Inside Intelligence: Public Education Funding Is...

Check out the full report: Inside Intelligence: Verbatims for Feb. 21

-Patricia

by Ross Ramsey | Texas Tribune
2/21/2011


Our insiders took on school finance this week, and they're not optimistic that there will be a happy ending.

Lawmakers have proposed spending $10.4 billion less than the Texas Education Agency says it needs to keep things running like they're running now. Is that current level of services sufficient for public education? Two-thirds of our panel said no, it's not.

Do they think the Legislature will close the gap? Yes and no. Twenty percent say the schools will end the session $10 billion short, while 70 percent say they'll end up less than $5 billion short. The remaining 10 percent split between full restoration, more money than requested and don't know.


Should lawmakers free local schools to raise their property taxes to make up for money lost to state cuts? Most of our insiders — 70 percent — said yes, while 27 percent said no.

Our open-ended question this week was "What areas of education spending should be on the cutting block?" The full set of answers is attached, but here's a sampling:

• "TEA. Regional Centers."

• "Administrative costs."

• "Administration"

• "School district administration is bloated, and everything else is starved."

• "Administration; non-core programs; discretionary spending on curriculum, test preparation, consultants, public relations, etc."

• "We should be investing in public education, not cutting it to the bone."

• "Athletics."

• "The pensions of school teachers. They should have 401k plans like the rest of us and have to pay for their own healthcare."

• "Building stadiums; consolidating school districts;"

• "General administration, ridiculously expensive and counterproductive pension policies and practices, labor practices that reward retaining ineffective teachers, inefficiencies due to too many districts, local and state programs with no record of success in boosting student achievement, sports excesses, and inefficiencies due to inadequate use of technology"

• "Start with non-classroom expenditures. Next: support and administrative staffing has increased 20 percent since 2004, while student population has risen 7 percent. Moving from the current 1:1 teaching/non-teacher ratio to a 3:2 ratio would produce $3.25 billion in savings. Force a reduction in administrator pay and bonus packages. Abolish the regional service centers."

• "The Target Revenue entitlement should be eliminated first (total elimination saves about $4.5 billion per biennium). Second, outside the system grants should be eliminated (saves about $2 billion). Delaying the July and August payments to districts moves another $3.7 billion into the 2011-2013 biennium."

• "Wrong question, Texas ranked in the bottom quarter of states in per capita student funding throughout the 20th century and into the 21st century. Given the demographic changes taking place Texas needs to step it up, not cut back."

• "Football."

• "Well now, that question reveals the conservative bias in the media! Do we just assume that we're getting overeducated in Texas, and it's time to trim it back a little? I know it's pointless to ask Who's taxes should be raised so that our kids are a little smarter when they get to tomorrow? But still! The arrogance of the assumption that, without question, some education should be cut back is just more than I can stomach."

• "Though a tough political choice, consolidation of the smaller districts is one way to bring huge efficiencies to a bloated mess. Incentives for consolidation - and disincentives for not consolidating - should be in play."

• "This is a no brainer. Consolidate school systems and drastically cut administrative expenses. If that doesn't do, fire teachers."

• "None. Our entire education system from pre-K to post-secondary has been on a starvation diet for far too long. After over a decade of Republican mismanagement, Texas is already seeing the fruits of a policy that is virtually guaranteeing the creation of an entire generation of poorly educated Texans who will be ill equipped to compete and contribute to our state's prosperity. This is the ultimate mortgaging of our future, and I fear we will discover too late that it was a subprime one."

Three House Freshmen on Cutting Public Education

Aid Cuts Have Texas Schools Scrambling

Yesterday's House Appropriations Hearing on Article III revealed Commissioner Scott's restoration requests (what we can expect him to expend political capital to fight for) though even he admits it's not enough.

Add to this scarce projections on how district and school budgets will be impacted with the transition to the STAAR system and the HB 3 mandates.

-Patricia

By JAMES C. McKINLEY
February 14, 2011

HUTTO, Tex. — The school superintendent in this rural town outside the state capital has taken steps to trademark the district’s oddly un-Texan school mascot — the Hutto Hippo — in a frantic effort to raise cash. He is also planning to put advertisements on school buses and to let retailers have space on the school Web site.
“I’m doing some weird stuff in the district because we are low on money,” said the superintendent, Douglas Killian, sitting in an office full of Hippo figurines.

He added, “We hope to make our hippo as recognizable as Mickey Mouse.” (The mascot was adopted shortly after a hippopotamus escaped from a circus train in 1915 and took up temporary residence in a local creek.)

But the money expected from the sale of “Hustling Hippos” merchandise would be peanuts compared with the hole expected to open up in the district’s budget, as the Legislature moves to slash about $4.8 billion in state aid to schools over two years to close a budget gap.

So Mr. Killian and the beleaguered school board have agreed to shut down a recently built grade school and to cut a 10th of the staff, among them a principal, 2 assistant principals, 4 librarians and 38 teachers. That round of staff cuts is a just first step, he says, and layoffs will follow if the budget bills proposed in the Legislature are enacted without changes.

All across Texas, school superintendents are bracing for the largest cuts to public education since World War II, and the state is not alone. Schools across the country are in trouble as billions in emergency stimulus grants from the federal government have run out, and state and federal lawmakers have interpreted the victory of fiscal hawks in November’s midterm elections to mean that tax increases are out of the question.

Nowhere has that political trend been more potent than in Texas, where Republicans who ran on a promise to never raise taxes not only retained every statewide office, but also added to their majorities in both houses of the Legislature.

Gov. Rick Perry, easily re-elected in November, made it clear in his annual speech to lawmakers last week that he regarded raising revenue for schools as out of the question, saying Texas families “sent a pretty clear message with their November votes.” He has also refused to consider using $9.4 billion in a reserve fund to bail out the schools.

“They want government to be even leaner and more efficient,” Mr. Perry said, “and they want us to balance the budget without raising taxes on families and employers.”

To balance the budget with cuts alone, the governor and Republican leaders in the Legislature have put forth bills that would reduce the state’s public school budget by at least 13 percent — nearly $3.5 billion a year — and would provide no new money to schools for about 85,000 new students that arrive in Texas every year. School administrators predict that as many as 100,000 school employees would have to be laid off to absorb the cuts.

Not only are the proposed cuts to school aid draconian, but in addition the Legislature in 2006 put strict limits on how much districts can raise local property taxes. That means local school boards find themselves trapped amid rising enrollment, double-digit drops in state aid and frozen local taxes.

Many school administrators attribute the current budget crisis to an overhaul of the school finance system five years ago, which Mr. Perry and Republican leaders pushed through in response to popular anger over high property taxes. The Legislature put a cap on property taxes for schools and promised to make up the difference with a new business tax. But that tax has never produced enough revenue to make the districts’ budgets whole.

The chronic shortfall in money for schools was papered over in the last two-year budget passed in 2009. Mr. Perry and Republican leaders in the Legislature used about $3.3 billion in federal aid under the American Recovery and Reinvestment Act to plug the hole. That aid has disappeared this year.

“We had a problem before the shortfall ever occurred,” said John M. Folks, the superintendent of Northside Independent School District in San Antonio. “Now we have put this shortfall on top of an already horrible funding situation.”

Mr. Folks said the proposed budget bills would require him to cut about a sixth of his budget, and he sees see no way to avoid laying off teachers and letting classes become larger.

That view was echoed by administrators in districts large and small, from tiny rural districts with one high school and a six-man football team to the giant urban districts in Houston and Dallas.

In Austin, school administrators on Friday recommended in a letter to the school board that 1,000 jobs — roughly 8 percent of the work force — be cut to balance the budget, while in Dallas officials on Thursday proposed cutting about 4,000 positions.

Terry Grier, the superintendent in Houston, said the city stood to lose 15 percent to 20 percent of its total budget. The district could still raise the local property tax rate a few cents and stay under the state-imposed cap, but it would produce nowhere near enough to cover the loss of state money, Mr. Grier said. One way to cushion the blow, he said, would be to lift state rules on class size and to let administrators single out unproductive teachers for layoffs, regardless of their seniority. “Let us get out from under some of these state mandates,” he said.

Even relatively wealthy suburban districts are in trouble. Officials in the Clear Creek Independent School District south of Houston, which serves the communities around NASA, estimate they would have to cut about 975 jobs — about a fifth of the work force. Like most other administrators, Superintendent Greg Smith is urging the Legislature to tap into the Rainy Day Fund instead of making the cuts. “It’s not raining,” he said. “It’s pouring.”

On Thursday night in Hutto, two school board members wept as they read the motion to close Veterans’ Hill Elementary School, a sleek building that opened in 2008 amid wheat fields and horse paddocks.

“In the 10 years I’ve been on this board, this is the hardest decision I’ve ever had to make,” said Sheila Knapp, the board’s vice president. “I’m very angry with the Legislature for putting us in this position and affecting our kids this way.”

Michele Bischoffberger, the principal at Veterans’ Hill, said the school was built just before the economic downturn, when Hutto was growing rapidly as developers built suburbs for workers at high-tech companies around Austin.

“All this land out here was supposed to be houses, but when the crash came, that didn’t happen,” Ms. Bischoffberger said, gesturing at nearby fields.

She recounted wistfully how she helped design the school, insisting on elements like a large gymnasium and a computer lab. “It’s your baby,” she said. “Being a new principal, this is where you get to make your dreams come true. It’s going to be hard to walk away.”

The 475 children at the school will be divided among the district’s other four elementary schools, and the entire fifth grade will be moved to the two middle schools to make room. The shuttered school — with its library, computer lab and state-of-the-art classrooms — will be mothballed or rented out to a community college, Ms. Bischoffberger said.

Plans to start a garden to be used as an outdoor classroom this spring have been scotched, killing a long-held dream for Vanessa Henson, a kindergarten teacher who had raised money from local businesses for the project.

“I don’t know about the politics,” Ms. Henson said, breaking into tears. “I just know something went awry.”

Some young teachers and support staff members said they were uneasy, since it was unclear if they would have jobs in September. Sharon Case, the school librarian, is among those whose job is on the line. She has two children in college and works nights as a cashier at Wal-Mart.

“I’m just doing a lot of praying and depending on God to know where I’m supposed to be,” Ms. Case said.

How Texas Betrayed Its Schools

John T. Harvey | Forbes, Pragmatic Economics
July 20, 2011

(I’ll return to national macroeconomic issues in my next post–and there is certainly still a lot to say there!)

As promised, this is my follow-up post based on our trip to the Save Texas Schools conference in Austin this past weekend. It was a sobering experience. The long and the short of it is this: Texas has abandoned its children. The Governor and the Legislators in Austin have set the stage for a protracted crisis not only in education but in the State economy. With respect to the former, we can look forward to larger class sizes, the elimination of many important programs, and the placing of even more responsibility of the backs of overworked (and fewer) teachers. Texas already ranked an embarrassing 44th in education and these developments do not bode well for future of the Lone Star State. As far as the economy is concerned, every public education layoff means less income not only for those individuals, but for local businesses where they would have shopped. Indeed, the Legislative Budget Board forecast that almost 45% of job losses would actually be in the private sector (Center for Public Policy Priorities: CPPP Urges Rejection of HB1). Furthermore, the lack of a decent education will greatly reduce the future earning power of Texans. The only firms willing to relocate here will be those hoping to find a source of cheap, low-skilled laborers. Texas will become the alternative to outsourcing to an impoverished, third-world country. The stars at night no longer look so big and bright.

Was this fiscal crisis the inevitable outcome of the Great Recession? The answer is absolutely, unequivocally, no. In fact, it is hard to avoid the unsettling conclusion that it was deliberate, that certain State Legislators and the Governor did this on purpose. To put this into context, consider this passage from the Texas Constitution:

A general diffusion of knowledge being essential to the preservation of the liberties and rights of the people, it shall be the duty of the Legislature of the State to establish and make suitable provision for the support and maintenance of an efficient system of public free schools (Article VII).

The State is thus constitutionally required to support of a public school system. In terms of the specific meaning of “efficient,” the courts have offered some guidelines:

It must be recognized that the Constitution requires an ‘efficient,’ not an ‘economical,’ ‘inexpensive,’ or ‘cheap’ system (Texas Supreme Court, Edgewood ISD vs. Kirby, 1989).

This is obviously still open to interpretation, but it seems reasonable to imagine that it would at least represent the same level of service as last year. Surely the State whose economy would make it the 15th-largest country in the world could accomplish such a goal? And, indeed, it has done so every year–until this one. Today, however, it seems that Texas can no longer afford to offer the 44th-best education in the nation (soon to be 50th, incidentally). We are faced with an $18 billion revenue shortfall, of which roughly $5 billion would have gone to education (Center for Public Policy Priorities: Statement on the State Budget for 2012-13). But, to reiterate, this was not an accident. Conscious choices were made and clear warnings were ignored.

It started in 2006, when new tax laws were enacted that supporters (including Republican Governor Rick Perry) claimed would generate sufficient revenue to continue to fund education and other programs at required levels. Almost immediately, however, State Comptroller Carole Keeton Strayhorn (also a Republican) wrote to Governor Perry to explain that this was simply not true (Strayhorn Letter). Projections by her office showed that the State would find itself roughly $23 billion short within five years. She was remarkably accurate (in fact, she underestimated). There was, indeed, no way the planned tax reductions could possibly be offset by the legislated increases. But her warnings were completely ignored.

And so, when Legislators convened for the most recent session, it came as absolutely no surprise to anyone that revenues were well short of what was needed. In fact, they had been short in previous years, too, but earlier surpluses and federal stimulus funds had provided temporary relief. No more. This time, it would hurt. Or would it?

There was actually another option. The State had the foresight in 1988 to create a pool of money for such emergencies: the Economic Stabilization Fund (aka, the Rainy Day Fund). Following on the heels of the 1980s oil-price collapse that devastated the Texas economy, the goal was to systematically accumulate savings during good times which could then be spent in bad. This had, indeed, provided relief in the past, with the Legislature sometimes willing to spend the entire balance (Center for Public Policy Priorities: Using the Rainy Day Fund). And the best news in terms of addressing our current crisis is that the fund has never been larger than it is right now. It is difficult to imagine a more appropriate time to tap into it. Yet, despite vigorous debate (largely along party lines) and a march on the Capitol by those hoping to save Texas schools, the State refused to use more than an insignificant fraction. Apparently, it is not raining–but, boy, it soon will be. In fact, if we make no attempt to address the structural deficit, the revenue shortfall “will more than double again in two years regardless of how the economy performs” (Take Back Texas Alliance: Texas Budget Crisis). Our problem isn’t going to go away on its own.

And so, here we stand today. The government of the Great State of Texas has willfully elected to disregard its constitutional duty to fund education at even the modest levels represented by previous years. They ignored clear and prescient warnings regarding future revenue streams and chose not to tap into monies set aside for precisely such purposes. It will almost certainly get worse, and they know it. They are failing our schools, our children, and our State.

I hesitate to speculate on why those in control of the State government would so blatantly ignore the warning signs and lead us into this education disaster. Others don’t, however. They believe that it is because the Governor and key Legislators are purposely setting out to destroy public education, hoping to replace our constitutionally-mandated system with one based on private schools. If that is true, it raises at least two concerns:

1) If that is your goal, then have the integrity to say it out loud. Don’t hide behind claims of fiscal crises and incompetent educators. The former is a smoke screen, one that may have been purposely manufactured for just this purpose. The revenue issues could most certainly be addressed if Legislators were willing to discuss tax reform (Take Back Texas Alliance: Texas Budget Crisis; Center for Public Policy Priorities: List of $30 Billion in Revenue Options). The latter, meanwhile, simply isn’t true. The scholarly research on the American public education system argues that it measures up very well against those of other countries. Those saying otherwise are either cherry picking statistics or simply do not understand how to interpret them (for more on this, see my previous post: Why US Education Deserves Our Praise).

2) Let’s not kid ourselves about what privatization of education would really represent. It would mean abandoning the poor, disenfranchised, and otherwise challenged children of our State. That’s not just mean-spirited, it is un-American and undemocratic. Our system of government requires an educated citizen more than any other. I’m sure I don’t need to argue this, so I’ll simply close with some relevant quotes. Hopefully, Governor (and Presidential Candidate?) Perry and certain Texas Legislators will give these a read. I hope so, as it seems they are the ones most in need of an education.

Education is a human right with immense power to transform. On its foundation rest the cornerstones of freedom, democracy and sustainable human development.
–Kofi Annan

I know no safe depository of the ultimate powers of the society but the people themselves; and if we think them not enlightened enough to exercise their control with a wholesome discretion, the remedy is not to take it from them, but to inform their discretion by education. This is the true corrective of abuses of constitutional power.
–Thomas Jefferson

In a global economy where the most valuable skill you can sell is your knowledge, a good education is no longer just a pathway to opportunity–it is a pre-requisite.
–Barack Obama

Democracy cannot succeed unless those who express their choice are prepared to choose wisely. The real safeguard of democracy, therefore, is education.
–Franklin D. Roosevelt

Resources for Further Reading
Center for Public Policy Priorities
The Take Back Texas Alliance

Acknowledgments
Many thanks to Scott McCown of the Center for Public Policy Priorities for reviewing an earlier version of this post. Thanks, too, to my wife, Melanie, for her insights and editorial advice. All remaining errors are, of course, my own.

Race is on to fund schools

Peggy Fikac | My San Antonio.com
Wednesday, May 25, 2011

AUSTIN — Legislative leaders continued to look for a compromise school funding plan Tuesday to allocate $4 billion worth of public school cuts they say is necessary to avoid a special session this summer.

A bill to make those cuts collapsed late Monday because of a procedural flaw that now has lawmakers scrambling back and forth between House and Senate chambers — with a stop Tuesday afternoon to meet with Gov. Rick Perry's staff — in search of a solution to buy them time until the 2013 session.

House leaders prefer a proration, an across-the-board cut for the state's 1,040 school districts amounting to nearly 6 percent for the 2012-13 school year. Senate leaders want school districts that have benefited from the controversial “target revenue system” to take larger cuts. Their plan could cut some districts 9 percent.

Lawmakers created the target revenue system five years ago that largely froze school funding at levels districts were getting in 2006 — except for enrollment growth. The temporary plan has continued and expanded to the point where most school districts no longer are funded under traditional formulas.

The current legislative session ends Monday. But legislative deadlines obligate lawmakers to settle on a school funding plan before Friday, said House Education Chairman Rob Eissler, R-The Woodlands.

“In any plan where you have the same amount of money, it's how you rearrange the furniture,” Eissler said.

School funding cuts are necessary because of the state's massive revenue shortfall, and state leaders have limited the amount of money that can be used from the rainy day fund to plug budget holes. This stands to become the first time in modern history that Texas will not pay for school enrollment growth — about 170,000 additional students over the next two years.

Also pending are efforts to give school districts flexibility to absorb budget cuts by allowing larger class sizes, cutting teacher pay and giving teachers and other school employees unpaid leave.

Lawmakers have been hammering out a compromise budget for the next two years that would carve billions of dollars from current state and federal spending.

Along with the spending plan, they've still got to pass a revenue measure to help balance it, and it appeared any compromise on the school finance plan would have to be grafted onto that must-pass legislation.

Budget negotiators already have decided not to pay for $4.8 billion in anticipated Medicaid expenses in their two-year budget plan, meaning lawmakers in 2013 will have to cover that cost.

If lawmakers don't change the current school funding formulas, the state still will owe school districts an additional $4 billion — the amount that the proposed budget falls short of funding those existing formulas — said Senate Finance Committee Chairman Steve Ogden, R-Bryan.

“If we don't change the state law and basically scale back on that entitlement, then you'll have that hole that we have to fill in addition to the probable Medicaid hole, and we will really be in serious trouble in this state,” he said. “We can't kick the can down the road on both Medicaid and school finance at the same time.”Senate Education Committee Chairwoman Florence Shapiro, R-Plano, said she believes a special session is a certainty if lawmakers don't approve a new school finance plan to distribute a reduced amount of state aid.

“That was part of our budget deal,” Shapiro said.

Lawmakers said they would try to add the essential part of the school finance plan to the must-pass revenue legislation, Senate Bill 1811. Shapiro called it “the last train in town.”

Eissler speculated that lawmakers would try to develop a hybrid plan, using concepts from both House and Senate versions.

Texas legislators reach breakthrough on school funding

By Dave Montgomery | Star-Telegram
May 19, 2011

AUSTIN -- House leaders late Thursday announced a major breakthrough on education funding, saying they have agreed to accept Senate budget recommendations to reduce state public school funding by $4 billion over the next two years.

That's almost half the amount that House members had voted to cut in the budget they adopted in April. Many education groups, while fighting to avoid funding cuts, have touted the Senate proposal as the preferred scenario.

"Given the available options, that is the best outcome," said Lonnie Hollingsworth, director of governmental relations for the Texas Classroom Teachers Association. "Given what was on the table, this is good news."

Lawmakers outlined the agreement as House and Senate leaders continued tedious negotiations to reach a final budget agreement before their May 30 adjournment.

Several thorny issues were still on the table -- including the size of a proposed drawdown from the state's rainy-day fund -- but leaders of both chambers said they were still hopeful that they could strike a deal and avoid a midsummer special session.

Negotiations also continue over higher-education funding, but House leaders said that they were within $300 million of closing a $1 billion gap.

"We're pretty darned close," said House Speaker Joe Straus. Earlier in the day, Lt. Gov. David Dewhurst, the Senate's presiding officer, told reporters that "it's moving in the right direction."

House and Senate negotiators have signed off on most elements of a compromise budget, but steep differences in education funding had emerged as major sticking points. Despite progress in that area, negotiators were at odds over on how much to draw from the state's $9.7 billion rainy-day fund to help close a deficit for the current biennium. House officials indicated that they won't go beyond the $3.1 billion withdrawal approved by House members. The Senate this week called for a withdrawal of nearly $4 billion.

Negotiators are trying to hammer out a final budget that will have to be approved by both chambers without amendments. The House budget called for $164.5 billion for 2012-13, -- a $23 billion reduction (12.3 percent) from current spending. The Senate budget of $176.5 billion proposed an $11 billion reduction (5.9 percent).

Lawmakers opened their session in January facing a budget shortfall of up $27 billion, largely due to a recession-caused downturn in state revenue. Original spending proposals that started the budget deliberations called for up to nearly $10 billion in cuts to public school assistance, prompting widespread fears of teacher layoffs and school closures.

Under the House-passed budget, state funding for school districts would have been reduced by $7.8 billion. The Senate's proposed reduction was $4 billion.

House officials said they would be able to match the level in the Senate bill through $1.2 billion that Comptroller Susan Combs said would be available in additional revenue and $2.9 billion from various revenue measures moving through the House.

Combs issued the revised revenue estimate this week, based on the state's improving economy. Straus said that House conferees "promptly agreed to put those dollars toward our first priority, our public schools.

"The House has gone more than halfway to meet the Senate," Straus said in a statement, "and it is now time for the Senate to do its part by making additional cuts."

Dewhurst and a delegation of senators presented Straus and other House leaders with a proposal that had the support of 21 of the Senate's 31 members -- all 19 Republicans and Sens. Royce West, D-Dallas, and Juan "Chuy" Hinojosa, D-McAllen. Participants declined to detail specifics.

Time running out

Emissaries from Gov. Rick Perry's office also participated in the discussions. Perry has insisted that lawmakers balance the budget by shrinking the size of government, avoiding new or increased taxes and not withdrawing from the rainy-day fund beyond the $3.1 billion for the current biennium.

The hang-up over the budget has forced House leaders to repeatedly postpone debate on a package of savings designed to avoid further cuts. The measure would generate more than $2 billion through accounting changes and streamlining government services. The biggest portion is designed to save $1.8 billion through a brief deferral in state aid to public school districts.

Also Thursday, the Senate Finance Committee charted another potential source of revenue by approving a proposed constitutional amendment that would allow the State Land Office to make millions of dollars in direct payments to public school funding. The amendment, sponsored by Rep. Rob Orr, R-Burleson, would be presented to voters in November.

Lawmakers have expressed growing concern that the late tie-up over the budget could force Perry to call lawmakers back for a 30-day special session, likely in July. Many acknowledged that they have only a few days at best to resolve their differences or face a steamy summer in Austin.

Questioned about that possibility, Rep. Vicki Truitt, R-Keller, said, "Ask me in 24 hours."

Read more: http://www.star-telegram.com/2011/05/19/3089467/texas-legislators-reach-breakthrough.html#ixzz1NL9SQ8Fa

The State of Things in Budget Limbo

Budget compromises seem to be chugging along—assuming they can pass some mighty controversial fiscal matters measures.

by Abby Rapoport | Texas Observer
Friday, May 20, 2011

It's looking more and more likely that the Legislature may yet reach an agreement on the budget—in the regular session. Most of this week, House and Senate lawmakers have struggled to see if they could come to a compromise on education funding, the most contentious fiscal battleground. By Thursday night, R.G. Ratcliffe and others reported the biggest sticking point is now almost a million dollars in funding for higher education. The Senate appears to have prevailed on public education, where there will likely be a $4 billion cut to funding, rather than the House's proposal of a $7.8 billion cut.

Meanwhile, credit-taking is already beginning. Speaker of the House Joe Straus sent out a press release last night arguing that the House had done its share of negotiating already by allowing the use of an extra of $3 billion in the budget, thanks to "additional revenue from the Comptroller and the improving economy." He was referring to the extra $500 million that the Comptroller added to her tax revenue projections and the $2.5 billion coming from savings and accounting tricks in the "fiscal matters" bills. The new money "allowed House budget negotiators to find an additional $2 billion to fund public schools," he said. It's quite a statement, given that the lionshare of the "fiscal matters" bills come from deferring $2 billion in payments to public schools.

And there's no guarantee that the key "fiscal matters" bill is going to pass—without which all of the compromising is for naught. The fiscal matters bills implement accounting tricks, like deferred payments, to provide extra money for budget writers to use. And there's no guarantee that the key measure, Senate Bill 1811, is going to get through easily.

Last night, after the House passed one of fiscal matters bills dealing with Medicaid savings, members braced themselves for a long debate on Senate Bill 1581, another necessary fiscal matters bill primarily about education funding. But Rep. Mike Villarreal, D-San Antonio, wasted no time marching up to the podium and calling a point of order on the bill.

His issue, he said, was with a last minute Senate amendment from Sen. Jeff Wentworth that would have allowed concealed handguns on college campuses. "The vast majority of students and their parents oppose guns on campus," he said. "So do our chancellors and presidents of universities." Plus, he said, it wasn't germane to a bill about money and funding. The speaker sustained the point of order, and sent the bill back to the Senate to strip out the measure.

But while tweets soon broke out accusing Villarreal of effectively killing the budget and prompting a special session this summer, Villarreal says there's no reason to panic. If the Senate cannot turn the bill around fast enough for the House to pass it by Tuesday's deadline, the key components of the bill he killed can simply be added onto the other fiscal matters bill, SB 1811.

That leaves a whole lot riding on one measure. The House is scheduled to debate the SB 1811 Friday at 2 p.m. If they can't pass it, it's hard to see how they'll pass the budget.

For his part, Villarreal is hoping for a special session, although he maintains the Democrats have no impact on the matter. "I don't think it can get any worse if we go into special session," he says. "The Senate budget is harmful to the quality of our kids' education. The House budget is a disaster."

The Other Big Fight: School Finance Tug-of-War

by Abby Rapoport | Texas Observer
Saturday, May 21, 2011

When word came out Friday afternoon that House and Senate budget negotiators had reached a compromise, you might have thought the Capitol could relax. After all, for weeks, insiders have speculated that finding middle ground on a budget with a $23 billion shortfall would be tough—especially when the Senate only wanted to make drastic cuts to health care and education while the House seemed intent on making the cuts draconian. So when the House and Senate worked out a deal on the budget, with $4 billion slashed from school funding, it might have seemed like a time for the non-teacher, non-parent and non-student crowds to celebrate.

Instead it prompted a realization: the state is actually going to have to pass a new school finance plan—one that distributes the budget cuts to school districts. Without a school finance plan, the lawmakers will likely have to come back for a special session. But coming up with some agreement on just what that plan should look like is hardly easy. Lawmakers face two distinct problems. First they must introduce unprecedented cuts into a system that's built to be automatically financed. Secondly, they must decide whether to tackle the structural problems with the current system, created in 2006. Right now, most school districts get funded based on a "target revenue system" that's based on, among other things, on past property tax collections. The poorest districts subsist on formulas that are woefully underfunded. Vast inequalities between districts leave the system in desperate need of reform.

Then of course, there's the fact that the school finance bill will ultimately encapsulate the losses facing each district. Despite the widespread Republican support for budgets that slash public education, no one actually wants to see their school districts go without. So Friday afternoon, the entire Capitol swung into school finance mode. The Senate approved one plan—which House Republicans have already vowed won't make it to the floor. Meanwhile, some Democratic representatives were certain that a plan by House Public Education Committee Chair Rob Eissler, R-The Woodlands, was the plan budget negotiators had agreed to. But that plan—which never had a hearing and was unfamiliar to most—remains at odds with another plan by Democratic Rep. Scott Hochberg, the House's school finance guru. A budget deal may be in the clear, but nothing's certain when it comes to school finance.

The senators returned to the floor around 4 p.m. to reconsider Senate Bill 1581, a fiscal matters bill essential to the budget. The bill provides $2 billion to spend by deferring state payments to school districts by one month in 2013. The Senate had the bill because the previous night, while it was getting debated on the House floor, Rep. Mike Villarreal called a point of order. The Senate had to strip out an amendment that allowed concealed handguns on college campuses. But while they were at it, the senators decided it would be a good time to tack on a school finance plan.

The plan is hardly new. Senate Education Committee Chair Florence Shapiro, R-Plano, presented it to the Senate Finance Committee a month ago, where it was favorably voted out. As I reported then: "Every district in the state gets cut somewhat in the plan, but those with more money get cut more. Of the $4 billion in cuts, the first $1 billion comes from about a 1.5 percent cut to all school districts. The other $3 billion comes from districts on target revenue." Critics of the plan argue that by cutting from all districts, including the poorest of the poor, Shapiro isn't doing enough to increase funding equity. Furthermore, while the plan sets 2017 as the date to end the target revenue system, many want to see more actions to actually transition to new longterm funding mechanisms.

On the floor, her Republican colleague Sen. Bob Deuell did not mince words. He criticized the body for the $4 billion cut to education—a cut another senator had called a "heroic effort." Deuell told the senators they should be using more of the state's $9.4 billion Rainy Day fund instead of cutting schools at all. Then he started lambasting the enormous funding differences between districts, which he said Shapiro's plan fails to adequately address.

"We knew there were inequities and we were supposed to fix them," he said. "But we haven't." He read a list of highest and lowest funded school districts that each senator represented, highlighting how some districts get almost triple the amount per student that others receive. "Members," he said, "that's why we need to get rid of target revenue." But while he had an amendment to take more school districts off of target revenue, he pulled it down as requested by Senate leadership.

Shapiro said her bill "set in motion a pathway to a better school finance system with a decrease in target revenue." But it was hard to think that was her primary goal—earlier she'd told a Democrat that "this was never a budget for public education that was based on equity." Ultimately, the plan was successfully tacked on to the fiscal matters bill, before the Senate voted the bill back to the House.

But all that effort may well have been for naught. Later, at a midnight meeting of the House Public Education Committee, members were all dismissive of Shapiro's plan.

"I'm not for the Senate's school finance bill," pronounced Democratic Rep. Scott Hochberg, whose word on school finance often carries weight despite his party affiliation.

"I'm not either," Eissler, the committee's chairman, agreed. "Wanna take it out?" he asked Hochberg, "or wanna just do it on the floor?"

Rep. Jimmie Don Aycock, R-Killeen, who will carry the Senate bill when it reaches the House floor, told members his "intention is to heavily change" the bill. In other words, don't expect the Shapiro plan to have much support in the House.

But what will take its place?

There are two primary alternatives in the House—one from Eissler and one from Hochberg. Hochberg's plan deals directly with the systemic problems of school finance and target revenue. It puts almost all districts onto the same formula for funding, drastically decreasing inequality. But that equity relies on cutting the richest districts down, and while there's a 10 percent cap on the amount a district can lose in funding, the plan isn't exactly popular with wealthy districts like Austin.

But Hochberg was disheartened throughout Friday's session. At the Public Education Committee meeting, he openly said that the budget deal was based on Eissler's school finance plan.

"I was told the Senate was agreed to Mr. Eissler's plan," he said. "We were told the deal was pro-ration."

By Saturday, however, Eissler was hardly sure of that, saying he had no idea whether his plan was "the" plan. Of course, most of his colleagues had only just learned about his school finance measure.

Eissler's plan is perhaps the most straightforward of all—simply cut around six percent of funding for every district in the state. But on Friday, he was still reworking language and adjusting the projections of just what impact the measure would have on districts. The first set of projections he sent out to members wasn't accurate; instead of cutting districts by the same percentage, it cut each district by around $300 per student. As members finally got accurate projections, they began to flood his desk with questions, even as he was still trying to make sure the language in the measure was correct.

Eissler initially planned to debate the across the board cut Friday night, as an amendment to a different fiscal matters bill. But the devil's in the details, and he couldn't finess the language in time. It wasn't until late in the evening that he gave up on passing school finance Friday night.

Senate Bill 1581 remains the bill to watch for school finance. It's expected to hit the House floor Monday, where Eissler and Hochberg may well wind up going toe-to-toe. The Eissler plan is popular with wealthy school districts because it cuts them the least. But it does nothing to deal with the long term problems of school finance; inequalities remain largely the same as each district takes the same percent cut. Hochberg's plan brings equity to the system, but it cuts wealthy districts by large percentages while leaving the poorest districts to keep more of what they have.

With the clock ticking down, this will be a key battle for members hoping to avoid a special session. Few members actually understand the school finance system, and most will vote based simply on which plan cuts the least from the school districts they represent.

As members spent much of Saturday trying to understand the differences between the plans, a diverse group of protestors, white, black and Latino, young and old, stood outside the chamber. "Teachers Don't Forget," read one sign. "Cuts Hurt Kids," proclaimed another. Many of the attendees had gathered two months earlier for the giant "Save Texas Schools" rally. The protestors kept up one loud chant: "Use the Rainy Day Fund!"

"We're making a difference," organizer Allen Weeks told the crowd.

But at this point, a $4 billion cut to public schools looks like a foregone conclusion. The only thing left to decide is which districts will be hurt the most.

School finance inaction may impede budget compromise

By Kate Alexander | AMERICAN-STATESMAN STAFF
Tuesday, May 10, 2011

The clock is a-tickin' for Texas lawmakers to cobble together a budget compromise that enacts deep cuts to public education.

But with less than three weeks left in the legislative session, neither chamber has debated, much less passed, a school finance bill that would reduce the state aid owed to school districts by as much as $6.5 billion.

Both the House and Senate budgets are precariously balanced on the assumption that such legislation would be approved. Failure to do so would probably force lawmakers into a special session this summer.

"It's essential that we pass some type of school finance reform in order to successfully end the session. So it's the No. 1 priority right now," said Senate Finance Committee Chairman Steve Ogden, R-Bryan.

On the House side, Calendars Committee Chairman Todd Hunter, R-Corpus Christi, said the school finance legislation would not be among the bills to make it to the floor before a key deadline at the end of the week.

"There are a lot of interconnected parts that aren't fitting together yet," said Public Education Chairman Rob Eissler, R-The Woodlands.

The House plan could still hitch a ride on another piece of legislation, but at least one local lawmaker, Rep. Paul Workman, R-Austin, said he wouldn't be able to support it.

Although Workman backed the House budget bill that reduced the school funding, he said Tuesday that the House school finance bill hurts his school districts too much to get his vote.

Under the House bill, for instance, the Austin school district would lose $81 million — 12 percent of its state aid — in the first year of the 2012-13 budget. The next year, the impact would be $111 million.

The Senate bill eases the pain a bit, in part because it reduces funding by only $4 billion over the two-year budget. That scenario would have Austin getting 7.5 percent less in the first year and 8.5 percent less the next.

Even so, Senate leaders have been struggling to muster the 21 votes needed to bring Senate Bill 22 up for debate. The arcane procedural workaround used last week to free up the budget bill is not available this time.

Ogden huddled with Lt. Gov. David Dewhurst and several senators for more than an hour Tuesday in pursuit of a deal that would allow the bill to come up for debate.

At least two Democrats would have to jump on board for the bill to move, but they have been reluctant to help the Republicans reduce education spending.

Ogden said Tuesday that senators are working on a deal that would include a promise to restore the school districts to full funding when the economy improves.

But the state has made — and broken — school funding promises before.

In 2006, the state was forced to rejigger its school finance system after the Texas Supreme Court ruled that the Legislature had effectively enacted an unconstitutional statewide property tax.

Lawmakers responded by reducing local school property tax rates by one-third and dedicating more state money to the schools to replace the local money.

The state promised school districts that their overall funding would not suffer as a result. But the state is now reneging on the deal, said Lynn Moak, a school finance consultant.

"This session has demonstrated that that commitment is a hollow commitment," Moak said.

Amendments Piled Onto Texas Education Finance Bill

by Becca Aaronson | Texas Tribune
May 9, 2011

Senators had an amendment feeding frenzy on an education finance reform bill offered up today by Sen. Steve Ogden, the Bryan Republican who chairs the Senate Finance Committee.

The bill’s original intent: Increase revenue for public schools and higher education institutions by $30 million for the next biennium. The bill will still do that, but it will also allow college students to carry concealed handguns on campus, increase the cost of cigarettes and allow drastic changes to university administration.

Those are only the amendments senators adopted. Other amendments came from Sen. Brian Birdwell, R-Granbury, who attempted to require undocumented Texas residents to pay out-of-state tuition rates; Sen. Wendy Davis, D-Fort Worth, who tried to discount electricity rates for school districts; and Sen. Rodney Ellis, D-Houston, who attempted to repeal the deregulation of college tuition. Those, plus others, were tabled.

An amendment battle between Sen. Judith Zaffirini, D-Laredo, and Sen. Jeff Wentworth, R-San Antonio, also played out — and both won. Earlier in the session, Zaffirini killed her own bill, SB 5, after Wentworth amended it to include his "campus carry" provision. Zaffirini successfully added the provisions from SB 5, which would eliminate certain university reporting requirements and reduce administrative costs. And after much debate, Wentworth added the campus carry provision.

Senators also adopted two amendments that affect the Permanent Health Fund — $420 million tobacco companies have paid Texas to cover the expense of tobacco-related illnesses. The first, by Sen. Kevin Eltife, R-Tyler, would take $100 million from the fund to restore funding for health science centers at higher education institutions. Looking at a total reduction of $320 million reduction, each of the 10 health science centers would receive a boost of $10 million from the fund.

The second, by Sen. Juan "Chuy" Hinojosa, D-McAllen, would restore money to the fund by placing a $2.15 fee on all cigarette packs sold by “nonsettling manufacture companies” (i.e., the big companies like R.J. Reynolds and Philip Morris). Under a 1997 settlement, these companies agreed to pay Texas a lump sum every year based on national cigarette sales to pay for tobacco-related illness. Hinojosa said lower cigarette sales had reduced the amount of money Texas actually recoups, and that his amendment would “make them pay their fair share.”

In the end, SB 1581 passed 19 to 12.

Editor's note: A correction has been made to this story. Wentworth's amendment would allow licensed students at all public universities to carry a concealed handgun.

How to Navigate Texas' School Finance System

by Morgan Smith | Texas Tribune
March 30, 2011

The Texas public school finance system, responsible for underwriting the education of the nation’s second-largest student population, is notoriously byzantine. Parsing the jargon alone — golden and copper pennies? hold harmless? recapture? — can prove a hopelessly frustrating task.

But finding a way through the labyrinth of school finance is more important now than ever as lawmakers deliberate an education budget that could, if the House has its way, leave public schools $7.8 billion short in funding. And as state Sen. Florence Shapiro, R-Plano, reminded members of the Senate Finance Committee when they passed their own education budget last week — with still staggering numbers that are $4 billion more than those from the lower chamber — any funding for education depends the passage of a new school finance bill.

In the House, state Reps. Scott Hochberg, D-Houston, and Rob Eissler, R-The Woodlands, have introduced separate legislation outlining reforms. Shapiro, who chairs the Senate Education Committee, and state Sen. Kel Seliger, R-Amarillo, have each said they are working on proposals.

Here’s our layman’s guide to figuring out the current system, compiled with the help of experts at the Texas Taxpayers and Research Association, the Equity Center and the Texas Education Agency.

The state’s 1,030 traditional school districts operate with a combination of federal, local and state revenue. In the 2008-09 school year, the federal government paid $4.7 billion, the thinnest slice of the pie at 10 percent. At $20 billion, the state paid 42.9 percent of the total funding for schools, and local districts paid 47.1 percent, $22.2 billion (the state’s portion includes money “recaptured” from local property taxes; more on that later).

Most federal money comes through Title I, the law intended to help districts educate economically disadvantaged students. That money is distributed based on the number of students who qualify for free and reduced meal plans — and almost all districts in the state receive some amount of Title I funds. They can also receive specialized federal grants, including those for students with disabilities, English-language learners, preschool programs, migrant students and vocational education.

Texas allocates most state funding for schools through a mechanism called the Foundation School Program, which was created in 1949 to distribute money from the state's Available School Fund. Now the program distributes operating funds to school districts via two streams that each contain a local and state component. A portion of state facilities funds also comes from the Foundation School Program. The Available School Fund contains earnings from something called the Permanent School Fund, which was established in 1876 and is made up of revenue from land sales, fuel taxes and leases on offshore oil lands. It also finances instructional materials and technology for schools outside of the Foundation School Program.

According to the Texas Taxpayers and Research Association, in the 2010-11 biennium, about $7.5 billion in state education funds came from the Available School Fund, lottery proceeds, recaptured property taxes, and taxes on oil and natural gas, franchises, tobacco, and used car sales. Additional money from the state’s general revenue accounts made up the rest of the state’s roughly $40 billion share. Over the last two years, the state has also used federal stimulus money to supplant state funding to the Foundation School Program.

Through the Foundation School Program, the state determines how much money each district gets for operations through two formulas: “Tier 1,” which constitutes the bulk of a district’s funding, and “Tier 2,” so-called enrichment funding.

The Tier 1 formula determines a district’s “entitlement” — the total cost a district bears in meeting basic education requirements for its students. The entitlement is calculated using the number of students who make up a district’s average daily attendance, adjusted by factors like the district’s size, the number of students instructed in areas like English-language training, gifted and talented classes, and special education programs, and its regional “cost of education” index. (That index, assigned to districts in 1991, is based on size, teacher salaries in neighboring districts, and percentage of low-income students there in 1989-90. It has not been updated since then.)

A district’s portion of its Tier 1 entitlement is calculated by subtracting whatever amount of money a $1 tax rate raises from the taxable property within its borders. The breakdown between state and local funding can vary widely from district to district. For example, if a district’s entitlement is $100 million, and the $1 tax rate raises $43 million, the state will chip in $57 million. For a district with lower property values, that local number could be $10 million, and the state’s portion could be $90 million.

If a district happens to exceed its entitlement with the local money levied by its dollar tax rate, the state can “recapture” those extra funds. Recapture, also referred to as “Chapter 41” or “Robin Hood,” requires property wealthy districts to share their local tax revenue with the state to ensure that all public schools in Texas receive equitable funding.

The Tier 2 formula depends on the famed “golden” and “copper” pennies. It uses calculations based on a district’s “compressed tax rate,” which the Legislature created in 2006 when it reduced maintenance and operation property taxes by a third. Most districts, which were taxing at $1.50 in 2005, have a compressed tax rate of $1 (that’s per $100 of property value).

The state calculates its share of Tier 2 funding based on each “penny” a district chooses to tax above its compressed tax rate (which, for simplicity’s sake, we’ll assume is $1, but can differ from district to district and ranges from $0.64 to $1.09). The law caps each district’s maintenance and operations property tax rate at $1.17 and requires districts to hold elections to tax more than 4 cents higher than the compressed rate. The first six pennies a district levies above a dollar are not subject to recapture — thus they are called “golden.”

For equity purposes, the state guarantees every school district the same amount of revenue that the Austin Independent School District raises with a penny of tax rate — which in 2008-09 was about $60 per penny per student. If a district is unable to raise that amount locally, then the state fills in the rest. For those first six pennies above the compressed tax, any amount a district raises above $60 is protected from recapture.

Any money a district raises with pennies seven through 17 — so-called “copper pennies” — is subject to recapture. If a district raises more than $31.95 of revenue per copper penny, that overage goes back to the state. If it fails to raise that amount, the state will supplement its funding until it gets to that $31.95 level.

After both the state and districts have paid their part through the formulas, what’s called “target revenue” comes in. In 2006, when the Legislature reduced the property tax rate, the state guaranteed that districts would get no less than the amount they received per student at that time. They would be "held harmless" against losing any money because of changes by the Legislature. If after both the Tier 1 and Tier 2 formulas are run, a district ends up with less than its “target revenue” number, the state makes up the difference — something it does for about 900 districts, according to the Texas Taxpayers and Research Association.

Last session, the Legislature voted to give districts another $120 per weighted student to create a new target revenue number in response to concern from districts that the 2006 formulas did not give them enough money to operate at current costs. The state aid that funds up to the target revenue number is what lawmakers call “target revenue hold harmless” funding — because, in essence, the state is holding a district “harmless” to a certain revenue level because it is not letting them drop below it.

What additional layers lawmakers will add with changes to the system this session is anyone’s guess, says Sheryl Pace, senior analyst at the Texas Taxpayers and Research Association. They could punt, fixing the current system by passing a bill that’s simply a vehicle for distributing blanket cuts across school districts. They could change elements in the funding formulas to redirect more money to poorer districts. Or they could scrap the system entirely and move to a block grant per student.

“The options are pretty much endless of what they could try to do,” Pace says.

Houston lawmaker likens funding cuts to the Titanic

Hochberg says $10 billion cut would sink state's education system

By GARY SCHARRER | Houston Chronicle, AUSTIN BUREAU
March 8, 2011

AUSTIN — One of the Legislature's school finance experts has a new school funding bill that would create a totally equalized school funding system with no rich or poor school districts — and that he concedes he would not vote for.

Rep. Scott Hochberg's plan is intended to show the crippling effect on Texas public schools if lawmakers take nearly $10 billion away from education to close a massive budget shortfall.

Under HB 2485, all school districts would be treated as equal passengers on the Titanic, Hochberg, D-Houston, said Tuesday, as Senate members on the other side of the Capitol discussed ways to allow schools to furlough teachers and modify class size limits in an effort to deal with the budget crisis.

"All are in the same lifeboats," he said.

Without lawmakers finding new revenue or pulling money out of the $9.4 billion Rainy Day Fund, Hochberg's bill would mean a $326 million cut for Houston ISD, or about $1,328 less per student. Cypress-Fairbanks ISD would see a $60 million cut, or $455 less per student; Spring Branch would get cut $52 million, or $1,282 per student.

"It's important for members to know what $9.8 billion (in cuts) means, and what it means for their school districts," Hochberg said.
Creating attention

The proposed $9.8 billion cut in the basic public education funding program does not include at least $1.3 billion in discretionary state grants covering services such as Pre-K, dropout prevention programs and teacher excellence bonus awards.

Hochberg's bill is largely an effort to create attention for the realities of mega cuts in public education.

It would cut about 20 percent out of the Houston ISD budget.

"For us to make that kind of cut would vastly impact schools. You are talking about significantly fewer teachers when students return to class next fall," Houston ISD spokesman Jason Spencer said. "You are talking about layoffs the likes of which this school district hasn't seen in generations. It's catastrophic."

On the Senate side of the Capitol, legislators have looked at several school finance models. The most recent would limit school cuts to about $2 billion per year. Senate Education Chairwoman Florence Shapiro, R-Plano, speculated that she might have a better idea on school funding late next week.

Shapiro pitched SB 3 before her committee. The bill would free schools from mandates and rules, giving them greater flexibility to handle budget cuts.

Her bill would allow school districts to lower teacher pay and to temporarily furlough teachers for up to seven days per year as long as they are not instructional days.

Under SB 443, filed by Sen. Dan Patrick, R-Houston, student-teacher ratios would change from 22-1 maximums in elementary grades to a 21-1 district wide average. His bill also would set a hard cap of 24 students per class.
Flexibility would pay

Giving school districts more classroom flexibility would save Houston ISD as much as $30 million and Cypress-Fairbanks ISD $6.7 million, Patrick said.

Considering steep budget cuts, the Shapiro and Patrick bills would give school districts flexibility "to manage personal costs in the best interest of students," said Richard Middleton, North East superintendent and legislative chairman for the Texas Association of School Administrators.

"It allows me to be more strategic in how I use resources," Middleton said, explaining that he could load up some classes with 23 or 24 students while lowering some to 12 or 18 students in schools with struggling enrollments.

"If we don't have some flexibility at the class grade level, it's going to require our middle schools and high schools to carry the burden of trying to balance our budget through class size reductions," Houston ISD Superintendent Terry Grier said. "And that worries me a great deal."

Most educator groups opposed the bills, especially as they allow larger class sizes.

"The public supports smaller class size," said Jennifer Canady, a spokeswoman for the Texas Association of Professional Educators.

What $9.8 Billion in Texas School Cuts Looks Like

Here's the link to Rep. Hochberg's School Finance Bill

-Patricia

by Ben Philpott | Texas Tribune
March 9, 2011

When lawmakers file a school finance bill, they publish a spreadsheet showing how the new funding formulas affect each of the state's more than 1,000 school districts. This year, with a proposed budget that currently cuts $9.8 billion from public schools, no such spreadsheets have been published.

That's, in part, why state Rep. Scott Hochberg, D-Houston, has filed a series of school finance bills — so lawmakers will know what to expect before voting on the state budget.

"We'll be laying out a budget that cuts $9.8 billion out of the schools," Hochberg said. "But that's a number that doesn't mean anything to a legislator unless they know that means you're taking between $500 and $2,500 dollars" per weighted student out of their local district.

Hochberg's bill, though, won't likely make it to the House floor (odds are on Public Education Committee Chairman Rob Eissler's), and he freely admits he doesn't like his own legislation.

"Given the drastic effects on many district as a results of the budget cuts, I truly hope this bill is a starting line, not a finish line," Hochberg said. "This is not a bill I would like to vote for as currently drawn."

Hochberg's per-district calculations aren't out just yet, but the new funding formulas would increase the number of so-called Robin Hood school districts, wealthy districts whose funding is partially redistributed to poorer districts, and increase the amount taken from existing Robin Hood districts.

Study: State funding cuts will hit South Texas school districts hard

By Jesse Bertron | Rio Grande Guardian
February 15, 2011

AUSTIN, Feb. 15 - As the legislative session heats up in Austin, legislators are grappling with some numbers that are starting to make South Texas public schools blanch.

In a recent study, school finance gurus Moak, Casey, and Associates claimed that Brownsville, La Joya, PSJA, and Edinburg ISDs, could lose a combined $140 million per year under the House’s proposed budget.

The study lays out three potential scenarios: The most gruesome for South Texas is a 15 percent across-the-board cut of general operating expenses for schools, which the study predicts could result in cuts of more than $50 million to Brownsville ISD, $30 million to La Joya ISD, $33 million to PSJA ISD, and $34 million to Edinburg ISD.

These are the four biggest school districts in the Valley. Overall, school districts in the Texas Education Agency's Region 1, which covers the Rio Grande Valley and Laredo, face state budget cuts of anywhere from $305.4 million to $418.6 million, the Moak Casey study predicts.

These figures explain why groups like Valley Interfaith and the Equal Voice for America's Families network are calling on state legislators to produce a more "balanced" budget than HB 1, with increased taxes, a closing of tax loopholes, and use of the $9 billion Rainy Day Fund.

“I’m telling school districts, ‘I really believe that’s a worst-case scenario’,” said state Rep. Ryan Guillen, the lone Valley lawmaker on the House Committee on Public Education, referring to the Moak Casy study. Guillen, a Democrat from Rio Grande City, said that school districts would be using the study’s numbers to help with hiring decisions in the face of a mid-April deadline for offering contracts to teachers.

State Rep. René Oliveira, D-Brownsville, though, said the numbers could be even worse than what Moak Casey projects. While warning that the numbers presented by the study are “a range, not a specific outcome,” Oliveira cautioned that, “Districts need to realize that the worst case scenario from Moak, Casey may not actually be the worst case scenario. Depending on how the new formulas work, especially if we continue to overprotect property wealthy district and small-sized districts, individual districts could be harmed more than the Moak, Casey estimates.”

Martin Peña, executive director of the South Texas Association of Schools, said that although he expects the final Senate and House budgets to have smaller cuts in education funding, the figures from Moak, Casey and Associates are probably the best guide currently available.

“If I’m going to use anybody’s educated estimates, I’m going to use this firm,” said Peña. “There’s nobody else that does what they do, and they’ve got so much experience and knowledge.”

In order to understand the numbers presented by the study, Peña explained, some recent Texas history is required.

“The districts, in 2006, were required to lower their taxes by one third,” Peña. “But, the State told districts, ‘You’re going to receive at least the same amount of money that you’re now getting per student’.”

A new business margins tax was introduced to compensate for the school property tax. But the margins tax has underperformed, leaving the state short of money.

So, said Peña, since the State ends up paying districts a certain amount per student in order to maintain those 2006 funding levels, “that’s money that the districts are being sent because their tax collections, being that they’re one third less, don’t bring in enough money, so they write a check out to the districts for the difference.”

That check is called Available State Aid for Tax Reduction (ASATR), and it lies at the center of what Moak, Casey, and Associates predict might happen this session.

In addition to an analysis of a 15 percent cut in school budgets, the study lays out two other potential money-saving measures the state could take. First, Texas could eliminate the ASATR, dropping school funding well below the 2006 mark.

This would result in estimated budget cuts of more than $31 million for Brownsville, cuts of more than $22 million for Edinburg, cuts of more than $18 million for La Joya, and cuts of more than $20 million for PSJA.

The final option as outlined by Moak, Casey, and Associates, is that ASATR would be prorated: the school districts with the lowest property taxes per student would get the most ASATR funding. Said Peña: “That’s the one where [The Valley] will be cut the least.”

“Let me give you an example. If you look at San Isidro and McAllen, San Isidro has—their total property values in San Isidro are much lower than McAllen. But per pupil, they’re considerably higher. Because you divide it by the number of students you have. [The prorated ASATR] would look at that, and because they would look at that, it would cut our schools the least.”

The prorated ASATR plan would also help to lower the total needing to be cut, Peña said.

“If you take money away from these districts up here at the top, that’ll bring down that $5 billion. Instead of looking for $5 billion in cuts, you might be looking for $4.5 billion in cuts,” Peña said.

“Under this proposal, [Brownsville ISD] would still be cut. Fifteen million is a lot of cut. That’s a lot of people. But that’s not near as much as [the other two proposed options].”

Under this option, Edinburg ISD would also lose more than $18 million, La Joya more than $7 million and PSJA more than $11 million.

One thing everybody agrees on is that this funding crisis will prompt a long, hard look at current school finance laws, Oliveira told the Guardian.

“First, we must recognize that maintaining current law requires $9.8 billion dollars more than the base budget appropriates. We did not add any new money for the 80,000 new school children that enroll every year. We didn't appropriate money to make up for the drop in local school district property values. We did not replace the $3.3 billion in federal stimulus money we spent last session. We also didn't cover the $1.4 billion of accounting tricks used to increase education spending in the last budget,” Rep. Oliveira said.

“The funding levels in the base budget assume, and in fact probably require, a new school finance system. The current formulas simply do not work with the amounts of money appropriated in the bill.”

State Sen. Eddie Lucio, Jr., the Valley’s only legislator on the Senate Finance Committee’s subcommittee on public education funding, agreed that current school finance laws, at least as they are currently enforced, are inadequate. The panel began meeting on Monday, hearing complex testimony from experts across the state.

“School finance is complicated, but the truth is simple,” Lucio said. “The Legislature has historically short changed Texas schools. What was confirmed today is that the current school finance system is a band-aid fix that has little to do with the actual cost of educating students.”

But, said Rep. Guillen, the funding crisis also opens up the possibility for progress.

“There’s going to be great challenges to figure [the budget] out. We’ve got to keep in mind equity; we’ve got to keep in mind those hard-to-teach kids out there when we do this. But I also think, when we do this, even though we’re expecting less money, I think we’ve got some opportunity to increase equity and to do things that we haven’t been able to do in the past.”

Editor's Note: This story has been revised from the original posting to reflect new information from Rep. Oliveira's office.

Savage Inequalities Revisited: Adequacy, Equity, and State High Court Decisions

Another really good article by Verstegen, Venegas, and Knoeppel on the financing of our public schools.

Angela

School finance suit on hold?

By Gary Scharrer
Sunday, December 12, 2010

AUSTIN — Texas school districts are ready to sue the state again over public school funding but likely will wait to see what the state Legislature does in the spring.

“School districts are so disgusted and fed up with this funding situation because it's the same thing year after year after year. We're ready to go,” said John Folks, past president of the Texas Association of School Administrators. Folks is the superintendent of San Antonio's largest school district, Northside Independent School District, and the former superintendent of Houston's Spring ISD.

School districts complain of funding disparities that create large differences — more than $20,000 per classroom — with neighboring school districts. They contend education funding is not keeping up with overhead costs and is insufficient to meet more rigorous academic standards.

At least 60 percent of school districts are now using reserve funds to help pay operating expenses, according to the Texas Association of School Boards.

Adding to educators' anxiety is the upcoming legislative session in which public school funding cuts are expected to be on the table.

State and legislative leaders have pledged to cut their way out of a budget shortfall projected to exceed $20 billion over the next two years. With public education eating up 44 percent of the state's general revenue budget, it will be virtually impossible to spare schools from the ax.

Even a 5 percent cut would mean $30 million less for Folks' school district, resulting in larger class sizes and cuts in staff and programs, said Austin lawyer Buck Wood, a veteran litigator from previous school finance lawsuits.

“School districts right now are in a state of shock,” Wood said. “Things are much worse than even I thought just a few months ago.”

Adding to the urgency is the fact that Texas is adding about 85,000 public school students a year.

“That begs the question — whether or not you are really gutsy enough to go in and start voting to fire 10 percent of your teachers in your school districts. That's what it's going to take, literally, to make that kind of cut,” Wood said.The San Antonio Independent School District feels particularly squeezed because it has one of the lowest revenue-per-student levels among the school districts in Bexar County. San Antonio ISD's $5,408 per student is $344 below the statewide average, according to Texas Education Agency figures.

San Antonio ISD would have an extra $86 million if it received the same per-student funding as Alamo Heights ISD. Funding formulas are based on 2006 allocations and a bill that Texas legislators approved in May of that year.

“We are disappointed that public education stands to be cut, but it is inevitable given that the projected deficit is over 27 percent of the state budget, and K-12 expenses make up 44 percent of the state budget,” San Antonio ISD Superintendent Robert Durón said.

Until Texas Comptroller Susan Combs provides a revenue estimate next month, state officials and legislative leaders will not know the actual size of the budget shortfall.

House Public Education Chairman Rob Eissler, R-The Woodlands, said he doesn't see how public education can escape cuts but is working on a plan to make sure reductions don't hurt equity or erode “adequate” school funding.

“I would like to come up with a more transparent, fairer and simpler school finance plan that is a cost-based revenue system rather than a revenue-based cost system,” he said.

The school funding system is based on how much revenue the state has instead of one based on the true cost of educating the state's 4.8 million public school children.

Durón prefers that school districts wait before seeking help in the courts.

“Waiting a few more months to see what happens cannot hurt. It will take years for a resolution to come back from the court option,” he said.

It makes sense to wait, agreed David Hinojosa, a senior lawyer for the Mexican American Legal Defense and Educational Fund, which has played key roles in earlier Texas school funding lawsuits.

“Although the system may be unconstitutional right now, we should give the Legislature an opportunity to do what's right for the children of Texas,” Hinojosa said. “But if they go in the wrong direction and start cutting public education, then they should expect a very tough fight on their hands.”

The state lost four school finance rulings before the Texas Supreme Court stemming from the 1984 Edgewood case — and another high court ruling went against the state in 2005.

Budget cuts to education could be devastating at a time when the state continues to ratchet up academic standards and school dropouts remain a challenge, Hinojosa said.

Some legislators and groups believe education funding is sufficient, although not appropriately spent.

“We want more education for our dollars. We don't want to simply continue to throw more dollars at education,” said Peggy Venable, director of Americans for Prosperity-Texas, a group that advocates for smaller government.

Only 50 percent of funding goes for actual instruction, she said.

Longtime school finance expert Lynn Moak of Austin said Texas faces a challenge and a choice.

“Reduce education funding and risk the potential of curtailing economic growth in the future,” he said. “Or, restructure the financing of education providing a firm basis for meeting educational challenges of rising standards coupled with increasing family poverty.”

Over the past 10 years, the number of Texas public school children from low-income families has increased by about 894,000 — virtually representing the entire enrollment growth.

Youngsters from low-income families are more expensive to educate because of several factors, including language difficulties.

Texas Lawmakers Look to Cut Texas Education Budget

Check out the Comptroller's site for the Financial Allocation Study for Texas, that has information on WHO is involved in the discussion to develop a methodology to measure efficiency.

-Patricia

by Ben Philpott
December 3, 2010

Figuring out whether a school district spends money efficiently is hard. Variables like student population, ethnicity, income level and even district geography all figure in the answer. Allen Spelce, a spokesman for Texas Comptroller Susan Combs, says lawmakers soon will have a better picture.

"In 2009 the Legislature directed the comptroller's office to develop a method to compare school districts on a level playing field," Spelce says, "and to determine which districts and campuses allocate their financial resources in a manor that contributes to high academic achievement and cost-effective operations."

The study, to be released next week, will show how much bang schools and districts are getting for the education buck, and it should have enough detail that lawmakers can see what's working and what isn't in all districts — no matter how big or small, rural or urban. The report will be one of the main factors lawmakers use as they decide what has to be cut from the budget. "Where we get into trouble with efficiency is when you have a state system that's as inefficient as the current one is," says Ray Freeman, deputy executive director of the Equity Center, a school finance think tank. "And then you want to tell school districts they need to be more efficient."

Freeman believes the inefficiency is at the state level because the per-student funding amount varies wildly from district to district. Instead, he says, that pay scale should be made uniform, and then it will be easier to figure out which districts are being efficient. Freeman also worries whether all this talk of efficiency is just code for budget cuts — like not giving schools extra money to educate the thousands of new students who have moved to Texas in the last two years.

"The new students are going to be there regardless," he says, "and the school district's got to educate them. So it's essentially a budget cut if they don't recognize the fact that we're going to have thousands of new students to educate in the state."

The lawmakers who will write the state's education budget have already said they're working on a new school finance system, one that might provide funds for all those new students. But in a year of efficiencies and budget cuts, no one expects it to be much.

UT faculty members want role in budget discussions Provost pledges increased involvement, transparency.

By Ralph K.M. Haurwitz | AMERICAN-STATESMAN STAFF
Monday, Oct. 25, 2010

Faculty members at the University of Texas said Monday that they want to be in the loop on budget decisions, especially during the sort of tough financial times the university is currently facing.

A resolution adopted by the Faculty Council called for "significant" faculty involvement in budget matters and expressed concern about low-paid faculty members, staff members and graduate students serving as teaching assistants, who collectively have accounted for scores of layoffs in the past year or so.

"I think it's highly variable," Dean Neikirk , chairman of the council and a professor of electrical and computer engineering, said of faculty involvement in budget discussions at UT's colleges, schools and other units. He said the council is planning to survey the various units to gauge faculty members' roles.

Budgeting has been primarily the province of the business office and the president, provost, the deans and other top officials. Steven Leslie, the executive vice president and provost, told the Faculty Council that he wants to increase faculty involvement and the transparency of deliberations.

"We're working to try to figure out how to do that," Leslie said.

Among the questions are whether each academic unit should make its own arrangements or whether a common approach should be adopted. Alan Cline , a professor of computer sciences, said faculty members had more say on budget matters 25 years ago than they do now. Neikirk said he'd like to establish a structure that assures faculty involvement at the beginning of universitywide budget discussions.

Like other public universities in Texas, UT has been instructed by Gov. Rick Perry and legislative leaders to prepare plans for a 10 percent reduction in state funding. Lawmakers will make the final call when they meet next year.

UT President William Powers Jr. has warned that a 10 percent cut would require the elimination of 600 faculty and staff jobs in the next two years or so. That would be on top of positions already shed as a result of a previously imposed 5 percent cut in state funding.