Category Archives: Budget

From The Texas Tribune: Hey, Texplainer: Does the Texas lottery fully fund public education?

A Texas Lottery display in Austin on April 3, 2017. Photo by John Jordan

A Texas Lottery display in Austin on April 3, 2017.
Photo by John Jordan

Today’s Texplainer is inspired by a question from Texas Tribune reader Lynne Springer. Send us your questions about Texas politics and policy by emailing texplainer@texastribune.org or through texastribune.org/texplainer. 

Hey, Texplainer: The lottery is supposed to fund education — that was stated at the get-go. Why is lottery money being used for other things?

When they were trying to sell the lottery to voters more than 25 years ago, political candidates left many Texans with the impression that 100 percent of the money earned from the lottery would go toward education and that the lottery might generate enough money to pay for all public education.

Neither is true.

Through a constitutional amendment, voters approved the creation of the Texas Lottery in November 1991. Between 1992 and 1997, $4 million from lottery ticket sales and unclaimed prizes went toward the state’s general revenue fund — meaning it could be used for any state expense.

It wasn’t until after 1997 that Texas schools became a specific beneficiary of the money.

The breakdown of how that money is distributed now looks like this, according to the Texas Lottery Commission website:

  • 63 percent is paid to lottery winners
  • 27.1 percent funds Texas education through the Foundation School Fund
  • 5.4 percent goes toward retailer commissions
  • 4 percent goes to the lottery for administrative costs
  • The remainder, about 0.4 percent, funds the Veterans Assistance Program and other state programs

The commission announced in September 2016 that it had earned more than $5 billion in sales for the 2016-17 fiscal year.

“This is the first time in our history that we have generated more than $5 billion in sales,” Gary Grief, the lottery’s executive director, said in a news release. “We are excited to celebrate the extraordinary growth we have achieved and proud to make our largest contributions ever to both Texas public schools and veterans’ programs.”

Of that $5 billion, roughly $1.3 billion was allotted to the Foundation School Fund, which is administered by the Texas Education Agency. The money is used for expenses such as teacher salaries, bilingual education and special education. TEA officials said the Foundation School Program should be thought of “as a huge pot of money” with lottery revenue being just one contributor to the pot.

In 2015, the Legislature budgeted $48.4 billion in state funds for public education over two years, which included $2.4 billion that the lottery contributed to the state’s foundation school account.

According to the Texas Lottery’s website, the lottery has contributed $20 billion to the Foundation School Fund since 1997. But TEA officials say there’s no telling which Texas school districts receive lottery funding.

The bottom line: The money earned by the Texas Lottery has never been fully dedicated to Texas education. Since 1997, a percentage of lottery revenue has gone toward funding the state’s public schools, but not all of it.

This article originally appeared in The Texas Tribune at https://www.texastribune.org/2017/07/07/hey-texplainer-does-lottery-fully-fund-public-education/.

Texas Tribune mission statement

The Texas Tribune is a nonprofit, nonpartisan media organization that informs Texans — and engages with them — about public policy, politics, government and statewide issues.

Teach the Vote’s Week in Review: April 7, 2017

It was another big week at the Texas Capitol. Here’s the latest news from ATPE:


The Texas House passed its version of the general state budget bill in the early morning hours of April 7 after nearly 16 hours of lively debate. Senate Bill (SB) 1 provides for appropriations for state needs over the next two fiscal years. It also sends a strong message about attitudes in the House toward private school vouchers.

As approved unanimously by the Senate on March 28, the $106.3 billion bill provided for school enrollment growth and needs of the Foundation School Program, but did little to address the looming funding crisis for TRS-Care or add any additional support for public education to offset cuts from recent years. The House Appropriations Committee, chaired by Rep. John Zerwas (R-Fulshear), substituted its own language into the bill during a March 29 committee hearing, and then the House considered hundreds of additional amendments in yesterday’s floor debate.

Lobbyists at budget debate

ATPE Lobbyists Kate Kuhlmann, Mark Wiggins, and Monty Exter awaited the House’s budget vote Thursday night.

As finally passed, the House’s version of SB 1 creates a $218.2 billion budget, which includes tapping into the state’s Economic Stabilization Fund (rainy day fund) to the tune of $2.5 billion to help address critical needs like an extra $500 million for retired educators’ rising healthcare costs. The final House vote on the bill was 131-16, well above the two-thirds threshold needed for accessing the rainy day funds.

Leading into yesterday’s floor debate, the House Calendars Committee had already adopted a “put and take” rule requiring that any amendment to the budget that proposed spending more money in one area must cut an equal or greater amount of spending from another area of the budget. That rule resulted in several heated arguments among House members as representatives looked to raid each other’s favored programs for funding sources.

Voucher vote boardWithout question, though, the most dramatic votes of the night included multiple votes taken to prohibit the funding of private school vouchers. The House first considered Amendment #8 by Rep. Abel Herrero (D-Corpus Christi) to prohibit the use of certain state funds provided to the Comptroller for private school vouchers. At ATPE’s request, Rep. Gary VanDeaver (R-New Boston) filed Amendment #9, an amendment to Herrero’s amendment, to ensure that the legislature could not spend any public funds on private school vouchers. ATPE supported both of these amendments, which the House passed overwhelmingly. Freshman Rep. Briscoe Cain (R-Deer Park) offered another amendment #10 to try to carve out an exception that would allow the legislature to fund vouchers for low-income families, but the House similarly rejected that measure by tabling the Cain amendment. View the unofficial vote breakdown for these amendments here. ATPE thanks all the legislators who voted to prevent the legislature from wasting taxpayer dollars on unregulated private and home schools and appreciates all the educators who took time to contact their legislators about these important votes.

The House budget votes this week spell disaster for the voucher legislation heavily favored by Lt. Gov. Dan Patrick and Gov. Greg Abbott. The primary voucher bill, SB 3 by Sen. Larry Taylor (R-Friendswood), passed the Senate on March 30 by an 18 to 13 vote. Leaders in the House including House Public Education Committee Chairman Dan Huberty had already expressed doubt that the voucher bill would survive after being sent to the lower chamber. Yesterday’s budget votes punctuate that sentiment, evidencing a clear lack of support for vouchers this session in the Texas House. For more on the significance of yesterday’s voucher-related budget votes, read this article from The Texas Tribune republished on our blog.

 


Earlier this week, the House Public Education Committee heard a number of bills dealing with special education and also approved a bill aimed at improving the state’s much-criticized A-through-F accountability system for school campuses. As ATPE Lobbyist Mark Wiggins reported on our blog, the committee unanimously passed Chairman Dan Huberty’s (R-Kingwood) House Bill 22 on Tuesday.

The committee will meet again on Tuesday, April 11, with a lengthy agenda. Its Subcommittee on Educator Quality will meet Monday, April 10, to consider several bills pertaining to educator preparation and certification. ATPE will be there to weigh in on bills of interest, of course. Stay tuned for more details next week on our Teach the Vote blog.

 


TRS logoThe Teacher Retirement System (TRS) board of trustees also met this week. ATPE Political Involvement Coordinator Edwin Ortiz attended the April 6 meeting and provided this report.

First, TRS investment managers shared news that the overall pension fund is performing considerably well despite economic uncertainty leading up to the 2016 elections. The fund is actuarially sound and has enough money to pay for its retirement benefit obligations until 2048.

The board meeting also addressed cyberattack prevention and defense measures being undertaken by the TRS staff. With cybersecurity threats dominating the news lately, TRS has been taking the necessary steps to secure members’ information by implementing safeguards that would prevent any cyberattackers from gaining access to the TRS system. Hackers are becoming bolder and using every method to gain access to vital information such as Social Security and bank information, but TRS staff along with security vendors are working to keep one step ahead of cyber criminals.

Finally, TRS Executive Director Brian Guthrie provided the board with a legislative update. Mr. Guthrie explained that he and his staff are tracking various bills and working closely with certain legislative offices on specific pieces of legislation that are of concern. One such bill is Senate Bill (SB) 788 by Sen. Joan Huffman (R-Houston) that would reform TRS-Care. The bill sparked some discussion at Thursday’s board meeting because of sweeping changes it proposes, including the elimination of TRS-Care 1, 2, and 3. As it’s currently written, SB 788 would require a high-deductible plan for participants under the age of 65 and a Medicare Advantage plan for anyone eligible for Medicare.  Mr. Guthrie indicated that he would continue to work with the stakeholders to ensure that retirees feel a minimal impact, but agreed that something needed to be done this session because of the increasing healthcare costs.

ATPE members can find additional information about TRS bills being considered this session by logging into Advocacy Central.

 


ATPE Lobbyist Kate Kuhlmann provided a blog update on this week’s work by the Senate Education Committee. Its deliberations included some controversial bills relating to home school students and charter school partnerships. Read more in Kate’s post here.

Also this week, the Senate Committee on State Affairs heard SB 179 by Sen. Jose Menendez (D-San Antonio) to address the growing problem of cyberbullying. ATPE supports the bill, which has been named David’s Law in memory of San Antonio teenager David Molak who tragically took his own life after being cyberbullied. The bill calls for tougher civil and criminal penalties for those who use electronic messaging to urge victims to commit suicide, and provides for prompt response and notifications when school officials learn about cyberbullying incidents.

 


 

From The Texas Tribune: Dan Patrick asked for a House vote on school choice. He got it.

Top House education official Dan Huberty has said private school choice is dead in the House. Representatives showed they overwhelmingly support that sentiment, in a 103-44 budget amendment vote.
Tribune_Dan_Patrick_School_Choice_LS_TT_jpg_800x1000_q100

Lt. Gov. Dan Patrick speaks during a rally at the Capitol for school choice January 24, 2017. Both Gov. Greg Abbott and Patrick spoke in favor of expanding school choice options. Students, educators, activists and parents marched on the south lawn to show their support for expanding school choice options during National School Choice Week. Photo by Laura Skelding for The Texas Tribune

Lt. Gov. Dan Patrick has challenged the House to at least take a vote on the Senate’s “private school choice” bill, one of his priorities for the Texas legislative session.

Early on during Thursday’s marathon budget discussion, House representatives showed him that vote would probably emerge as an overwhelming “no.”

They voted 103-44 to prevent state money from being spent to subsidize private school tuition, in an amendment to the Senate budget. In offering the amendment, with support from state Rep. Gary VanDeaver, R-New Boston, Rep. Abel Herrero, D-Robstown, said it was “in support of our public schools and our neighborhood schools.”

The amendment is not the last word. The House and Senate will need to reconcile their budgets before sending a final version to the governor for approval. And separate legislation that would create a public subsidy for private education has yet to be heard in the House. Patrick’s office did not immediately return requests for comment on Thursday’s vote.

The House’s vote came a week after the Senate, led by Patrick, voted out Sen. Larry Taylor‘s Senate Bill 3, which would create two public programs subsidizing private school tuition.

In a statement, Taylor said it was unfortunate that House members didn’t hear the details of SB 3 before Thursday’s vote.

“Our bill saved money, gave more students opportunities to get an education better suited for their specific needs, and left more money in public education as a whole and even in individual schools,” Taylor said in a statement. “I would hope that we would still have an opportunity to have those discussions.”

Rep. Hugh Shine, R-Temple, said no changes to the bill would persuade him to vote for it.

“If we allow vouchers to start in any form or fashion, they can grow and advance and affect our public education,” he said. “What they’re calling ‘choice,’ this voucher situation, is erroneous.”

The floor substitute the Senate approved was dramatically different than the original, intended in part to appease skeptical rural legislators by carving out rural counties from participating in the programs. Rural constituents consistently oppose using public money to subsidize private education because they do not have access to many private schools.

That tactic worked to get the bill through the Senate. But House members demonstrated Thursday that it wouldn’t be as straightforward in the lower chamber.

Rep. Briscoe Cain, R-Deer Park, a “private school choice” supporter, tried to change Herrero’s amendment Thursday to allow subsidies for students with household incomes below a given baseline. He took language from SB 3 indicating that a family of three with an income below $75,078 would be able to use the tuition subsidy programs.

“A lot of opponents of school choice say, ‘This is only for the rich.’ This amendment allows poor families to have a choice,” Cain said. His proposal failed 117-27.

House Public Education Chairman Dan Huberty, R-Houston, has said a private school choice bill would not make it through his committee, drawing criticism from SB 3 supporters. Asked if it was dead to him as an issue, Huberty said, “I believe so, yes.” He voted for the amendment blocking money to the tuition subsidy programs.

“Quote unquote absolutely not,” said Rep. J.D. Sheffield, R-Gatesville, when asked whether the changes to SB 3 carving out his counties from participating would change his vote on the bill. “Just because they sweetened the deal to pull in some people doesn’t mean it’s a good deal.”

In late March, lobbying group Texans for Education Opportunity used an online campaign to generate thousands of letters to 29 state representatives lobbying them to back education savings accounts, one of the subsidy programs in SB 3. Though the group claimed the letters were credible, the letters stirred up suspicion after no representative could find a constituent who remembered adding their name to that correspondence.

Of the 29 representatives targeted in the campaign, 26 voted Thursday to block money from funding “private school choice” programs.

Read related Tribune coverage here:

  • The Senate voted 18-13 Thursday to pass a major private school choice bill, creating two public programs that would subsidize private school tuition.
  • Legislative staffers Tuesday received a one-page report detailing changes to Senate Bill 3, which would exclude rural counties from participating in the private school subsidy programs and limit overall participation.

This article originally appeared in The Texas Tribune at https://www.texastribune.org/2017/04/06/texas-lt-gov-dan-patrick-asked-house-vote-school-choice-he-got-it/.

Texas Tribune mission statement

The Texas Tribune is a nonprofit, nonpartisan media organization that informs Texans — and engages with them — about public policy, politics, government and statewide issues.

Texas House prepares for lengthy budget debate

Dollar fanThe Texas House of Representatives will debate the budget on Thursday, April 6, which will determine the state’s investment in priorities such as education, healthcare, and infrastructure for the next two years.

The Senate approved its budget bill, Senate Bill (SB) 1 by Sen. Jane Nelson (R-Flower Mound), unanimously on March 28. The House Appropriations committee, chaired by Rep. John Zerwas (R-Fulshear), made a number of changes to the bill that would result in greater funding for public education. Now the full House is set to debate the budget bill tomorrow, and more than 400 floor amendments have been pre-filed for additional consideration.

ATPE has supported the House version of SB 1 over the Senate’s plan. In this bill, we believe the House leadership has demonstrated a stronger commitment to prioritizing the needs of public education, including a willingness to conservatively use the state’s rainy day fund to help address current shortfalls, such as the need for funding retired educators’ healthcare, while still maintaining a healthy balance in that savings account for future needs.

Among the floor amendments likely to be considered tomorrow, ATPE is urging support for amendments that would provide even more funding for TRS-Care and other public education needs. We are also asking legislators to reject any amendments that would divert taxpayer funds for any type of voucher program for unregulated private and home schools. A list of major budget amendments that ATPE supports and opposes can be found here.

The House version of SB 1 was approved unanimously by the bipartisan House Appropriations Committee, but it still faces a long road ahead. ATPE hopes that the House will send a strong message tomorrow by supporting the additional investments in public education and responsible use of the state’s Economic Stabilization Fund.

For updates on the budget debate, be sure to follow the ATPE Governmental Relations team on Twitter:

17_web_Spotlight_AdvocacyCentral_1Related: ATPE members are encouraged to visit Advocacy Central to send their state representatives a message about SB 1 and the funding needs of public education.

Senate committee approves budget proposal

ThinkstockPhotos-185034697_gavelcashThe committee substitute to Senate Bill (SB) 1, the Senate’s budget bill, was voted favorably out of the Senate Finance Committee on a vote of 15 to 0 this morning. The SB 1 committee substitute, which appropriates $106.3 billion in general revenue, reflects all of the recommended modifications to individual articles of the budget made by the work groups and adopted by the full Finance Committee.

In her comments, committee chairwoman Sen. Jane Nelson (R-Flower Mound) stated that SB 1 fully funds the Foundation School Program (FSP), including $2.6 billion for enrollment growth. Nelson also touted $25 million in spending for broadband expansion through the e-Rate program; $65 million to a new public / private partnership for pre-K (the committee substitute cuts $180 million in pre-K grants from SB 1 as it was originally filed); and $316 million to fund SB 788 by Sen. Joan Huffman (R-Houston), which would reform TRS-Care.

Senator Royce West (D-Dallas) probed staff from the Legislative Budget Board (LBB) on how to reconcile claims that SB1 fully funds the FSP while spending nearly $1.4 billion less in general revenue on the program. In response, LBB staff confirmed that SB 1 does fund the amount that current law calls for in FSP entitlements, but the funding level is $1.4 billion lower this session because increases in local property values mean that less funding is required through state general revenue. Due to this continued supplanting of state funding with local property taxes, the proportion of the state’s share of FSP funding is projected to decline to 38% or less by the end of the biennium.

SB 1 as substituted is expected to be brought up for a vote on the floor of the full Senate on Tuesday, March 28.

Teach the Vote’s Week in Review: March 17, 2017

Happy St. Patrick’s Day! Here’s a look at this week’s education news from ATPE:


17_web_AdvocacyCentral_RotatorImages_ATC_1217-49_StopVouchersOn Tuesday, March 21, the Senate Education Committee will hear Senate Bill (SB) 3, a voucher bill by the committee’s chairman Sen. Larry Taylor (R-Friendswood). The bill is among the lieutenant governor’s highest priorities to pass this legislative session, and educators are being urged to contact their senators to oppose this bill. ATPE members can use our communication tools at Advocacy Central to quickly message their senators about this bill.

NO VOUCHERSAs reported by ATPE Lobbyist Kate Kuhlmann in a blog post earlier this week, SB 3 has been called a “school voucher on steroids,” because it authorizes both Education Savings Account (ESA) vouchers for parents to spend on their children’s home or private schooling and tax credit scholarships to pay for private schools. To learn more about the dangers of these two programs, check out ATPE Lobbyist Monty Exter’s recent analysis of the bill here.

The Senate Education Committee had originally planned to hear SB 3 this week, but the voucher bill was postponed to next Tuesday. During yesterday’s hearing, the committee instead heard testimony on three bills pertaining to reporting on counselors, the use of epinephrine auto-injectors (epi-pens) in private schools, and the sequencing of high school math and English courses. ATPE supported SB 490 that requires districts to report the number of school counselors providing counseling services at a campus, which is aimed at collecting data on counseling in order to better understand the role counselors play on a campus.

 


HPE_03-14-17On Tuesday, March 14, the House Public Education Committee heard a number of bills, as reported by ATPE Lobbyist Mark Wiggins in a blog post this week. ATPE weighed in on a number of the bills that included such subjects as curriculum standards, pre-kindergarten programs, and the school start date.

Next week, the committee’s Subcommittee on Educator Quality will meet Monday, March 20, to consider bills pertaining to educator misconduct, certification, and the importance of high-quality mentoring for new teachers. The full committee’s hearing on Tuesday, March 21, will cover two dozen bills, including a number of measures aimed at changing the state’s accountability system. The highest profile bill on that list is House Bill (HB) 22 by the committee’s chairman, Rep. Dan Huberty (R-Kingwood) to modify the controversial “A through F” accountability grading system. The committee also plans to resume its discussion of the chairman’s school finance reform bill, HB 21.

 


cutting budget with scissor on wooden backgroundAlso this week, Congress got its first formal look at President Trump’s proposal for the next federal budget. As expected, the 2018 budget proposal includes significant cuts to education funding as a whole and significant increases to initiatives preferred by the president. Trump’s plan includes an overall $9 billion in cuts to the U.S. Department of Education while a total of $1.4 billion would be added to fund charter school expansion, Title I funding portability, and likely vouchers. Read more about President Trump’s budget proposal as well as the latest developments involving the Every Student Succeeds Act (ESSA) in ATPE Lobbyist Kate Kuhlmann’s most recent federal update blog post.

 


As the both chambers of the 85th Legislature continue to work on their respective budget proposals, the full Senate Finance committee met this week to adopt the suggestions of its subject area work groups, including the Article III work group on public and higher education.

The full Senate Finance Committee cut an additional 276 million net dollars in programmatic and grant funding out of the Texas Education Agency (TEA) budget. Those cuts are in addition to programmatic cuts not related to the Foundation School Program (FSP) already found in the Senate’s base budget bill as filed. The largest cuts were a net cut of $140 million from non-formula pre-K funding, $104.6 million out of the Instructional Materials Allotment, and $47.5 million from the New Instructional Facilities Allotment. The cuts to all other programs in TEA’s budget totaled approximately $37 million and included things like substantial cuts to the Math and Reading Academies.

The Senate did add dollars to some TEA programs above its introduced budget. The additions totaled approximately $50 million and included items like $25.2 million for the E-rate program that will draw down a $250 million federal match to provide broadband to school districts currently lacking it; $391,000 on two additional investigators and one support staff member to address cases of inappropriate relationships between educators and students investigated by TEA; and $10 million restored to the Student Success Initiative, which had been zeroed out in the introduced budget.

While TEA program and grant funding took the largest cuts ($276 million) this week, TRS got the biggest boost, a net increase of $290 million over the Senate’s introduced bill after additions and cuts. The Senate added $316 million in funding for TRS-Care contingent on the passage of legislation that makes significant structural changes to the retiree healthcare plans.

Meanwhile, the House adopted very few changes to its version of the proposed public education budget this week, but did adopt one very important contingency rider. That rider would allow an additional $1.47 billion of General Revenue to be appropriated to the FSP; for the Basic Allotment to be increased from $5,140 to $5,350; and for implementation of a statutory FSP payment deferral in fiscal year 2019 which reduces the cost of the budget by $1.87 billion. The rider is contingent on the passage of school finance legislation such as Rep. Dan Huberty’s HB 21 plus a bill that would enact the FSP deferral. ATPE has advocated for such a deferral to help address budget deficits this session.

Gary G. Godsey

Gary G. Godsey

Related: Read a recently published op-ed by ATPE Executive Director Gary Godsey, in which he urges lawmakers to consider using the state’s rainy day fund to address imminent education funding needs.

Also check out this Spectrum News story in which ATPE Lobbyist Monty Exter is interviewed about the Senate’s proposed pre-K cuts.

 


In other news this week:

The Texas Senate passed another of Lt. Gov. Dan Patrick’s legislative priorities through Senate Bill (SB) 6. The controversial bill by Sen. Lois Kolkhorst (R-Brenham) to regulate bathroom usage policies of school districts and other governmental entities was approved by a vote of 21-10, despite considerable public opposition to the measure.

Among the flurry of new bills filed just before last Friday’s deadline for lawmakers to submit new legislation were two TRS-related bills that have caused a minor stir on social media. Sen. Paul Bettencourt’s (R-Houston) SB 1750 and SB 1751 revive the concept of converting the TRS defined-benefit pension plan in the future to a defined contribution program, more like a 401(k) plan, or a hybrid of the two. The first bill calls only for an interim study of the idea, while the second bill would authorize TRS and ERS (the agency overseeing a similar pension plan for state employees) to create such a program as an alternative for new employees. At this point, there are no indications that SB 1751 will gain traction this session when lawmakers are much more focused on the funding challenges associated with the TRS healthcare programs. ATPE Lobbyist Monty Exter was interviewed about the bill this week by Spectrum News.

Donna Bahorich

Donna Bahorich

The Senate also voted unanimously this week to confirm Donna Bahorich’s continuation as chair of the State Board of Education (SBOE). Bahorich was first elected to the SBOE in 2012, and she has held the role of board chair, a gubernatorial appointment, since 2015. Commissioner of Education Mike Morath was also confirmed.

 


Are you following ATPE’s Governmental Relations team on Twitter?

 

House committee hears from ATPE, others on education funding challenges

Dollar fanThe House Appropriations committee began meetings this week for its subcommittees assigned to work on various parts of the Texas state budget. This includes the Article III Subcommittee, which covers education funding and began taking testimony on Monday, Feb. 20. The subcommittee’s first day agenda involved looking at funding for the Texas Education Agency (TEA), including the Foundation School Program; the Teacher Retirement System (TRS), including both pension and health insurance funds; the state schools for the visually impaired and the deaf, the Windham School District; and community and junior colleges.

After the Legislative Budget Board (LBB) laid out the budget documents on TEA and the Foundation School Program, the committee heard from Texas Commissioner of Education Mike Morath. Commissioner Morath began by thanking the committee and restating his dedication to the goal of improving student outcomes for all students. The commissioner then laid out his agency’s priorities beginning with ensuring and improving teacher quality as the “most important in-school factor” in a student’s education outcomes. Next, Morath addressed the agency’s second key priority to promote a strong foundation in reading and math, and spoke about the affect of achieving this goal on closing the achievement grant. To facilitate this goal, the commissioner talked about continuing to push for expanding high quality pre-K. He also promoted TEA’s goal to scale the math innovation zones program statewide. The agency’s third priority is to connect K-12 education to higher education and career opportunities. The next priority is to improve struggling schools, Morath explained. He reported that TEA is working to do this through systemic system-wide improvements. In addition to budget items tied to the agency’s larger priorities, Morath also addressed specific targeted budget requests like funding the E-rate match to complete the build-out of statewide broadband access.

Early Childhood EducationThe Commissioner was well received by the subcommittee. The majority of questions to the commissioner from committee members tended to focus on supporting pre-K. In responding to an offshoot of this questioning, the commissioner indicated that the State Board for Educator Certification will likely institute a new certificate for grades EC-3 that would be more focused on early childhood education.

Later in the hearing, the committee heard from TRS Executive Director Brian Guthrie. Guthrie gave brief remarks about the overall performance of the TRS trust fund before turning to the more pressing issue of the billion dollar shortfall in the TRS-Care fund. He impressed upon the committee that TRS has done everything it can do internally to control costs without legislative action. On TRS-Care the plan laid out to the House budget committee would include a “shared pain” approach where the state would cover half of the cost of the shortfall, retirees would cover 25 percent of the costs, and districts and active teachers would each cover 12.5 percent of the cost. While this plan is more generous than what has already been laid out in the Senate, it still puts additional pressure on active teachers, many of whom are drowning in the cost of their own health insurance premiums. Additionally, the strategy laid out did not contemplate changing the state paid formula for TRS-Care, which is currently set at 1 percent of payroll for all school districts statewide. The TRS board of directors is also meeting this week.

After hearing from LBB and invited witnesses, the Article III subcommittee took public testimony, including testimony from ATPE. Our testimony focused on the need to address active teacher health care costs through additional state funding, not just a denigration of benefits; the benefits of closing the education gap early in a student’s career thorough pre-K; and finally the need to address equity through more appropriately funding students based on their needs, individually and at the campus level.

Senate Bill 1: The budget’s starting point

Background with money american hundred dollar billsThe Senate Finance Committee this week began a string of meetings to flesh out plans for a Texas state budget for the next two years. Following an organizational meeting on Monday, the committee began hearing testimony Tuesday on Article III of the budget, which includes public education. Both in her written statement and over and over again in comments during Monday’s and Tuesday’s hearings, committee chairwoman Sen. Jane Nelson (R-Flower Mound) called Senate Bill (SB) 1 a “starting point” from which the senators on the finance committee, and eventually the entire Senate, can work to produce the Senate’s eventual budget proposal.

So where did Chairwoman Nelson and her colleagues start?

On Monday, Nelson began by laying out a budget that spends roughly $3 billion less in general revenue than its predecessor over the last biennium (House Bill 1 of 2015) and $4-6 billion less than would be needed to maintain the level of services funded during the current biennium considering inflation and population growth. She also started lowering expectations by laying out a budget proposal that spends about a billion dollars less than the revenue the state is projected to bring in, according to the comptroller.

While the numbers were not promising, the chairwoman also started the process by announcing two work groups that would be tasked with proposing solutions for two of the state’s most pressing budgetary and policy trouble areas, school finance and the out-of-control cost of health care. The two areas of the budget that these issues impact account for more than 85 percent of the state’s discretionary budget.

On Tuesday, the actual work of going through the budget one agency at a time began. First up; Texas Education Agency (TEA), which includes the $42 billion Foundation School Program (FSP), followed by the Teacher’s Retirement System (TRS), and Texas’s schools for the visually impaired and the deaf.

Several members of the committee spent the majority of Tuesday morning trying to prove, while convincing no one, several points: (1) That the state is not under-funding education; (2) thet neither local property taxes nor recapture dollars have been spent outside of the education budget; and (3) that high property taxes and the disparity between significant increases in local revenue dedicated to education versus much smaller increases in state revenue going to education should be blamed on local tax assessors and school boards, not the legislature. The committee also heard from TEA staff about spending on the various projects administered by the agency outside the Foundation School Program. Many of these standalone programs are funded at levels below the current biennium, and several have been zeroed out completely in the base budget.

Tuesday afternoon, the committee heard from the Commissioner of Education and from executive directors of TRS, the Texas School for the Visually Impaired, and the Texas School for the Deaf. Each presented their exceptional items, budget requests above and beyond the agencies’ base budget needs. Brian Guthrie, the executive director of TRS, had the most challenging reception from the senators, several of whom would like to abandon Texas’s defined benefit pension system and replace it with a defined contribution 401(k)-style system that would both reduce state liability and result in increased profits for wealthy campaign donors. Ultimately, Sen. Joan Huffman (R-Houston) redirected questioning away from the TRS pension trust fund, which is in reasonably good health, and toward the separate TRS-Care health insurance fund, which over the years has become unsustainable in its current form and will run out of money in the upcoming biennium without significant structural changes and increased funding.

After the committee concluded the testimony from the state agency heads, they heard public testimony, including from ATPE. In addition to a general plea for prioritizing education spending, we requested the committee’s consideration in three specific areas. First, we asked that the senate approve TEA’s full funding request of $236 million for the high quality pre-kindergarten grant created last session, for which the current draft of SB 1 provides only $150 million. Second, we asked that the legislature increase state funding for health insurance for active educators. The state has not increased its share of funding for TRS-ActiveCare since that program began in 2001, and funding that was once in line with what private employers provide is now far less than the private market and woefully inadequate. Finally, ATPE echoed much of the rest of the education community in requesting that additional school property tax revenue collected due to increased property values be used to increase the education budget instead of being used to replace state dollars that legislators want to spend elsewhere – in other words, the concepts of “supplement not supplant” and property tax transparency.

If this was the Senate’s starting point, what are the next steps?

Today, Jan. 27, the work group tasked with reimagining the school finance system will meet for the first of what will likely be several times. It is a joint meeting with the Senate Education Committee, chaired by Sen. Larry Taylor (R-Friendswood). They will be taking invited testimony from several stakeholder and school finance experts. At some point in the coming weeks, the Article III (education) subcommittee will also meet and begin to negotiate potential changes from the base budget. The work of these two groups will eventually inform both the budget and a separate school finance bill that would then have to be negotiated with the House, before a final budget and possibly and school finance bill finally makes its way to the governor’s desk.

Stay tuned to Teach the Vote and atpe.org/advocacy for updates as the budget-writing process continues.

Education investment: The key to real tax relief

Mortgage calculator. House, noney and document.If there’s one thing most Texans can agree on, it’s that property taxes are too dang high.

What gets dicey is trying to sort through the myriad schemes put forth in the last few years by state lawmakers trying to cut local taxes over which they have little direct control. They’ve proposed tweaks to the rollback rate, increased the homestead exemption, and filed bills targeting local appraisal districts. That’s a lot of work by a lot of smart people you’ve sent to Austin with your tax dollars.

So.

Does your tax bill look any better?

In 2013, the Lincoln Institute of Land Policy ranked Texas as having the 15th highest per capita property tax in the country. Despite our high property taxes, Texas ranks 45th in overall K-12 education spending and 49th in adjusted per-pupil expenditures, according to our performance on the “Quality Counts” state report card from Education Week.

Why is that?

Speaking to a joint hearing of the House Public Education and Appropriations Committees in September 2016, outgoing Appropriations Chairman John Otto (R-Dayton), put it simply. “The burden is shifting to the locals,” he said.

According to the Legislative Budget Board, local school spending, as approved by local voters and their elected school boards, increased 34 percent from 2008 to 2015. During the same period, the amount the state spent on local schools increased by just 4.8 percent.

The school finance relationship is like a see-saw, with state funds on one side and local tax dollars on the other. When state spending goes down, local school districts have to raise taxes in order to fund services at the same level. This year, the state will pay 38 percent of the cost to fund schools, while the burden that falls to local property owners will be 52 percent.

Under the state’s recapture rules for maintaining equity in our school finance system, those local taxes you pay are also tied to school districts all over the state. That means in cities with high property values such as Austin and now Houston, a significant chunk of local property tax revenue must be shipped out of town to help fulfill the state’s obligation to maintain funding equity in other districts.

The total amount of transfers under recapture – commonly referred to by some as “Robin Hood” – has grown to $2 billion, with Austin ISD accounting for $583 million of recaptured funds in 2016. The math works out to 28 percent of statewide recapture falling on the shoulders of local taxpayers in Austin alone.

This week, the House and Senate each submitted their proposals for the 2018-19 state budget, and financial wonks are still crunching the numbers to determine whether either plan would effectively fund school services at current levels. Both claim to do so.

What we do know is that in the House plan, Speaker Joe Straus (R-San Antonio) has proposed an additional $1.5 billion boost in education funding “contingent upon the passage of legislation that reduces recapture and improves equity in the school finance system.”

If legislators are serious about reducing local property taxes, this is where it starts. It’s simple math.

Back to the see-saw: The only way to achieve meaningful property tax relief is for the state to assume more responsibility for the share of school funding it has passed on to you through local property taxes. Any other proposals you hear – and you will hear plenty – are empty measures meant to delay your outrage over your property tax bill for another two years.

In a December 2016 column, The Texas Tribune’s executive editor Ross Ramsey concluded, “Had the state kept its share of school funding constant for the past 10 years, voters might not be griping about rising property taxes.”

Tired of griping? Then let’s get serious. By boosting state investment along with taking a real shot at reforming the school finance system, the House is on the right track. We’ll find out if the rest of the legislature is serious as well.

Both chambers release versions of proposed Texas budget

Lt. Gov. Dan Patrick confirmed yesterday that Senator Jane Nelson (R – Flower Mound) will continue to serve as the chair of the Senate Finance Committee for the 85th legislative session. Upon her reappointment, Sen. Nelson filed the Senate’s budget bill, Senate Bill 1.  SB 1 spends $103.6 billion in state revenue over the next two years, which is $1.3 billion less than the Comptroller’s 2018 and 2019 revenue projection.

The Senate issued a press release highlighting the fact that the budget includes “$2.65 billion to cover enrollment growth in public schools and $32 million more for high-quality pre-k programs.” This is $86 million less than the additional $118 million that would be needed to extend current pre-k funding to cover both years of the upcoming biennium.

Girl showing bank notesAs filed, SB 1 represents a continuation of current school funding formulas. However, according to the Senate press release, Nelson calls  “making sure the school finance system better meets the needs of students” a critical decision to be made by lawmakers this session.

Other specific items outlined in the budget per the SB 1 press release include:

  • $1 billion to address state hospital and mental health facility needs;
  • $63 million to clear the waitlist for community mental health services;
  • $20 million for a program to help veterans dealing with PTSD or other mental health issues;
  • $260 million to improve Child Protective Services;
  • $25 million for high caliber bulletproof vests for Texas law enforcement officers;
  • $800 million for border security measures approved last session; and
  • A 1.5 percent across-the-board spending reduction for all expenditures not related to public education.

The Senate press release on SB 1 can be found here.

On the House side, Speaker Joe Straus has not yet named which representative will replace former Rep. John Otto (R – Dayton) as the new chairman of the House Appropriations Committee. Otto did not seek re-election in 2016. Still, the House did release its version of a plan for the base budget yesterday, too. The Speaker’s press release touts the House budget plan as one that “puts additional resources into public education, child protection and mental health while increasing state spending by less than 1 percent.”

The House budget proposal:

  • Funds enrollment growth of about 165,000 students over the next two years;
  • Includes an additional $1.5 billion for public education that is contingent upon the passage of legislation that reduces recapture and improves equity in the school finance system; and
  • Includes $108.9 billion in general revenue.

The Speaker’s press release can be found here.