School-Funding Plan Advances in Texas Legislature

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The Texas House is expected this week to take up a bill calling for regional taxing districts and redistribution of some locally generated school revenue in order to meet a court-imposed April 1 deadline for revamping the state's school-funding system.

The Senate last week passed the bill, along with a pair of constitutional amendments that would allow tax redistribution throughout the state and base distribution of the state's "available school fund," which is currently provided to school districts according to population, on such factors as local poverty and property wealth.

The recent flurry of legislative action comes after key lawmakers decided to drop a widely discussed proposal for a statewide property tax, under which the state would have collected and distributed most locally generated school revenue.

The legislature has been under the gun to pass a revamped school-finance system since the state supreme court in January overturned last year's hard-fought compromise and threatened to cut off school funding if the legislature did not meet the April deadline. (See Education Week, Jan. 30, 1991.)

The most recent plan, known as Senate Bill 351, would establish 20 regional taxing districts across the Lone Star State and create a four-tiered funding system. At an annual cost of $859.2 million, the bill also would provide a guaranteed per-pupil funding level and would "recapture," or redistribute, any revenue raised above the guaranteed amount.

Without passage of a constitutional amendment, the redistribution would be limited to the regional tax district where the revenue was generated.

'Not Many Options'

Under the four-year plan sponsored by Senator Carl A. Parker, chairman of the Senate Education Committee, the top two "enrichment" tiers would not be activated during the program's first two years.

In fiscal 1992, the plan's first year, districts would tax property at $0.70 per $100 of assessed value to fund the basic school program.

The first-tier funding would guarantee each district $2,170 in per-pupil funding. Additionally, districts would be allowed to levy another $0.40 per $100 to pay for facilities. In fiscal 1992, the second-tier funding would be guaranteed to yield $20 per student for each penny of tax effort.

The basic program would guarantee per-pupil funding of $2,325 in the bill's second year, rising to $2,525 in the third year, and $2,760 in its final year. At that point, according to an outline of the bill, the mandatory base property-tax rate would reach $1 per $100.

Facilities funding would rise in the plan's second year, but then would be scaled back in the third and fourth years as the enrichment tiers allowed the overall property-tax rate to continue to rise.

Lawmakers point out that a four-year phase-in of the recapture provisions would soften the bill's impact for wealthy districts, which stand to lose funding under the new system.

While SB 351 moved easily through the Senate and has faced only a fraction of the dissent that followed Senator Parker's statewide property-tax plan, observers said that it will likely draw a stiff challenge when it reaches the House floor.

House leaders said they expect some changes in the plan, but noted that they do not see many alternatives to SB 351's main themes.

"There are not that many options left once you rule out the statewide property tax," said John Bender, a spokesman for Speaker of the House Gibson D. Lewis.

Mr. Bender said he was unsure how the House would address the constitutional amendments, which he noted must be passed within a week in order to gain spots on the May 4 statewide ballot.

More Local Control Sought

While some educators described SB 351 as a positive step, they added that they would like to see House lawmakers put more local control into the plan--perhaps by shifting from the 20 regional taxing districts to county boundaries. Texas has 254 counties and 1,052 school districts.

A spokesman for the Texas Association of School Boards, which has been one of the leading opponents of a statewide property tax, said the group has lingering concerns about SB 351.

"The principal problem we have is that it doesn't allow local enrichment above an adequate and efficient level," said Frank Battle, a legislative consultant for the tasb Because the bill strictly limits district spending and imposes a ceiling on many of the state's wealthy districts, he said, many school officials fear a reduction of innovative programs.

The tasb has endorsed a plan developed by the Equity Center, a coalition of low-wealth districts.

That plan, which observers said had little prospect of being approved, would not redraw taxing boundaries but would require more state funding and less redistribution of local revenue.

Vol. 10, Issue 23

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