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Nearing Deadline, Texas Lawmakers Reach Finance Compromise

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Nearly a year and a half after the Texas Supreme Court ordered lawmakers to design a new state school-finance system, the legislature appeared poised late last week to pass a compromise plan just in time to meet this week's June 1 deadline.

State District Judge F. Scott McCown scheduled a hearing for that date either to receive a state plan or to issue an injunction that would freeze all state funding for the schools.

But lawmakers have agreed in a conference committee on a new bill that would force wealthy school districts to choose a way to reduce their tax bases, thus curbing the disparities in per-pupil funding targeted by the court. Both the Senate and House were expected to vote on the measure late last week or over the weekend.

The plan was approved in conference on the same day that officials distributed June state-aid checks to districts, which could be the last for some time if the measure were to fail.

Under the compromise plan, which Gov. Ann W. Richards pledged to sign, the state's 109 wealthiest districts would be given five options for reducing their tax bases below $280,000 per weighted student. The final bill was similar to a measure passed by the House late last month. (See Education Week, May 26, 1993.)

If a district failed to approve one of the options, the state education department would be required to transfer commercial property to the tax rolls of nearby poor districts until the wealth limit was met.

Unfunded Mandates Eased

In addition to the finance measures, the conference committee's bill includes accountability provisions that would set performance measures for local schools and districts. The state education commissioner would gain greater authority to loosen regulations on high-performing districts and to take over failing districts.

The bill also would ease mandated programs not funded by the state.

The legislation would repeal the state's career ladder for teachers, because of high administrative and evaluation costs experienced by many districts. In addition, state efforts to encourage districts to use alternative fuels would be curtailed.

The final bill does not include, however, House-backed provisions to modify the state's "no-pass, no-play'' law, ease a required 22-to-one student-teacher ratio for K-4 classes, and reduce the school year from 180 days to 175 days to allow increased time for staff development.

Negotiations between House and Senate leaders broke down briefly last week as Senate leaders said they would not support a finance bill that included any attempt to soften the provisions of the state's 1984 school-reform laws, including the class-size limit and the controversial ban on extracurricular activities by low-achieving students.

Bargaining resumed and was quickly completed once those items were dropped, observers said.

More Troubles Ahead

As all signs pointed toward an end to the state's most recent school-finance crisis, officials began to ponder troubles that may lie ahead.

In addition to the school-finance plan, Texas lawmakers last week were finishing work on a biennial budget as the legislative session drew to a close. Officials speculated that a relatively modest increase in education funding--$1.1 billion in new money, which is expected only to cover enrollment growth--may spell trouble as critics continue to argue that the state's finance system remains vastly underfunded.

"We are concerned that there is not enough money in the system,'' said Sonia Hernandez, the Governor's education-policy director. "So long as the increase is not beyond enrollment growth, the numbers are not going to look good.''

Officials anticipate that not long after the new finance plan becomes law, it will soon be challenged on the grounds that lawmakers have only managed to put a lid on wealthy districts, while doing little to bring poor districts up to a sound funding level. Opponents are also expected to blast the state for failing to take on a greater share of school funding.
"We're going to be sued,'' Ms. Hernandez predicted. "It's just a matter of who and when.''

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