Federal

Texas Bills Would Scrap Finance System

By Michelle Galley — February 12, 2003 4 min read

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
Student Well-Being Webinar
Measuring & Supporting Student Well-Being: A Researcher and District Leader Roundtable
Students’ social-emotional well-being matters. The positive and negative emotions students feel are essential characteristics of their psychology, indicators of their well-being, and mediators of their success in school and life. Supportive relationships with peers, school
Content provided by Panorama Education
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
School & District Management Webinar
Making Digital Literacy a Priority: An Administrator’s Perspective
Join us as we delve into the efforts of our panelists and their initiatives to make digital skills a “must have” for their district. We’ll discuss with district leadership how they have kept digital literacy
Content provided by Learning.com
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
School & District Management Webinar
How Schools Can Implement Safe In-Person Learning
In order for in-person schooling to resume, it will be necessary to instill a sense of confidence that it is safe to return. BD is hosting a virtual panel discussing the benefits of asymptomatic screening
Content provided by BD

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 CDC: Nearly 80 Percent of K-12, Child-Care Workers Have Had at Least One COVID-19 Shot
About four out of five teachers, school staffers, and child-care workers had first COVID-19 vaccine doses by the end of March, CDC says.
2 min read
John Battle High School teacher Jennifer Daniel receives her COVID-19 vaccine on Jan. 11, 2021. Teachers received their first vaccine during an all-day event at the Virginia Highlands Higher Education Center in Abingdon, Va.
John Battle High School teacher Jennifer Daniel receives her COVID-19 vaccine on Jan. 11at the Virginia Highlands Higher Education Center in Abingdon, Va.
David Crigger/Bristol Herald Courier via AP
Federal Ed. Dept. to Review Title IX Rules on Sexual Assault, Gender Equity, LGBTQ Rights
The review could reopen a Trump-era debate on sexual assault in schools, and it could spark legal discord over transgender student rights.
4 min read
Symbols of gender.
iStock/Getty
Federal Q&A EdWeek Q&A: Miguel Cardona Talks Summer Learning, Mental Health, and State Tests
In an interview after a school reopening summit, the education secretary also addressed teachers' union concerns about CDC guidance.
10 min read
Education Secretary Miguel Cardona speaks during a press briefing at the White House on March 17, 2021.
U.S. Secretary of Education Miguel Cardona speaks during a press briefing at the White House on March 17.
Andrew Harnik/AP
Federal Senators Press Deputy Education Secretary Nominee on School Closures, Lost Learning Time
If confirmed, San Diego Unified Superintendent Cindy Marten would be the Education Department's number two as it urges in-person learning.
5 min read
San Diego Unified School District Superintendent Cindy Marten speaks at Lincoln High School in San Diego during the State of the District Address on Oct. 20, 2015.
San Diego Unified School District Superintendent Cindy Marten would be second in command at the U.S. Department of Education if confirmed as deputy secretary.
Misael Virgen/San Diego Union-Tribune