Tag Archives: budget

Teach the Vote’s Week in Review: Jan. 18, 2019

Here’s your weekly wrap-up of education news from ATPE Governmental Relations:


Both the Texas House and Senate released their preliminary budget proposals for the 2020-21 biennium this week. A key feature of each chamber’s plan was how much more funding had been proposed for public education, likely resulting from the uptick in educator engagement at the polls last year and in policy discussions over the interim.

The House proposal for public education funding includes a 17.2 percent increase from general revenue, while the Senate’s proposal would increase funding from general revenue by 10.3 percent. The Senate Finance Committee has already released a full schedule of upcoming budget hearings, including one on Feb. 11 to discuss the public education portion of the budget. Expect similar hearings to be scheduled in the House once Speaker Dennis Bonnen releases a list of House committee assignments, likely later this month.

On Tuesday, Sen. Jane Nelson (R-Flower Mound) filed Senate Bill 3 (SB 3) relating to additional funding to school districts for classroom teacher salaries. The low bill number indicates that this is a high priority bill in the upper chamber. In short, both the House and Senate are trying to signal to the public that they’ve received the message loud and clear from voters: it’s time to properly fund public education. But don’t count your chickens before they hatch, as it’s important to remember that a filed bill does not a law make.

Now is the time for educators and community members to continue to press their point so that House and Senate budget negotiations will proceed with a sharp focus on the needs of Texas public schools. To keep abreast of what’s happening at the legislature on the budget, teacher pay bills, and other pieces of legislation, and to contact your legislators directly, visit our Advocacy Central page for ATPE members only.

For more on the House and Senate budget proposals that have been filed, read this week’s blog post by ATPE Lobbyist Mark Wiggins. Also, check out last night’s episode of the Spectrum News program Capital Tonight featuring an interview with ATPE Senior Lobbyist Monty Exter discussing the proposals to increase public education funding this session.


The League of Women Voters (LWV) has created a survey designed to capture information about how Texas voters find information on voting and elections. LWV encourages users who take the 10-20 minute survey to think of it as a “scavenger hunt” where after being asked a few questions users will set out to hunt down information on the Texas Secretary of State’s website. More information about the scavenger hunt can be found here.


 Earlier today, Lt. Gov. Dan Patrick announced who would be chairing each of 16 Senate committees this session. Sen. Larry Taylor (R-Friendship) will remain the chair of the Senate Education committee. Meanwhile, Sen. Joan Huffman (R-Houston) will be chair of the Senate State Affairs committee while Sen. Paul Bettencourt (R-Harris County) will chair the new Senate Property Tax Committee.

For a full list of all Senate committee members and chairs, read this blog post from earlier today.


Online registration for ATPE at the Capitol will close Thursday, Jan. 24, and ATPE members won’t want to miss this opportunity to get up close and personal to the action at this year’s legislative session. Funding for public education along with calls for increased educator compensation have emerged as issues at the forefront of this session. Now more than ever we need educators to visit the legislature and advocate for their profession. ATPE at the Capitol will be held on Feb. 24-25, with political involvement training taking place on Sunday, Feb. 24, and visits with House and Senate members happening on Feb. 25.

There is no registration fee for ATPE members to attend ATPE at the Capitol, and ATPE also has funds available to assist some local units and individual members defray their travel costs for attending the event. Incentive funds will be awarded on a first-come, first-served basis upon a showing of demonstrated need and subject to certain eligibility criteria. The deadline to apply for travel incentives is also Jan. 24, 2019. Hotel rooms at the J.W. Marriott hotel, where the event will be held, are available for booking using the special link found on the event’s registration page. Hotel reservations must also be booked by Thursday’s deadline in order to take advantage of special discounted room rates.

We hope to see many ATPE members alongside our professional lobby team next month during ATPE at the Capitol!

 


 

Early budget proposals include boosts for educators, classrooms

The Texas House of Representatives and Texas Senate released their initial budget recommendations this week, and each includes significant additional funding for public education.

The proposals drafted by the Legislative Budget Board (LBB) represent each chamber’s opening bid in budget negotiations for the 2020-21 fiscal biennium. The budget is the only bill the legislature is constitutionally required to pass within its 140-day session. If it fails to do so, lawmakers will be called back into one or more special sessions until a budget is passed.

The 2020-21 House budget proposal includes $7.1 billion in additional general revenue funds appropriated for public education, which represents a 17.2 percent increase over the 2018-2019 biennium. Looking at all funds, public education would see a $10.1 billion, 16.7 percent increase, under the House’s proposal.

The base budget is structured around sufficient funding to maintain services at the current level, and the additional funding comes from a single budget rider that appropriates an additional $9 billion contingent upon the 86th Texas Legislature enacting legislation to increase the state’s share of Foundation School Program (FSP) funding, enhancing district entitlement, reducing recapture, and providing local property tax relief.

Details of the House proposal are spelled out under Rider 77 (page 301 of the House budget):

77. Additional Foundation School Program Funds for Increasing the State Share, Enhancing School District Entitlement, Reducing Recapture, and Providing Tax Relief. It is the intent of the Eighty-Sixth Legislature to adopt comprehensive school finance legislation and provide local property tax relief. In addition to amounts appropriated above in Strategy A.1.1., FSP – Equalized Operations, and Strategy A.1.2., FSP – Equalized Facilities, $4.5 billion in fiscal year 2020 and $4.5 billion in fiscal year 2021 is appropriated out of the Foundation School Fund No. 193 to be used for the purposes specified in this rider.

The amounts appropriated in this rider are contingent on enactment of legislation supporting school districts and charter schools by increasing the state share of the Foundation School Program, enhancing district entitlement, reducing recapture, and providing local property tax relief, while maintaining an equitable system of school finance. Options may include, but are not limited to, increasing the Basic Allotment and providing additional funding for early childhood education, special education, and teacher compensation.

A portion of the amounts appropriated in this rider shall be used to provide local property tax relief. Funds shall be used to enable the compression of local maintenance and operations (M&O) property tax collections, pursuant to the provisions of the legislation, while ensuring school districts do not receive less total state and local funding through the FSP.

The $9.0 billion in Foundation School Fund No. 193 appropriated in this rider represents new state funding for school districts and charter schools above amounts estimated to fully fund current law. The $43.6 billion in current law appropriations provided above in Rider 3 includes the amount necessary to fully fund $2.4 billion in enrollment growth and $2.2 billion in additional state aid above 2018-19 funding levels associated with the increase under current law in the Guaranteed Yield associated with the Austin Independent School District in accordance with §41.002(a)(2) and §42.302(a-1)(1) of the Texas Education Code.

The Senate’s proposal would increase public education funding by $4.3 billion or 10.3 percent from general revenue, or $7 billion all funds — an 11.6 percent increase. This proposal includes an additional $3.7 billion to provide all teachers with a $5,000 raise effective at the start of the 2019-20 school year and $2.3 billion to reduce reliance on recapture. Senate Bill (SB) 3 filed Tuesday by state Sen. Jane Nelson (R-Flower Mound) would authorize the pay raise, if passed. Lower bill numbers are generally reserved each session for high-priority bills.

The governor, lieutenant governor, and speaker have each declared increasing teacher pay a high priority this session. Due to the publicity surrounding teacher pay, ATPE expects several teacher compensation bills to be filed this session. Our governmental relations team will be analyzing each one to determine how it is structured with regard to who is eligible and the extent to which it includes stable, reliable, and long-term state funding.

Providing additional money for teacher compensation and public education funding were the main topics in Tuesday’s Inauguration Day speeches at the Texas Capitol. Educators should note that this shift in focus among the state’s leaders is a direct result of educators’ increased involvement in the 2018 primary and general elections. Teachers, parents, and public education supporters sent a strong message that Texans demand better school funding and teacher pay. Even in instances where the pro-public education candidate was not elected, the strong showing by public school advocates successfully forced many elected officials to reexamine their stance on public education issues.

Make no mistake, we are only at this point because educators voted, rallied, and lobbied legislators like never before. Educators must keep a close eye on lawmakers over the next five months to ensure they follow through on their promises. ATPE will be bringing you regular updates on legislative proceedings, including changes to these early drafts of the budget and various compensation bills, and educators should remain vigilant and ready to make your voices heard at a moment’s notice. Visit ATPE’s Advocacy Central to learn more and share your own views on school funding and educator compensation with your own elected officials.

Teach the Vote’s Week in Review: Jan. 11, 2019

Happy New Year! Here’s your first weekly wrap-up of education news from the ATPE Governmental Relations team:


Tuesday, January 8, kicked off the 86th Texas Legislative Session amid great fanfare at the State Capitol.

Representative Dennis Bonnen (R-Angleton) was unanimously elected and sworn in as the new Speaker of the House on Tuesday afternoon. For the past 10 years, the House has been under the leadership of Rep. Joe Straus (R-San Antonio) who retired from the position and the legislature at the end of his term this month. Bonnen announced in November 2018 that he had amassed the requisite number of pledged votes to render the speaker’s race not much of a race at all. After that there was only the vote and ceremonial swearing in, which took place on Tuesday. Read more about Bonnen’s ascent to speaker in this post shared from The Texas Tribune.

On the Senate side, Lt. Gov. Dan Patrick (R) was missing from Tuesday’s proceedings while visiting with President Donald Trump in Washington, DC, that day on the subject of border security. Sen. Jane Nelson (R-Flower Mound) presided over the upper chamber’s opening ceremonies in his place. The Senate swore in its new members and also elected Sen. Kirk Watson (D-Austin) to serve as President Pro Tempore this session.

Gov. Greg Abbott spoke briefly to welcome the members of each chamber, signaling his intent for the legislature to tackle school finance reform and property tax relief this session. Bonnen and Watson also highlighted the prominence of the school funding issue this session, with new House Speaker going as far as announcing that he had stocked the members’ lounge with special styrofoam cups to remind them of their top priority: school finance reform. Improving the state’s school finance system is also a top legislative priority for ATPE this year.

ATPE Lobbyists Mark Wiggins and Monty Exter snapped a selfie with Humble ATPE’s Gayle Sampley and her husband at the Capitol on opening day.

ATPE’s lobbyists were at the Capitol on opening day and will be there for all of the action this legislative session. Be sure to follow @TeachtheVote and our individual lobbyists on Twitter for the latest updates from the Capitol.

ATPE members are also encouraged to sign up for free to attend our upcoming lobby day and political involvement training event known as ATPE at the Capitol on Feb. 24-25, 2019. Find complete details here.

 


While the legislative session officially began on Tuesday, Texas Comptroller Glenn Hegar made news the day before with his release of the state’s Biennial Revenue Estimate (BRE). The BRE details how much money the state plans to receive and how much of it can be spent in any given legislative session.

Monday’s BRE announcement predicted revenue of $119.12 billion for the 2020-21 biennium. This biennium’s BRE comes with tempered expectations, which Hegar attributed to a drop in oil prices, market volatility, and rising interest rates. “Looking ahead to the 2020-21 biennium, we remain cautiously optimistic but recognize we are unlikely to see continued revenue growth at the unusually strong rates we have seen in recent months.” Hegar said in the report.

Once the comptroller has released the BRE for each legislature, the Legislative Budget Board (LBB) meets to set the session’s constitutionally-required spending limit. ATPE Senior Lobbyist Monty Exter reports that the LBB met today and set a limit of $100.2 billion for spending this session. The constitutional spending limit is set by applying the percentage of growth, which is determined by many factors, to the previous biennium’s spending limit. The constitutional limit applies only to expenditures of general revenue that is not constitutionally-dedicated. By comparison, the non-dedicated-revenue spending limit for the 85th session in 2017 was roughly $91 billion, whereas the total general revenue appropriated by the legislature that year was $106.6 Billion. As Exter explains, neither withdrawals from the Economic Stabilization Fund (the state’s so-called “Rainy Day Fund”) nor supplemental appropriations for the current biennium will count toward the constitutional limit that was announced today.

The Legislature must now decide what to do with its available revenue. Rest assured, they haven’t been given a blank check to do as they please. According to reporting by the Center For Public Policy Priorities the legislature must immediately spend $563 million as back pay for Medicaid funding that was deferred until this session. The legislature will also have to determine where $2.7 billion for Hurricane Harvey recovery costs will come from.

For more detailed reporting on the BRE as well as link to the full report, check out this blog post by ATPE Lobbyist Mark Wiggins.

 


Late last week, the House Committee on Public Education released its interim report covering the committee’s work over the past year on interim charges assigned to it by the House Speaker. The report, which spans 88 pages, includes recommendations on how to approach a variety of education-related issues this session, such as Hurricane Harvey relief, teacher compensation, and school safety.

Rep. Dan Huberty (R-Kingwood) chairs the committee that produced its interim report. Among the suggestions were recommendations to consider possible legislation to help schools quickly replace instructional materials due to Harvey; creating paths to career growth for educators that would allow them to stay in the classroom, such as a “Master Teacher” certification; and making Individual Graduation Committees (IGCs) permanently available for students who have difficulty with STAAR testing.

You can read more about the committee’s interim charge recommendations in this blog post by ATPE Lobbyist Mark Wiggins. Read the interim report here.

 


In a statement released to the press on Monday, Governor Greg Abbott announced his appointment of Edward Hill, Jr., Ed.D., John P. Kelly, Ph.D., Courtney Boswell MacDonald, and Jose M. Rodriguez to the State Board for Educator Certification (SBEC). The new appointees are replacing retiring SBEC members Suzanne McCall of Lubbock; Dr. Susan Hull of Grand Prairie; and Leon Leal of Grapevine.

ATPE thanks the members rolling off the SBEC board for their years of service and welcomes the new members. We look forward to working together with them to continue to improve the education profession for the betterment of Texas students.

 


Comptroller announces $119.12B available for legislators to spend

Texas Comptroller Glenn Hegar announced Monday that the 86th Texas Legislature is forecast to have $119.12 billion available for general-purpose spending when the regular session begins tomorrow, Jan. 8, 2019.

Click the image to view a larger version. Credit: Office of Texas Comptroller Glenn Hegar

The announcement came today as part of the comptroller’s biennial revenue estimate, which is delivered to legislators before each session begins and consists of a forecast of how much revenue the state expects to receive and how much of it can be spent.

The state is projected to take in $107.32 billion in general revenue-related tax collections in the 2020-2021 fiscal biennium, which is up from $99.27 billion collected in 2018-2019. The next biennium begins with a balance of $4.18 billion carried over from 2018-2019, along with $14.16 billion in additional general revenue-related collections. A total of $6.34 billion of available revenue is reserved for transfers to the economic stabilization fund (ESF), also known more commonly as the state’s “rainy day fund,” as well as highway funds.

Legislators began 2017 with a $104.9 billion BRE, and the 85th Texas Legislature ultimately passed a $107.2 billion budget. The 2018-2019 revenue estimate was revised upward several times as economic conditions improved. In the 2020-2021 revenue estimate, Hegar noted increased economic growth in 2018 fueled by oil production in the Permian Basin, but urged caution looking beyond the 2019 horizon.

“Looking ahead to the 2020-21 biennium, we remain cautiously optimistic but recognize we are unlikely to see continued revenue growth at the unusually strong rates we have seen in recent months,” Hegar wrote in the official report. “Oil prices have dropped sharply since October, financial markets have demonstrated increased volatility, interest rates have been rising and U.S. trade policy remains uncertain. As the nation’s leading export state, the Texas economy in particular is exposed to potential reductions in international trade.”

“Because of this heightened uncertainty, this revenue estimate is based on a projection of continued but slowing expansion of the Texas economy,” Hegar concluded.

Much of the $119.12 billion legislators will be have for budgeting the next two years is already spoken for. The Center for Public Policy Priorities (CPPP) correctly points out in its BRE analysis that legislators will have to immediately make a $563 million back payment to Medicaid, funding that was deferred last session in order to fund public education.

CPPP predicts it will cost roughly $112 million for the state to maintain the current level of services, based upon factors including inflation and school enrollment growth. Legislators will also have to decide where to find $2.7 billion of supplemental funding for Hurricane Harvey recovery costs. That could come out of general revenue or the rainy day fund.

You can read the comptroller’s full report here.

School finance commission approves final recommendations

The Texas Commission on Public School Finance met Wednesday for the final time to unanimously approve the final recommendations and findings to be included in the commission’s final report due to the Texas Legislature by December 31.

School finance commission meeting December 19, 2018.

The commission was created by House Bill (HB) 21 during the special session of the 85th Texas Legislature in August of 2017 after school finance reforms and additional funding proposed by the House were rejected by the Senate. The commission was charged with examining the school finance system and recommending potential reforms.

Members were appointed in the fall of 2017, but the commission did not meet until January 2018. Members heard roughly 80 hours of testimony from more than 150 witnesses, including ATPE. Progress on the final report had been stalled awaiting the product of a working group on revenues led by state Sen. Paul Bettencourt (R-Houston).

The final report contains 34 separate recommendations, which members spent hours wordsmithing Wednesday. Chair Scott Brister, who was appointed by Gov. Greg Abbott, resisted wording that would have called for “adequate” school funding or described current funding levels as “inadequate.” The chair’s suggestions centered on insulating the state against any potential for future school finance litigation, while other members of the commission argued for more explicit and specific funding increases.

Changes to the final draft considered on Wednesday included a new section containing significant and previously undiscussed suggestions for the construction of local teacher evaluation systems for implementing the differentiated pay program proposed by the commission. The suggestions outline the required components of district plans, which include student achievement as determined by test scores, administrator observations, and student perception surveys. Furthermore, the suggestions included minimum percentages for each category, requiring test scores to account for a minimum of 25 percent of an educator’s overall evaluation rating.

ATPE successfully lobbied for the commission to remove the percentages from its final report in order to avoid starting the legislative conversation with artificially predetermined weights for each of the recommended components. Despite the language in the report labeling these components as mandatory, they will in actuality serve as the starting point for bills that will be drafted and debated when the 86th Texas Legislature convenes in January. The same goes for all of the recommendations contained within the commission’s report.

The full report is titled “Funding for Impact: Equitable Funding for Students Who Need It the Most” and can be found here. ATPE responded to the final report with a press statement, which recommends the following additional considerations in light of the report:

1. Current public education funding levels are inadequate to meet the state’s education goals
and the needs of our 5.4 million students enrolled in public schools in pre-kindergarten
through 12th grade. Texas remains among the bottom one-third of states in per-student funding
despite educating a disproportionate level of students who are economically disadvantaged
and/or English language learners, both of which require significantly more resources to educate.
There can be no real school finance reform that fails to address adequacy. ATPE is
disheartened that some members on the commission were unwilling to acknowledge the reality of
the limitations of our state’s current funding levels out of fears of sparking litigation.

2. ATPE rejects the implication that school districts do not efficiently allocate the money they
receive under the state’s current funding system. In 2015-16, school administration counted
for little more than three percent of district expenditures, while instruction and direct student
supports combined accounted for more than 70 percent. The state’s share of public education
funding also has fallen dramatically. A decade ago, there was a roughly even split between state
funding and local taxpayers; in 2021, it is projected that state funding will be as low as 32
percent.

3. Texas teachers should be paid a salary that acknowledges their excellence in the classroom and
contributes to statewide efforts at recruitment and retention of outstanding educators. Focusing
on initiatives that would provide a premium salary only for “top teachers,” as the commission has
suggested, would address compensation concerns only for an estimated two to five percent of
our state’s teachers. A large percentage of the remaining educators serving our state’s students
are doing so effectively and deserve additional compensation. In order to achieve the stated goal
of providing all Texas students with an effective teacher, ATPE recommends that the
legislature set a statewide goal of paying all effective teachers a salary that is suitably
competitive and commensurate with the work they are doing—in addition to rewarding the
top teachers in the field.

4. The commission has recommended an educator effectiveness allotment to help school districts
boost salaries of their most effective teachers with state funding that would commence in the
2019-20 school year. However, the final report also suggests new and prescriptive criteria that
school districts would be forced to meet in order to receive the allotment, which would amount to
a major restructuring of teacher evaluation systems without appropriate vetting or study.
Considering the years of research and piloting that have gone into previous design changes to
teacher evaluations in Texas, ATPE strongly cautions legislators against mandating any
rapid, wholesale changes to teacher evaluation laws based solely upon a four-page
excerpt in this school finance commission report that did not receive adequate vetting by
commissioners or stakeholders prior to its adoption.

“ATPE appreciates the long hours devoted by commission members to researching the complexities of school finance and listening to the many concerns by our association and other stakeholders,” said ATPE Executive Director Shannon Holmes.

In particular, ATPE members have expressed gratitude for those who stood up for Texas students during the commission’s deliberations by arguing for the inclusion of additional public education funding. State support for public education has been inadequate to fully overcome the growing list of challenges that Texas schools face. How to address these challenges became a key issue during the 2018 election cycle.

“Texas voters have sent a strong message,” said Holmes. “The state must do a better job funding our
schools, and Texans will no longer accept excuses for failing to act.”

ATPE looks forward to forging real solutions on school finance when the 86th Texas Legislature
convenes in 2019. The association pledges to continue working with legislators to implement policies that will benefit all 5.4 million Texas schoolchildren.

School finance commission discusses initial recommendations

School finance commission meeting Dec. 11, 2018.

The Texas Commission on Public School Finance met Tuesday in Austin to discuss recommendations for the commission’s report, which is due to the legislature by the end of the month. The initial draft recommendations can be viewed here, and additional resources can be found here.

The draft report includes a recommendation that the 86th Texas Legislature “inject significant additional annual state revenue” through new strategic allotments and weights outlined in the commission’s report, including about $1.7 billion in specific areas. The report adds that for the purposes of new funding, members should note that an increase of $500 million in state funding is equal to a roughly 0.9 percent increase over the last budget biennium. This would be formula funding, targeted at the neediest studies, and tied to specific outcomes.

Commission Chair Scott Brister voiced reservations, suggesting that asking the legislature for significant additional funding is not the commission’s job. He later clarified that his chief opposition was to placing a dollar figure on additional funding. Several members pushed back, including House Public Education Committee Chair Dan Huberty (R-Houston), who said he would not sign a report that does not call for additional school funding.

The report also calls for reallocating $5.34 billion in existing funds to more impactful spending and greater system-wide equity. The commission recommends significant investment to substantially increase third grade reading levels. Outcomes-based funding would be targeted toward early literacy and post-secondary access of career, military, or higher education without remediation.

The commission is recommending a high-quality teacher allotment, initially funded at $200 million, for districts wishing to offer differentiated compensation to pay their most effective educators higher salaries sooner in their career. This would be contingent on districts creating locally-developed, multi-measure evaluation and compensation systems based on an outline created by the legislature. This includes the state setting a goal that top teachers have a path to a $100,000 salary and incentivizing districts to assign top teachers to the most challenging campuses.

Finally, the draft report calls for statutorily increasing the basic allotment, though it does not specify a specific amount. It calls for increasing the yield on “copper pennies” and compressing the rate in order to provide tax relief, as well as reducing the role of recapture in the school finance system. The report makes no recommendations regarding special education, instead suggesting that the current corrective action plan approved by the U.S. Department of Education should be completed before any additional reforms are discussed.

Discussing the commission’s major findings, Brister acknowledged that schools are being asked to do more than ever before. This includes higher security standards and providing for the physical and mental well-being of students in addition to educating them. He then asked to strike language from the report that says the state has failed to adequately fund public education.

After breaking for lunch, the commission returned for more in-depth discussion on individual recommendations. Commission member Todd Williams of the Commit Partnership in Dallas pointed out that the teacher compensation portion of the plan (Section D) does not include specific funding for strategic staffing such as that implemented by the Dallas ISD ACE program, which is intended to incentivize top teachers to teach at the highest-need campuses. Williams argued the evaluation system and strategic staffing system should be treated as separate and funded accordingly.

State Sen. Paul Bettencourt (R-Houston) then laid out the recommendations from the working group he chaired on revenues. The group’s primary recommendation is to adopt Gov. Greg Abbott’s plan to cap local property tax revenue growth. The plan suggests capping growth at 2.5 percent annually, and replacing revenue lost by school districts with state funding. The governor’s office does not specify how much this would cost or from where the replacement funding would come.

Texas Education Agency (TEA) Chief School Finance Officer Leo Lopez presented a chart addressing the three plans endorsed by Bettencourt’s group, which suggests that the governor’s plan would reduce local maintenance and operations (M&O) tax collections by nearly $1 billion and increase school district revenue by $300 million in 2020 at a cost of roughly $1.3 billion. By 2023, the governor’s plan is projected to reduce M&O tax collection by $3.7 billion while increasing school district revenues by $74 million. Lopez pointed out that this is primarily a tax relief plan, as opposed to a school finance plan, which explains why future funding is projected to flatten out.

The commission discussed the level of emphasis that should be placed upon the governor’s revenue cap plan. Members pointed out the interrelation of property taxes and school finance, as well as the need to focus on the commission’s statutory charge, which is to fix the school finance system. The governor’s plan alone would not change the fundamental mechanics of the school finance system.

Sen. Bettencourt has argued that the state’s coffers will be flush heading into the next budget cycle based on tax revenue from booming oil and gas production, but the state comptroller has yet to release a formal biennial revenue estimate (BRE) with hard numbers upon which to base a budget. State Rep. Ken King (R-Canadian), who represents oil and gas-dependent west Texas, cautioned against relying on oil and gas as a reliable, long-term funding source. A combination of the governor’s plan and the commission’s recommendations for additional public education spending could add up to a price tag north of $5 billion for the upcoming budget biennium.

The commission is scheduled to meet next Wednesday, Dec. 19, 2018, to vote on final recommendations. The commission is required by law to submit its report to the legislature by December 31.

From The Texas Tribune: A tight-fisted Texas Legislature with expensive ambitions

Analysis: A tight-fisted Texas Legislature with expensive ambitions” was first published by The Texas Tribune, a nonprofit, nonpartisan media organization that informs Texans — and engages with them — about public policy, politics, government and statewide issues.

The Texas Legislature’s strong allergy to tax increases might be abating — just as long as you don’t call them tax increases.

They’re not saying so out loud — no point in riling up a price-sensitive electorate before the holidays, before the upcoming legislative session — or before lawmakers are ready to make their sales pitch.

But the talk of school finance as a top legislative priority guarantees a conversation about taxes. While there are many great policy reasons to mess with that persistent and gnarly issue, the political motivation here is simple: Texas property owners have made it clear to their representatives that they want lower property taxes.

When you do hear lawmakers talking about tax increases next year — whatever euphemisms they choose — they’ll be talking in terms of how that money will pay for property tax cuts. Cutting everyone’s current most-hated tax is the only way to explain so many conservative legislators making serious noises about increasing state revenue.

Given the way the state pays for public education — with a combination of local property taxes, and state and federal funding — the only ways to lower property taxes are to cut public education spending or to find money elsewhere to offset property tax cuts.

In the state’s 2019 fiscal year, the local share of school finance spending is estimated to be 55.5 percent of the total, while the state’s share is expected to be 35 percent, according to the Legislative Budget Board. The rest comes from the federal government.

The last time the Texas Legislature tackled school finance, the local and state shares matched. Years of rising property values – and rising local property tax revenue with them – have allowed the state to lower its share.

The price tag for a rebalancing would be enormous, though. And in spite of Democratic gains in last month’s elections, Texas still has a Republican-dominated state government, with GOP majorities in both the House and Senate, and Republicans in every statewide office. Many of them got where they are by opposing anything that sounded like higher taxes, which makes the road ahead pretty interesting.

If you do some quick arithmetic on those 2019 estimates, it would take a $5.7 billion increase in annual state spending to rebalance the state and local shares of public education spending. Doing that would put them both back where they were in 2008 — each covering about 45 percent of the load.

That’s easier to do on the back of an envelope than it is to do in the Legislature. The budget ahead is tight. House and Senate leaders have to pass what’s called a “supplemental appropriations bill” to take care of shortages in the current budget, Hurricane Harvey recovery costs, and so on. Early guesstimates are that they’ll start more than $5 billion short of what they need for the next budget — and that’s before they even bring up the expensive school finance project.

The governor already is circulating a document that dares to mention taxes in the title: “Improving Student Outcomes and Maintaining Affordability through Comprehensive Education and Tax Reforms.”

That gets right to the politics of the situation: State leaders are interested in easing property tax burdens, and school finance is the biggest lever in their toolkit. It’s also way out of balance and happens to need fixing. Lawmakers often blame the imbalance on school funding formulas. But they’re the authors of those dreaded formulas, and this is also a chance to put something better in place.

But it’s the tax problem — the price of owning property — that has made their price-sensitive voters potentially receptive to increases in other taxes. New money could come from eliminating exemptions, from property appraisal reforms, from raising existing tax rates or creating new taxes — any number of things. They’ll decide the details when they meet. They’ll figure out what to call it, too: It might be remarkable to see “tax” in the title of the governor’s presentation, but its neighboring word — “reform” — is the political touch.

They want to lower property taxes to make their voters happy, and to accomplish that expensive task without stirring up a new revolt from a different set of taxpayers.

At the end, someone in Texas has to pay for this stuff.

 

This article originally appeared in The Texas Tribune at https://www.texastribune.org/2018/12/03/tight-fisted-texas-legislature-school-finance-property-tax/.

 

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

Finance commission group finalizes recommendations

The Texas Commission on Public School Finance working group on revenue met Tuesday at the Texas Capitol to discuss recommendations to deliver to the full commission. State Sen. Paul Bettencourt (R-Houston), who leads the working group, indicated he is open to using the economic stabilization fund (ESF), which is commonly referred to as the “Rainy Day Fund,” to help fund public education.

School finance commission working group meeting November 27, 2018.

Bettencourt opened the meeting suggesting that state revenues are looking bullish heading into the next budget biennium. Again, Sen. Bettencourt emphasized his priority is phasing out the “Robin Hood” system of wealth equalization through recapture. According to Bettencourt, freezing recapture would cost approximately $2.3 billion.

Before Bettencourt began his presentation, commission member and Austin ISD Chief Financial Officer Nicole Conley Johnson told the group she had identified $14 billion in new programs to propose to the commission.

According to figures Bettencourt provided to the group, the state comptroller increased the revenue estimate for the next biennium to $110.2 billion in July 2018 from $104.9 billion in 2017, a $5.3 billion increase. During the first two months of fiscal year (FY) 2019, sales tax revenues, which represent 58 percent of all state tax collections, are expected to be up ten percent compared to FY 2018.

Bettencourt asserted two point upon which most agree: Without school finance reform, the state’s share of public education funding will continue to shrink, and the amount of funding districts pay into recapture for wealth equalization will continue to increase. Bettencourt emphasized his prediction that increased revenue in FY 2019 will provide additional general revenue (GR) which will be available to help fund schools.

State Rep. Diego Bernal (D-San Antonio), who is vice-chair of the House Public Education Committee, raised a question over how equity would be preserved if legislators make changes to or eliminate the recapture system. State Rep. Ken King (R-Canadian), who is also a member of the House Public Education Committee, also raised a concern that any increase in school funding will need to be sustainable.

Bettencourt presented the governor’s tax cap plan as the solution. The plan would increase funding for districts that increase teacher pay and improve student outcomes, however Rep. Bernal noted that outcomes-based funding threatens to reward districts that already have the resources necessary to improve while neglecting districts that have failed to improve precisely because they lack the necessary resources. The plan would also limit property tax revenue growth to 2.5 percent per year, which the plan promises to make up for with state funding.

Another proposal discussed by Bettencourt is one presented by the Texas Public Policy Foundation (TPPF), a far-right pro-voucher organization, which would aim to eliminate all school district maintenance and operations (M&O) property taxes. This would cost roughly $51.3 billion for the 2018-19 biennium. The TPPF proposal claims to be able to pay for itself by dedicating future increases in state revenues to public education, but Bettencourt conceded that this is an optimistic view.

Bettencourt also briefly discussed the idea of “sharing” recapture. In this plan, property value growth would be divided by thirds, and the benefits from the growth in property values would ostensibly be shared. Additionally, Bettencourt suggested using the increase in production severance taxes – largely due to oil and gas activity in the Permian Basin – to help fund public education. This funding stream currently already flows to public education and general revenue, with an overflow stream that is bifurcated between highway funding and the ESF. Despite the Senate’s opposition to spending ESF dollars in previous legislative sessions, Bettencourt indicated he’s now open to spending ESF money to help fund public education. Johnson argued that this represents a redirection of existing revenues and does not represent the new revenue necessary to improve school performance.

The working group voted to advance each of the proposals except the plan offered by TPPF to be considered by the full commission. Rep. King made the motion to table the TPPF plan, which he declared nonsensical. Several members expressed similar concerns. Closing the meeting, commission chair Scott Brister suggested that legislators should feel less constrained by court rulings enforcing equity. As a justice, Brister was a dissenting voice in the West Orange-Cove school finance ruling.

The full commission will meet Friday, again on December 5, and at least once more during the third week of December. The commission will get a chance to react to Tuesday’s recommendations and will arrive at a decision by the December 5 meeting on what the final report should look like. The following meeting will focus on what the report should say. The commission is required to submit its report to the legislature by December 31.

Brister asked commission members to do their best to reach a unanimous consensus on recommendations, and said that in lieu of a minority report, individual members will be allowed to place letters in an appendix to the final report.

 

Commissioner: School fund management needs structural change

The Texas State Board of Education (SBOE) heard from Texas Education Agency (TEA) Commissioner Mike Morath Wednesday morning to begin the second day of its November meeting.

TEA Commissioner Mike Morath addresses SBOE, November 14, 2018.

Commissioner Morath began by congratulating Member Keven Ellis (R-Lufkin) for his work as the board’s sole representative on the Texas Commission on Public School Finance, and called the recommendations put forward thus far by commission working groups “powerful.”

The commissioner praised the board for its handling of a funding dispute with the General Land Office (GLO) over the Permanent School Fund (PSF), formal oversight of which is split between the SBOE and the GLO’s School Land Board (SLB). Morath suggested legislators should address oversight of the PSF in its entirety. The commissioner pointed out that the PSF portion under the SLB’s stewardship has accumulated a $4 billion cash balance, which is creating a “significant drag” in terms of fund performance. Morath suggested legislators should consider structural changes, which could be worth an additional $150 million per year.

Commissioner Morath recapped the agency’s budget and priority initiatives, and disputed reports that the agency’s legislative appropriations request (LAR) calls for a reduction in state aid. The LAR is a formal budget request each agency prepares for legislators before each legislative session, and TEA’s LAR for the upcoming session seeks less state aid from general revenue (GR). The commissioner explained that this is required by the funding formulas, which have led to the burden shifting from state GR to local property tax revenues.

Member Ruben Cortez (R-San Antonio) pressed the commissioner as to whether that trend will continue. The commissioner repeated that the agency is complying with statute, and suggested this is the central question being addressed by the school finance commission.

Member Marisa Perez-Diaz (D-Converse) asked the commissioner to provide agency guidance for districts participating in or considering merging with charters under Senate Bill (SB) 1882, which was passed by the 85th Texas Legislature. Perez-Diaz noted that there are questions regarding who is formally in charge of schools at the local level after a contract with a charter is executed, and pointed out it seems districts are “building the plane while it’s in the air.” The commissioner said SB 1882 contracts now include 13 districts and 609 campuses.

In response to a question by Member Ellis regarding a ruling by the 5th Circuit Court of Appeals to uphold a $33 million penalty for failing to properly fund special education, Commissioner Morath indicated that the agency is actively trying to figure out its response moving forward.

The commissioner also fielded a question from Member Georgina Perez (D-El Paso) regarding the instructional materials portal, which legislators in 2017 ordered the commissioner to create as an online resource for educators. Perez noted there is concern how the portal will interact with the SBOE’s statutory authority to review instructional materials and the potential for creating duplicative processes. Commissioner Morath suggested the portal will evaluate a different set of factors than the SBOE.

Member Barbara Cargill (R-Conroe) also raised concern about transparency with regard to how portal material is evaluated, and clarifying that the board’s process will continue forward unchanged. The commissioner replied the agency is engaged in stakeholder outreach. Member Cargill suggested creating a frequently asked questions (FAQ) document.

Teach the Vote’s Week in Review: Nov. 9, 2018

Here’s your weekly wrap-up of education news from ATPE Governmental Relations:


This past Tuesday was Election Day. All across the country registered voters lined up at polling places (some with hours-long waits) to cast their ballots and make their voices heard. There were a number of impressive wins and historical elections across the country and Texas was no exception. Turnout for this midterm election was nearly double what it was in 2014.

While Texas’s Governor, Lieutenant Governor, and U.S. Senator Ted Cruz were all able to secure reelection, the margins by which they won were closer than usual. Democrats in the Texas House were able to flip 12 seats, a gain that has implications for the impending race for a new House Speaker, while the minority party in the Senate also gained two seats. Senate Democrats will most likely still face a vacancy for at least the first part of the 2019 legislative session; Sen. Sylvia Garcia (D-Houston) announced her resignation today following her election to a U.S. Congressional seat on Tuesday. Gov. Greg Abbott must now call a special election to fill the state senate seat within the next couple of months. Additionally, the seat flipping in the state legislature might not be complete at this point as a number of candidates who seemingly lost their elections Tuesday by narrow margins are waiting for provisional and mail-in absentee ballots to be counted. Margins that remain slim following the completion of the vote counting could trigger recounts in a few races.

What we know for sure at this point is that Texans made a statement with this election by electing a myriad of pro-public education candidates to office. ATPE Lobbyist Mark Wiggins breaks down the math of this week’s election results in this blog post.

 


A 2012 decision by the state of Texas to spend less money on students with disabilities is coming back to haunt it. The U.S. Court of Appeals for the Fifth Circuit has ruled to uphold a penalty levied by the U.S. Department of Education that withholds $33.3 million dollars in federal funding from Texas’s special education grants. The penalty was imposed after Texas was found to have withheld the same amount of money in funding for special education programs. While the state argued that its special education programs had helped students overcome their disabilities and hence fewer special education services were needed following the 2012 funding decrease, the federal education ageny contended that states can not reduce funding levels from year to year.

You can read more about the ruling and the history behind it in this article from the Texas Tribune.