School finance commission considers first round of recommendations

The Texas Commission on Public School Finance met Tuesday morning to discuss recommendations from the working group on outcomes, lead by Todd Williams. Commission Chair Scott Brister opened the meeting by requesting suggestions for how to pay for the various recommendations the commission has received.

Texas Commission on Public School Finance meeting July 10, 2018.

Texas Education Agency (TEA) Chief School Finance Officer Leo Lopez was the first invited witness, and provided an overview of how public education in Texas is funded. Currently, the state pays 36 percent of the total cost of funding schools. Excluding local recapture, the bulk of funding – 51 percent – is carried by local property taxes. Recapture, which is also local funding but was counted separately for the purposes of Lopez’s presentation on Tuesday, amounts for three percent of funding. The remainder comes from federal funding.

According to TEA’s numbers, state funding on a per-student basis has remained flat since 2008. When adjusted for inflation, this represents a decline in actual dollars. In the same time period, the biggest increase in funding has come from local property taxes. Legislative Budget Board (LBB) Assistant Director John McGeady explained that while the LBB and TEA use different calculations to determine state spending, both sets of data show the state’s share of funding has steadily declined over the past decade.

Williams introduced the same recommendations the working group approved last week, which include outcome-based incentives at the 3rd, 8th, and 12th grade levels. The 3rd grade reading gateway would be supplemented by increased funding for schools with high populations of economically disadvantaged and English learner students that could be used to provide full-day prekindergarten. The 8th grade incentives would target reading and Algebra I, and 12th grade would focus on indicators of post-secondary readiness.

The recommendations from the outcomes working group also include a performance pay system that would reward teachers who complete more rigorous educator preparation programs, provide higher pay for educators according to locally-developed, multi-metric performance evaluation programs, and incent administrators to direct the highest performing educators into campuses and grade levels with the greatest need.

State Sen. Paul Bettencourt (R-Houston), who has argued against increasing school funding, argued fiercely against objective data presented by Williams that indicate Texas will miss its “60×30” goal by two decades years. The goal is to ensure that 60 percent of Texas 25- to 34-year olds obtain a postsecondary degree or certificate by 2030. According to current rates of postsecondary attainment, the state will not reach this goal until 2051. Bettencourt argued businesses rely on net migration into the state, despite the fact that this necessarily reduces the number of high paying jobs available to students educated in Texas.

Williams told the members he would welcome feedback on the recommendations, and suggested more testimony could be taken, specifically from the Texas Higher Education Coordinating Board (THECB) regarding 60×30 progress. State Rep. Diego Bernal (D-San Antonio) suggested the working group could collect comments and produce a revised draft.

Williams estimated the cost of implementing the recommendations at $1 billion annually, or $2 billion per biennium. This would gradually increase to $2.5 billion annually over a ten-year period, as districts meet stretch goals and additional districts phase in the recommendations. This could ultimately save the state money by higher-paid workers contributing more state taxes, and fewer state resources would be needed for uninsured medical costs and incarceration. The expenditures working group is expected to meet August 9 to work on recommendations. House Public Education Committee Chair Dan Huberty (R-Houston), who leads the expenditures working group, said more than 200 recommendations have been received. The full commission does not plan to meet until September.

Brister said the commission will not hold a vote until the total cost of recommendations can be calculated and until the commission can determine from where the money to pay for them will come.

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