SBISD Legislative News

Why It's So Hard to Fund Public Education in Texas

By Jimmie Don Aycock, Oct. 11, 2016

State Rep.Jimmy Don Aycock, R-Killeen, is currently chair of the House Public Education Committee. This article appears in TribTalk, a publication of the Texas Tribune.

As a parent, I was frustrated. Recent legislation was changing school funding. An array of tests was changing teaching. I felt the need to get involved and try to make the changes go as well as possible. I ran for and won a seat on the local school board.

The year was 1985.

Over 30 years later, I'm still frustrated. Since that time on the school board I've served on a college board and as a state representative. I've served on the Higher Ed Committee, chaired the Public Education Committee, chaired the Article III Appropriations Subcommittee (which deals with all education funding) and listened to thousands of hours of testimony and reports. While I certainly don't have all the answers, I think I know why education policy — especially the funding — is so hard.

Aycock

First, the Texas Constitution simply states that schools should be "public," "free" and "efficient." It also states the Legislature is responsible for providing the system of education. Then it adds a requirement that the Legislature cannot use a statewide property tax to fund the system. And that's where it starts getting messy. Texas has no income tax and no state property tax, so our schools depend heavily on local property taxes. Unfortunately, there are vast differences in the "taxable wealth per student" from one area of the state to another. Also unfortunate is the fact that "taxable property wealth" has little or no correlation to the prosperity or poverty of the resident students.

Second is the Texas courts. Going back to the 1980s, a variety of cases have generated some interesting case law around school finance. In general, the courts require a substantial amount of "equalization," which means moving money from property-wealthy districts to property-poor districts — the so-called "Robin Hood" plan.

Third, as time goes by massive changes occur. Plans that seemed workable are altered by unexpected student growth, property value changes, demographic changes, technology changes, political shifts and other factors too numerous to mention. Even if one could "fix school finance" today, the system would need to be fixed again very soon.

The Public Education Committee met for two days recently with the Appropriations Committee to discuss school finance. There are at least three immediate crises facing education funding in Texas. I would like to speak briefly to each.

• Houston is facing "Recapture." In short, property value increases have triggered the Robin Hood feature of the funding system requiring Houston ISD to send money to other districts. They can choose to write a check or they can choose to have commercial property reassigned to poorer districts. Either way is painful. Quite simply, the system doesn't function unless some form of redistribution occurs. Austin, Spring Branch and many others have faced this same issue. Houston cannot be treated differently. Dallas, if present trends continue, is probably only two to three years away from the same situation.
• Many districts are about to lose Additional State Aid for Tax Reduction. In 2006, districts were given state aid in exchange for property tax reduction. At the time, there were assurances the aid would be ongoing. In more recent years, the funding plan has been changed to expire in 2017. Some districts lose a little. Some would lose 40 percent or more of funding.
• Fast-growing districts are caught between tax limits and continued growth. About 75 or 80 of the state's 1,219 districts are absorbing most of the 80,000 new Texas students annually. A cap on bonded debt taxes — the interest and sinking, or I&S tax — prevents many of these districts from borrowing to build new schools while the growth just keeps coming.

These are just the three most pressing questions. There are plenty more, but unless we get a grip on these, the rest don't stand a chance. So what are the possibilities? A statewide property tax would solve the equity issues. It seems highly unlikely that such a constitutional amendment would pass.

Another possible solution is to reduce the number of taxing districts from over 1,000 to a much smaller number with less wealth variation. Last session I drafted House Bill 654, which took this approach. The concept would still redistribute taxable wealth but would do so within a group of districts with a common interest and common tax rate. The state funds would then be the same to every weighted student, thus avoiding distribution fights. While there are lots of kinks to work out in such a plan, I believe it may be the long-term solution since it doesn't require a constitutional amendment.

Any distribution plan must have funds to distribute. That amount will always be controversial. My personal opinion is that Texas needs to fund schools better than our current position, which is near the bottom of all U.S. states — by most measures, we get results near the national average with funding near the bottom. Remember that any added dollars will set off a fight about how to distribute them — a strong legislative disincentive.

Texas is a low-tax, low-service state, so any increase in taxes has political peril. A few years ago, I suggested an increase in the motor fuel tax. Under our Constitution, 25 percent of that tax goes directly into school funding, and the road fund gets 75 percent. These added funds, combined with savings from rising property values, would allow the state to raise the basic allotment to schools. As basic allotment increases, the problems of recapture and Additional State Aid for Tax Reduction are reduced sharply.

On a recent drive, I noticed gas price variation of more than 20 cents within 2 miles of my home. The fuel tax is transparent, consumption based, efficient to collect and dedicated in its use. That's exactly what conservatives demand from a tax. Yes, it's a tax increase. Yes, I got scolded when I presented it. But as our dependency on property taxes has risen, our complex funding mechanism continues to undergo multiple crises.

Various groups are coming forward with plans. All should be seriously considered. There are solutions, just no easy ones.