Education Funding

Texas Ends ’05 Session Without School Aid Rewrite

By David J. Hoff — June 07, 2005 3 min read

The fate of Texas’ school finances is in the hands of the state supreme court—again.

Time ran out last month on the legislature’s attempt to overhaul the way Texas pays for K-12 education, despite state leaders’ desire to solve the problem before the high court hears arguments scheduled for July 6 in the current challenge to the finance system.

Some lawmakers still hope they can broker a compromise and approve it in a special session before the court decides on the case, which could happen this year.

Texas House Speaker Tom Craddick, a Republican, rests between meetings on May 28, as a legislative stalemate on school finance ends hopes of a deal.

“The Senate feels very strongly that the legislature ought to be deciding on school finance, and not the courts,” Lt. Gov. David Dewhurst, the Republican who presides as the president of the chamber, said in a May 29 news conference available on the legislature’s Web site, shortly after legislative leaders cut off negotiations on the issue. “We’re not going to give up on trying to reach an agreement.”

House leaders said they, too, wanted to solve the finance dilemma in the Capitol. But they said the task is so complex that it’s been more than 50 years since the legislature has revised the way it distributes schools funds without a court mandate.

During negotiations near the end of the legislature’s biennial session, a House-Senate conference committee seemed to be close to striking a deal on how to allocate aid across districts, Speaker of the House Tom Craddick, a Republican, said in a separate May 29 news conference.

But lawmakers made little progress in deciding how to change the state tax code to finance the new program, he added in the news conference, also available on the legislature’s Web site.

Hot Summer

The failure to adopt a new school finance system leaves Texas with a method that both is politically unpopular and fails to meet the state’s constitutional obligations according to a state trial judge.

The current system—adopted in 1993 to comply with a state supreme court order—requires wealthy districts to give portions of their property taxes to poorer areas. In the 2005-06 school year, the state estimates, more than $1 billion will be distributed under that so-called Robin Hood provision.

Last fall, District Judge John Dietz ruled that the financing system is unconstitutional because it places a cap on property-tax rates and fails to produce enough funds to finance schools adequately. (“Texas Judge Rules Funds Not Enough,” September 22, 2004.)

In response, the House and the Senate approved bills to lower property-tax rates and end the Robin Hood practice that is the key to the current system. But they couldn’t agree on a package to increase taxes on sales, business, and other sources to compensate for the lost property-tax revenue.

“We were universes apart” on the tax bill, Speaker Craddick said.

Gov. Rick Perry, a Republican, expects that citizens will pressure lawmakers to return to Austin for a special session this summer to reach a deal, said Kathy Walt, a spokeswoman for Mr. Perry.

“Members are in for a long, uncomfortable summer,” Ms. Walt said, because they failed to pass property-tax relief and didn’t provide the large increase in K-12 funding—both of which voters expected.

Mr. Craddick, however, predicted that it would be difficult to reach a compromise because members are likely to wait to hear how the supreme court rules.

Appropriations Bill Passes

Despite its failure to redesign the way Texas finances schools, the legislature passed an appropriations bill that would provide an 8 percent increase in school funding over the next school year.

Under the bill, the state would appropriate a total of $23.2 billion to K-12 education in the 2005-06 and 2006-07 school years. School districts would receive an additional $10.4 billion in funds from other sources, including federal programs and property-tax revenue redistributed under the school finance system.

Gov. Perry is reviewing the budget and has not decided whether he would use veto power on it.

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