2017-04-27 / School

Panel Considers School Finance

The Senate Education Committee on Tuesday of last week heard bills related to school funding, considering sweeping changes to the formula that directs money to districts, as well as a program supporters say could lead to steep cuts in funding for hundreds of school districts if it dies.

The first issue comes after a ruling in the state’s favor from the Supreme Court of Texas last May. A challenge to the equity of the program was dismissed, but not without a strong admonition from the court to lawmakers. The opinion, authored by Justice Don Willett, said while technically constitutional, the Texas school finance system was in need of an overhaul.

For Senate Education Committee Chair and Friendswood Senator Larry Taylor, this gives the Legislature a chance to fix the problem. He laid out a bill designed to simplify and increase equity in the way Texas pays for public education. SB 2145 would completely revamp the formulas that determine how much each district gets. It would wipe out 49 sections and subchapters of complicated and arcane calculations and years of ad hoc fixes, replacing them with a simple, one-line formula. It adds the regular program allotment, based on a fixed rate set at the state level representing the cost to educate an average student for a year, adds four separate allotments based on at-risk, disability, and bi-lingual student populations and career and tech needs, and multiplies that by the local school property tax rate. Add a transportation allowance to that total and it becomes the yearly funding budget for each district.

Unlike the current system, which depends heavily on local property values, which could go up or down in a given year, the new system will depend on a district’s tax effort. Each penny of local school property tax would represent one percent of total funding; a district with a $1.05 rate would get five percent more than one with a $1 rate. For districts that can operate effectively on less, this could mean tax cuts. Tax increases would come with a commensurate increase in money for schools.

Also Tuesday, the committee heard a bill that would extend a decade old hold-harmless provision from the last major attempt at overhauling school finance. Additional State Aid for Tax Reduction, or ASATR, is a program that was intended to offset revenue losses from the 2006 tax compression that reduced property taxes in the state by a third. In 2011, the Legislature decided to put a sunset date on the program of September 2017, hoping that growth in property values would be enough to cover the ten-year old tax cuts.

For some districts, ASATR funds make up more than a third of their budget. Without that money, many districts will face severe staff and program cuts.

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