Texas House Balks at School-Finance Compromise

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Texas school administrators last week scrambled to lay plans to get through the rest of the school year relying on local budgets or emergency loans after the legislature balked at a compromise plan to overhaul the state's education-finance system.

Rejection by the House of the finance-reform bill left lawmakers and educators at the mercy of an impatient state supreme court, which has threatened to halt state aid to schools if the legislature did not deliver dramatic changes in its $14-billion funding system by April 1.

District Court Judge Scott McCown--who overturned the legislature's 1990 school-funding solution in September and was criticized for being too lenient by the supreme court in its January ruling--scheduled a hearing for this Monday to respond to the stalemate.

The finance debate has dominated the legislature's work during the current session and, over the past two weeks, commanded nearly constant attention as House and Senate leaders searched for a compromise plan with enough support to pass.

Nevertheless, while the Senate passed the bill by a 21-to-10 vote, the proposal fell well short of a majority in the House, losing 87 to 63.

Shortly after the vote, the legislature recessed for the Easter holiday.

State education officials last week developed contingency plans for the aid cutoff and, as House prospects dimmed, legislative aides predicted the nation's second-largest state school system could finish the year even if state funding was halted.

If state aid is stopped, most dis4tricts will be left on their own to find a way to pay for the last month of school. The Texas Education Agency last week mailed districts their monthly state-aid payments for April and warned local officials that if Judge McCown enforces the supreme court's injunction of state funds, they will still be required to find a way to carry on.

"The injunction does not authorize any district to operate for fewer than the statutory number of days, nor does it waive any other program requirement," wrote Thomas E. Anderson Jr., the interim state chief.

Mr. Anderson did say that districts that find themselves strapped for cash to finish the year will be allowed to make shortcuts, but made clear that they will be able to do so only under "extreme circumstances."

The letter lists a contact person at the Texas Education Agency for school officials to notify "if, after considering every possible option, your district believes it will be impossible to continue to operate."

In a joint document sent to local school boards and superintendents last month, the Texas Association of School Administrators and the Texas Association of School Boards urged school officials to initiate8cash-flow projections and begin reviewing their local reserves.

At the Midway Independent School District near Waco, Superintendent Terry Harlow said school officials are concerned about what direction the court might take, but emphasized that administrators are determined to do whatever is necessary to finish the school year.

"We are taking the position that we're going to continue business as usual as long as we can," said Mr. Harlow, president of the tasa "We've got a strong commitment to kids who are fixing to graduate."

Beyond the immediate issue, he added, the deadlock has fueled educators' worries about the future of school improvements in the state.

Just as many districts were reporting anxiety over the impending court action, however, Representative Ernestine Glossbrenner, chairman of the House Public Education Committee, charged that other districts have helped create the situation with their own complaints about the effects of finance reforms.

"We had a lot of superintendents and boards around the state that think they are going to be able to continue as usual," she said. "But we don't have that option."

Ms. Glossbrenner said that while the compromise plan was an "ugly and awkward" bill, "it was one that took care of the situation and gave all districts time, whether they were winners or losers, to determine what they needed to do to react to the changes in funding."

The compromise bill would have increased the average Texas property-tax bill by 32 percent and, at the same time, required more than $6 billion in new funding from the state over a five-year span. The education department estimated the bill's total five-year cost at $13.9 billion.

The measure would have created 183 taxing districts, drawn largely along county lines. The state's 1,052 school districts would have been required to set local taxes at a minimum rate of $0.60 per $100 of assessed value in the plan's first year, with the option of an additional $0.45 levy. At the beginning $1.05 rate, the state would have guaranteed a district $2,877.50 per student.

By fiscal 1995, when the plan was to take full effect, local tax rates were to rise to a minimum of $0.90 per $100. With the optional $0.45 levy, the state promised $3,770 per pupil.

Beyond the equalized tax rate, the plan would have allowed local school districts to set their property levies as high as $1.50 per $100, with half of the local "enrichment" tax revenue staying in the school district, and the other half pooled for schools within the tax district.

In the end, concerns about the plan's cost and the strategy of taking local funds from wealthy districts led to the bill's demise, said Rafe Greenlee, press secretary for Lieut. Gov. Bob Bullock.

"A lot of districts, especially urban districts, would lose money or have to raise taxes to maintain the current spending," Mr. Greenlee said. "That leads people to say we're destroying the good schools without really helping the bad ones."

Added Representative Glossbrenner: "It's hard to beat back bad information that people would rather accept than the truth. Bad information--like saying that the courts won't close the schools. I guess we're about to find out."

Vol. 10, Issue 28

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