Texas lawmakers have adjourned a special session after approving a $1.9-billion increase in aid to schools that will fully fund the state’s latest finance-reform plan.
Also last month, a state judge upheld the new finance law against its first court challenge, brought by wealthy school districts that stand to lose millions of dollars under it.
Observers say the two developments augur a period of relatively peaceful respite after two years of tumultuous debate over school-finance and spending questions.
In addition to the two-year stated increase, the legislature approved new funding for several other school-improvement programs, including preschool for poor 3- and 4-year-olds, a technology initiative, and staff-development centers to help districts adopt site-based decisionmaking teams.
Also during the special legislative session, lawmakers approved a one time increase in teacher-retirement benefits, while reducing state contributions to the Teacher Retirement System.
Another bill will penalize districts with administrative costs more than 10 percent above the state average. The plan also includes provisions encouraging consolidation among the state’s 1,000-plus school districts.
Officials proclaimed the session a productive one for education.
“When you think of where we started off, we were in the hole with the [state] supreme court, in the hole $5 billion on the budget, and had the general sense that we were headed into passing an income tax,” said Soma Hernandez, education-policy director for Gov. Ann W. Richards. “We were able to bring resolution to all those areas, so I would say it was a darned successful legislative session.”
To eliminate a projected budget shortfall without resorting to an income tax or other tax increases, legislators adopted a host of streamlining measures and passed a constitutional amendment establishing a lottery. Proceeds from the lottery, which mast first be approved by the voters in November, will not be dedicated to any specific program.
Taxing Districts Upheld
The finance-reform measure survived its initial legal challenge when District Judge Scott McCown--who had twice sent lawmakers back to the drawing board to produce a more equitable funding system--ruled that the central strategy of the most recent plan was constitutional.
Several wealthy school districts argued that the law’s minimum property-tax rate and taxing districts established to collect and redistribute local funds amounted to a statewide property tax, which is prohibited by the state constitution.
But Judge McCown found that the legislature’s system proved a fair way to share wealth and fund schools equally. “As long as some districts have substantially more, the political process will not work,” he wrote. “Those with more will have no incentive to help those with less. Those with less will have insufficient political power to ensure adequacy. That has been the history of public education in this state.”
Earl Luna, a Dallas lawyer representing three school districts opposed to the law, called the judge’s ruling predictable. He said, though, that an appeal to the nine-member supreme court, expected this week, may produce a different outcome.
“We feel like it’s a close question,” Mr. Luna said. “probably the best we could do would be a 5-to-4 decision.”
No ‘Nirvana’
Meanwhile, advocates for the property-poor school districts that originally challenged the state’s school-funding system said that, while they were encouraged by the funding appropriated by lawmakers, they are continuing to study the law and mull potential challenges.
“We still haven’t determined if we think the whole thing actually meets constitutional standards,” said Al Kauffman, lead lawyer for the low-wealth districts. He said he will study local funding patterns and consider how districts raise their tax rates in response to the law before deciding whether to file a new lawsuit.
Admitting that “people pursuing equity see it as a real improvement” over the legislature’s earlier finance-reform effort, Mr. Kauffman said plaintiffs still would like to see school- construction and maintenance funding added to the equity plan.
Wealthy districts are reporting cuts in personnel and programs as their local property-tax funds are funneled to nearby poor districts. But although some poor districts will see significant funding hikes, Mr. Kauffman noted, most will realize only modest increases.
“It’s not like every poor district is saying this is nirvana,” he said.
But even with lingering questions, Ms. Hernandez said, the education debate in Texas is more serene than at any point in recent months.
“Even at the beginning of the summer, there was a wait-and-see attitude. Nobody was at all sure that the law would be fully funded, and they might all be back in limbo,” she said. “Having taken care of that, I think everybody is settling in now.”
