices.

Rembrandt of Compromise

"If you say politics is the art of compromise, then Bullock was a Rembrandt over the weekend," said Rafe Greenlee, the Lieutenant Governor's press secretary.

The final plan was sent to a House-Senate conference panel on Wednesday, where Governor Richards stopped by to do some lunch-hour lobbying, aides said. The conference panel, after some bargaining of its own, unanimously endorsed the plan.

Despite the legislative support, representatives of low-wealth school districts last week predicted that the bill "will not provide a constitution al system."

In a letter to the Governor, the Equity Center, a group involved in earlier finance challenges, stated that despite its neutral stand as the legislature acted, it would oppose the bill in court.

Craig Foster, the group's executive director, wrote that the plan does not provide equitable funding for facilities and "does not provide a clear equity standard." The group argued that the bill's spending cap "is not an equity standard; it is a mechanism for leveling down."

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