Federal

Texas Bills Would Scrap Finance System

By Michelle Galley — February 12, 2003 4 min read
  • Save to favorites
  • Print

Texas could scrap its controversial school finance system and replace it with a new version in two years, if lawmakers approve bills now in the state House and Senate.

Sen. Florence Shapiro and Rep. Kent Grusendorf, the Republican chairs of the Senate and House education committees, respectively, both introduced bills Jan. 30 seeking to “sunset” the current Texas school funding program in fall 2005. Mr. Grusendorf’s bill passed a House committee last week on a 6-2 vote and could end up on the House floor this week.

The current system, which relies heavily on property taxes, “is breaking the backs of the local property- tax payer,” Ms. Shapiro said. But, she added, with a looming $10 billion state budget deficit, she doesn’t expect the legislature to come up with a new plan during this year’s biennial session. Rather, lawmakers would draft a new proposal in their next session, which starts in January 2005.

The current court-ordered school finance system, which has been widely criticized since its inception in 1993, mandates that districts with high property values—and thus high revenues from property taxes—share their wealth with less fortunate school systems. A state court drew up the plan after ruling that there were vast inequities in per-pupil funding between property-wealthy and property- poor districts in the state.

But critics have long decried the so- called “Robin Hood” system. They say it forces wealthier communities to ante up large portions of their budgets, yet still fails to provide enough support to schools in areas with low property values.

“I believe everyone knows the system is broken,” said John Connolly, the executive director of the Texas School Coalition, a lobbying group that represents property-wealthy districts.

“Heretofore, everyone acknowledged the problems,” he said, though until now a serious effort to revise the system hasn’t been made, he added.

But even though Gov. Rick Perry, Lt. Gov. David Dewhurst, and Rep. Tom Craddick, the speaker of the House, all of whom are Republicans, have called for overhauling the system, not everyone in the Texas Statehouse agrees that its eventual repeal is a good idea.

“If it passes, it will freeze economic development in the state for two years,” said Rep. Scott Hochberg, a Democrat who sits on the House education committee. Mr. Hochberg was one of the two members of the panel—both Democrats—who voted against moving Mr. Grusendorf’s bill to the House floor last week.

Saying that the state will overhaul the school finance system in two years at least implies that the legislature will also consider revising the tax system, Mr. Hochberg added.

Currently, Texas does not have a state income tax or a state property tax, and both of those unpopular options have been suggested as remedies for the problems plaguing the school finance system.

If a tax overhaul is in the works, “that means that it is impossible for a company considering locating in Texas to know what their costs are going to be by the time they get their plant open,” Mr. Hochberg argued.

In addition, he said, plans for an overhaul could make it harder, if not impossible, for districts to pass bonds in the next two years, because districts will not know for sure how much money they will receive from the state in 2005.

Starting From Scratch

Still, the current system is so unpopular that advocates for both wealthy and low-income districts have said that revisions are necessary.

One of the problems is that large portions of the budgets in many property-wealthy districts go to “recapture,” said Mr. Connolly of the Texas School Coalition. “Recapture” is the term used for the tax provision mandating that such districts share some of their wealth. (“Texas, Despite Surprise Surplus, Foresees Tighter Times,” April 3, 2002.)

Roughly 10 percent of the 1,055 districts in the state are considered to be property-wealthy, and the current system has a significant impact on them. For instance, the upscale, 5,800- student Highland Park district outside Dallas sends about two-thirds of its property-tax income to the state, said Mr. Connolly, who formerly served as the superintendent in Highland Park.

But what’s more pressing, some say, is the provision in the tax code that limits the property-tax rate that districts can set to $1.50 per $100 of assessed value.

Currently, about 400 districts, most of which have low property values, are taxing at that maximum rate, Mr. Connolly said. “They have no additional way to raise revenue, so the only other option is program cuts,” he said.

And inequities still exist. Many of the richer districts are not taxing at the maximum rate, and still have more money per student than property-poor districts, said Wayne Pierce, the executive director of the Equity Center, an Austin-based group that has advocated funneling more money to poor districts.

“Repealing Robin Hood, an unpopular system, puts the legislature in the position of doing something else that might be equally unpopular,” such as instituting a statewide income tax, Mr. Pierce said.

But, he added, a repeal would present the opportunity for the state to start over. “This starts from scratch,” Mr. Pierce said. “So there is an opportunity to craft a system with equity in the truest sense.”

Events

This content is provided by our sponsor. It is not written by and does not necessarily reflect the views of Education Week's editorial staff.
Sponsor
Mathematics Webinar
Pave the Path to Excellence in Math
Empower your students' math journey with Sue O'Connell, author of “Math in Practice” and “Navigating Numeracy.”
Content provided by hand2mind
This content is provided by our sponsor. It is not written by and does not necessarily reflect the views of Education Week's editorial staff.
Sponsor
Recruitment & Retention Webinar
Combatting Teacher Shortages: Strategies for Classroom Balance and Learning Success
Learn from leaders in education as they share insights and strategies to support teachers and students.
Content provided by DreamBox Learning
Classroom Technology K-12 Essentials Forum Reading Instruction and AI: New Strategies for the Big Education Challenges of Our Time
Join the conversation as experts in the field explore these instructional pain points and offer game-changing guidance for K-12 leaders and educators.

EdWeek Top School Jobs

Teacher Jobs
Search over ten thousand teaching jobs nationwide — elementary, middle, high school and more.
View Jobs
Principal Jobs
Find hundreds of jobs for principals, assistant principals, and other school leadership roles.
View Jobs
Administrator Jobs
Over a thousand district-level jobs: superintendents, directors, more.
View Jobs
Support Staff Jobs
Search thousands of jobs, from paraprofessionals to counselors and more.
View Jobs

Read Next

Federal A Flood of Public Feedback Has Delayed a Title IX Change Covering Trans Athletes—Again
The Biden administration has not taken the final step to adopt long-awaited Title IX changes that would explicitly protect LGBTQ+ students.
5 min read
Isaya S. waves out the window of a Seattle Public Schools bus while participating in the annual Seattle Pride Parade on June 25, 2023, in Seattle.
Isaya S. waves out the window of a Seattle Public Schools bus while participating in the annual Seattle Pride Parade on June 25, 2023, in Seattle.
Lindsey Wasson/AP
Federal Is Funding for School Archery and Hunting Programs Really at Risk?
A U.S. Department of Education document led to confusion among school administrators about funding for archery and hunting programs.
4 min read
Students participate in a school archery program. A group of congressional lawmakers are working to amend federal law to ensure schools can purchase bow and arrows and other supplies for archery, sharp shooting, and hunting programs in schools.
Students participate in a school archery program. A group of congressional lawmakers are working to amend federal law to ensure schools can purchase bow and arrows and other supplies for school archery, sharp shooting, and hunting programs with federal education funds.
Courtesy of the National Archery in the Schools Program
Federal A Senate Committee Takes Up School Book Wars, Complete With Sharp Partisan Divisions
The Senate Judiciary Committee hearing on "book bans" included one Republican senator reading sexually explicit passages.
4 min read
Alexi Giannoulias, Illinois secretary of state, talks with Chairman Richard Durbin, D-Ill., right, and Sen. Chuck Grassley, R-Iowa, during the Senate Judiciary Committee hearing titled "Book Bans: Examining How Censorship Limits Liberty and Literature," in Hart Building on Tuesday, September 12, 2023.
Alexi Giannoulias, Illinois secretary of state, talks with Sen. Richard Durbin, D-Ill., right, and Sen. Chuck Grassley, R-Iowa, during the Senate Judiciary Committee hearing titled "Book Bans: Examining How Censorship Limits Liberty and Literature," on Sept. 12, 2023.
Tom Williams/AP
Federal WATCH: 5 Key Takeaways on Education From the 1st GOP Presidential Debate
Among the highlights: take on the teachers' unions, scrap the Education Department, and boost reading.
8 min read
Republican presidential candidates, from left, former Arkansas Gov. Asa Hutchinson, former New Jersey Gov. Chris Christie, former Vice President Mike Pence, Florida Gov. Ron DeSantis, businessman Vivek Ramaswamy, former U.N. Ambassador Nikki Haley, Sen. Tim Scott, R-S.C., and North Dakota Gov. Doug Burgum stand on stage before a Republican presidential primary debate hosted by FOX News Channel on Aug. 23, 2023, in Milwaukee.
Republican presidential candidates, from left, former Arkansas Gov. Asa Hutchinson, former New Jersey Gov. Chris Christie, former Vice President Mike Pence, Florida Gov. Ron DeSantis, businessman Vivek Ramaswamy, former U.N. Ambassador Nikki Haley, Sen. Tim Scott, R-S.C., and North Dakota Gov. Doug Burgum stand on stage before a Republican presidential primary debate hosted by FOX News Channel on Aug. 23, 2023, in Milwaukee.
Morry Gash/AP