Tag Archives: tax

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.

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 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.

 

School finance commission subcommittee approves expenditures plan

The Expenditures Subcommittee of the Texas Commission on Public School Finance met this week to lay out and vote on their recommendations back to the full commission. Based on both the recommendation and what the committee members had to say, it became clear that their primary goal is to drive dollars into increasing the basic allotment. They also have secondary goals of shifting funds out of programs not tied to educational programming and into programs designed to increase educational attainment for harder-to-teach students, particularly economically disadvantaged populations and English language learners.

The committee has not publicly released its report yet, but a summary breakdown of the recommendations can be found below. A video archive of the full subcommittee meeting, which lasted a little under an hour, is also available.

Group 1 – Reallocations of existing programs. This group represents approximately $5.3 billion to be spent on increasing existing initiatives and creating new initiatives.

  • Reallocate the Cost of Education Index (CEI) – $2.9 billion
  • Reallocate the 92-93 Hold Harmless – $30 million. This program only impacts 12 -20 school districts.
  • Reallocate the Ch. 41 Early Agreement Credit – $50 million. Eliminates a program that currently pays property wealthy districts to sign an annual contract by Sept. 1 agreeing to pay the state what they owe in recapture. The discount did not require districts to prepay or early pay.
  • Reallocate the Gifted and Talented (GT) allotment – $165 million. This recommendation eliminates the stand-alone allotment but does not eliminate other requirements to provide GT education from the Texas Education Code (TEC). Currently 99.9% of districts are at the 5% GT cap, meaning the same dollars can be more efficiently flowed out to schools through the basic allotment.
  • Reallocate the High School Allotment – $400 million.
  • Move from prior year to current year property values – $1.8 billion.

Group 2 – Increased spending on existing programs

  • Increase state compensatory education allotment from 0.2 to a spectrum that ranges from 0.225 and 0.275 as part of a tiered system that pays out higher amounts to campuses with more severely challenging populations. Currently, the recommendation is still based on free and reduced lunch but could use a more sensitive metric.
  • Change the transportation allotment to a millage-based approach at 0.83 cents per mile, to be set by appropriations.
  • Allow Ch. 41 districts to get compensated by the transportation allotment at a $60 million cost.
  • Fund the stand-alone small-size and mid-size district adjustment between $0 and $400 million outside the basic allotment, depending on where the basic allotment is set.
  • Increase the New Instructional Facilities Allotment (NIFA) to $100 million. This represents a $76 million increase over last session.
  • Expand Career and Technical Education (CTE) funding to include sixth through eighth grades – $20 million.

Group 3 – New programs

  • Create a dual language allotment of 0.15 at a cost of between $15 and $50 million. This new allotment would be in lieu of (not in addition to) the bilingual allotment; you can either get the bilingual allotment or the dual language allotment, but not both.
  • Create a dyslexia allotment of 0.1 – $100 million.
  • Create a Kindergarten through third grade ELL/economically disadvantaged allotment of 0.1 – $786 million. This money is not tied to outcomes and can be used to fund any program that seeks to improve reading and math on grade level by grade three, including paying for full day Pre-Kindergarten programs.
  • Create a grade three reading bonus of 0.4 – $400 million. This provides incentive money for students meeting grade level in reading on the 3rd grade standardized test.
  • Create a College, Career, and Military Readiness Bonus – no specific weight – $400 million. This is envisioned as a reallocation of the High School Allotment and is aimed to drive the state’s “60/30” goals.
  • Create a teacher compensation program – $100 million. This is the governor’s performance pay program. It is formula-based, not grant-based, and is not subject to appropriation. There will likely be no fiscal note for the program until year three, and it is envisioned to grow over time.
  • Fund an extended year summer pilot program – $50 million. This program is intended to reduce summer learning losses for disadvantaged students.

Additional changes recommended:

  • Change the guaranteed yield on the copper pennies from a set dollar amount to a percentage of the Basic Allotment. When the yield was set, the dollar amount used represented approximately 88% of the basic allotment. Now it is much less. Increasing the guaranteed yield increases state entitlement, which helps property poor districts and recapture districts.
  • Decouple the golden pennies from Austin ISD.

Stay tuned to Teach the Vote for reporting on future actions of the commission.

In last-minute meeting, revenue working group gets orders

The Texas Commission on Public School Finance working group on revenues met briefly Tuesday evening after the commission’s formal meeting adjourned. Unlike the other two working groups, the revenues group led by state Sen. Paul Bettencourt (R-Houston) did not post a public notice following Texas open meetings guidelines.

Texas’s open meetings law was passed to limit secret government meetings and ensure the public has access to deliberations of public interest. The law explicitly applies to the school finance commission as a whole, however its application to working groups of the commission is less clear. The only notice was posted the day of the meeting in an obscure portion of the Texas Education Agency (TEA) website. Because notice was not provided according to guidelines laid out by the open meetings law, few people attended the revenues meeting and no audio or video of the meeting is available.

According to those inside the meeting, Sen. Bettencourt stated the working group will aim to score various spending and revenue proposals, including raising the state sales tax or gas tax, enacting the performance pay program proposed by TEA Commissioner Mike Morath, limiting recapture, extending the Universal Service Fund (USF) tax on land telephone lines to cell phones, and the 2.5 percent tax cap proposed by Gov. Greg Abbott during the special session. Bettencourt requested members submit their ideas for study topics before the full commission meets again July 10.

A snapshot of the proceedings was posted on social media:

Why March 6 Matters: School Finance

Early voting is underway NOW for the March 6 Texas primary elections, so we’re taking a look at some of the reasons why it’s so important that educators vote in this election! Today, we’re taking a closer look at school finance.


Perhaps no issue impacts every Texan more than school finance. For all of the lip service politicians pay to reducing property taxes, the only way Texans will ever see meaningful property tax relief is if the legislature puts more state money into public education.

Journalists such as Texas Monthly‘s R.G. Ratcliffe and the Texas Tribune‘s Ross Ramsey have exhaustively reported how state lawmakers have gradually reduced the share of state dollars spent on schools, shifting the burden instead onto the backs of local taxpayers. School funding has gone from a roughly fifty-fifty split between state and local funding sources a decade ago to a situation in which local taxes make up more than half of the burden, with the state ponying up just 38 percent. That’s an inconvenient reality for some incumbent lawmakers who want to place the blame elsewhere for the rising costs on Texas homeowners, even going so far as to characterize well-documented reports of the decline in state funding as “fake news.”

The current school finance structure that relies so heavily on locally generated property taxes is a great deal for legislators: First, they run campaigns promising to lower property taxes and rein in government spending. Then they get points for reducing state spending, and let local officials face the music when they’re forced to jack up property taxes to make up for the state’s miserliness. The budget signed by Gov. Greg Abbott in 2017 actually reduced the amount of state dollars spent on public schools by $1.1 billion, and let the balance fall once again into the laps of local taxpayers.

Yet some legislators have shown an interest in restoring the balance. Under the leadership of House Speaker Joe Straus, the Texas House passed legislation during the 85th Texas Legislature that would have put as much as $1.9 billion in new dollars into the public education system. The infusion of new money was intended to begin the long process of fixing the state’s “lawful but awful” system of public school finance. The Texas Senate slashed that amount to $530 million, then ultimately killed the legislation as payback for the House’s refusal to pass a voucher bill.

Those hoping for school finance reform in 2017 had to settle instead on a new state commission created to study school finance. Some fear this commission could devolve into yet another vehicle for those pushing school privatization, and educators are watching closely.

The next chance to fix the school finance system and lighten the load on local taxpayers will come when the legislature meets in 2019, but public education supporters will have their work cut out for them. The next two-year state budget is expected to be even tighter, and lawmakers will have to carefully prioritize spending in order to meet even their most basic funding obligations.

What this means is simple: Texans will only see lower property taxes and better-funded schools if they elect legislators and leaders who will prioritize public school funding as a core principle. Without additional public education supporters in the Texas Capitol, the current leadership can be expected to continue the trend of defunding public schools and dumping the load onto local taxpayers.

Our kids deserve better.


Go to the CANDIDATES section of our Teach the Vote website to find out where officeholders and candidates in your area stand on school finance and other public education issues. Because voting districts in Texas are politically gerrymandered, most elections are decided in the party primary instead of the November general election. That’s why it is so important to vote in the primary election. Registered voters can cast their ballot in either the Republican or Democratic primary, regardless of how you voted last time.

Remind your colleagues also about the importance of voting in the primary and making informed choices at the polls. Keep in mind that it is illegal to use school district resources to communicate information that supports or opposes specific candidates or ballot measures, but there is no prohibition on sharing nonpartisan resources and general “get out of the vote” reminders about the election.

Early voting in the 2018 primaries runs Tuesday, Feb. 20, through Friday, March 2. Election day is March 6, but there’s no reason to wait. Get out there and use your educator voice by casting your vote TODAY!

 

Answering your questions on 2018 Texas primary ballot propositions

Texas primary elections are slated for March 6, 2018. In addition to voting for candidates, primary voters will weigh in on a number of ballot propositions. As we shared with you recently on our Teach the Vote blog, these primary ballot propositions are not the same as constitutional referenda or local propositions. The primary ballot measures laid out by each party do not have any force of law, but are instead used by the Republican and Democratic parties to help develop each party’s state platform, or the list of things the party and its members generally believe in and are working toward making into law.

Each of these two parties has more than ten ballot propositions they are putting up for voters to consider in 2018, and some of the propositions have implications for public education. Several ATPE members have asked us to provide additional background on the propositions and guidance on where voters may find additional information about what they mean.

Education-related issues included in Republican party ballot propositions:

If you are voting in the Republican primary, your first non-binding proposition on the ballot asks whether “Texas should replace the property tax system with an appropriate consumption tax equivalent.” One blog reader asked ATPE for a layman’s explanation of the proposition. According to additional information on the Texas Republican Party’s website, Proposition #1 relates to an existing plank in the state party’s 2016 platform that called for replacing the property tax system with another form of taxation, but not an income tax. The party’s delegates in 2016 preferred a tax that would be based on how much an individual or business consumes. The most commonly known form of consumption tax is sales tax. Under current law, the bulk of funding for Texas public education is generated locally through property taxes. Accordingly, we believe this proposition from the Texas Republican Party contemplates funding Texas public schools with higher sales taxes or some other form of more variable consumption tax in lieu of property taxes.

What would be required to eliminate the property tax by increasing the sales tax? In 2016, sales taxes generated $36 billion in state and local revenue, while property taxes generated more than $56 billion. According to the non-profit Texas Taxpayers and Research Association, the state sales tax would have to be raised from 6.25 to 23 percent, using the current tax base, to make up for revenue lost from eliminating the property tax. If you expanded the sales tax base by taxing things like groceries, gas, water, medicine, and electric bills, as well as adding sales tax for services like those provided by doctors, lawyers, and architects, Texas would still have to raise the state sales tax to at least 15 percent in order for sales taxes to replace the current revenue from property taxes. When you add on the 2 percent local sales tax, you would end up with a total sales tax range of 17 to 25 percent.

Republican primary voters will also see a proposition on their ballot that pertains to paying for private or home schools. The Texas Republican Party’s Proposition #5 asks whether or not “Texas families should be empowered to choose from public, private, charter, or homeschool options for their children’s education, using tax credits or exemptions without government constraints or intrusion.” Some members have asked ATPE what this proposition means. Under current law, Texas families can already “choose from public, private, charter, or homeschool options for their children’s education.” Current laws at the state and federal level also enforce very little regulation on private schools, while homeschools exist with almost no government regulation. On the other hand, traditional public schools and public charter schools are considerably more regulated and are both subject to the state accountability system while being made available to students at no direct cost to their parents. Since Texas families already have school choice under the law, this ballot proposition seemingly seeks input on whether or not the state should create some new form of voucher system that would fund private and or homeschool settings without attaching any accountability (“government constraints or intrusion”) to those public funds.

Another GOP ballot measure that mentions public schools this year is Proposition #6, which reads, “Texas should protect the privacy and safety of women and children in spaces such as bathrooms, locker rooms, and showers in all Texas schools and government buildings.” As with the first ballot measure discussed above, you have to compare this language to current law in order to unpack what the measure is actually proposing.

Texas already has multiple laws that protect women and children (and men for that matter) from harassment, assault, rape, murder, child abuse, and other specific crimes, whether those crimes occur in a bathroom, locker room, shower, or anywhere else. According to the Texas Republican Party’s voter guide explaining its 2018 ballot, this particular proposition is aimed at protecting against “some schools” that the party’s leaders say have “tried to allow boys to have access to girls’ private areas, including school showers and restrooms.” This proposition revisits the subject matter of some controversial bills that were filed during the 2017 legislative sessions but did not pass regarding school district policies on bathroom usage by transgender children. Texas does not have a state law prohibiting transgender children from entering a restroom matching the gender with which they identify. Currently, school districts or individual campuses set policies locally to determine how to address individual student situations and requests from families. This ballot proposition appears to contemplate whether or not there should be a single state law that supersedes any local policies.

A final GOP ballot measure that would impact public schools and other local entities has to do with property tax revenue. Proposition #10 reads, “To slow the growth of property taxes, yearly revenue increases should be capped at 4%, with increases in excess of 4% requiring voter approval.” To address questions about what this proposition means, it’s helpful to consider how local school funding is currently generated and what types of tax increases require voter approval under existing law.

About two-thirds of the money used to pay for local schools is derived from local property tax collections. As a result, any significant change to the property tax system is likely to affect school funding. Unlike most other local entities, the vast majority of schools are already subject to rollback elections if school district trustees choose to raise their local tax rate above current levels. This 2018 Republican party ballot proposition, however, speaks to revenue, which is a combination of tax rates and property values. Currently, if a school district’s revenue increases due to a rise in property values, and not because of an increase in the property tax rate, the district does not have to conduct a rollback election. Under a four percent revenue cap that is being proposed by the Texas Republican Party leadership, school districts would have to conduct a rollback election every time their revenue from increased property values exceeds four percent. It’s worth noting that rollback elections are themselves expensive to conduct and are funded out of money that would otherwise be spent by the school district educating students. This proposition contemplates that if voters do not approve of the increase in revenue, the district would likely have to decrease its property tax rate in order to bring down its total revenue increase to four percent or less.

As a side note, the Texas legislature has used increases in local property values to offset its own decreases in per-pupil state funding for more than a decade. This is why the ratio of state to local public education spending has gone from roughly 50/50 about ten years ago to 38/62 (or less) by 2019.

Education-related issues included in Democratic party ballot propositions:

If you are voting in the Democratic primary this year, your ballot will include Proposition #1 asking, “Should everyone in Texas have the right to quality public education from pre-k to 12th grade, and affordable college and career training without the burden of crushing student loan debt?” According to the Texas Democratic Party, the ballot measure is one of a set of propositions dubbed by party leaders as “The Texas Bill of Rights; 12 Big, Bold Ideas to Save Texas.”

Focusing on the pre-K through 12th grade portion of the language in this first proposition, it is unclear by the ballot language itself exactly what specific policies the Democratic party is attaching to ensuring each Texan’s “right to a quality public education.” There are dozens, if not hundreds, of potential initiatives that could fall under ensuring a quality education for every Texan. However, a closer look at the party’s 2016 state platform reveals that the party believes, “Every child should have access to an educational program that values highly skilled teachers and encourages critical thinking and creativity, without the harmful impact of high stakes standardized testing.” The party’s 2016 platform also contains several specific recommendations for funding Texas public schools, reducing recapture, ensuring that all mandates are funded, opposing using public tax dollars for private schools, prioritizing resources for pre-Kindergarten, addressing teacher quality through higher pay and teacher certification standards, reducing high-stakes testing, and other initiatives.

 

Click here to view the complete set of nonbinding propositions for the Republican and Democratic primary ballots in the 2018 primary election. For additional information about individual propositions, ATPE encourages you to check out the websites of the Texas Democratic Party and Republican Party. Remember that it is against the law for educators to use school district resources to communicate support or opposition for a ballot measure or candidate, but you can share nonpartisan and general information about the elections and the importance of voting.

Be an informed voter and use your educator voice to share input on your party’s platform. Get out and vote in the 2018 Texas primaries!

Teach the Vote’s Week in Review: Dec. 22, 2017

Happy holidays! Here’s your week in review from ATPE Governmental Relations:


Earlier today, President Donald Trump signed into law a major tax overhaul bill approved by Congress this week. The president also signed off on a short-term funding bill to keep the federal governmental operational for a few more weeks until longer-term legislation can be passed. The final $1.5 trillion tax bill omits some provisions that were worrisome for educators employed in public schools, which ATPE urged our congressional delegation to remove from earlier versions of the legislation. For more on the tax law that was approved, check out this blog post from ATPE Lobbyist Kate Kuhlmann.


Texas Speaker of the House Joe Straus (R-San Antonio) has announced his appointments to two key state commissions. First, the speaker revealed his picks to serve on the new Texas Commission on Public School Finance, authorized by the legislature earlier this year. The House appointments include Reps. Dan Huberty (R-Kingwood), Diego Bernal (D-San Antonio), and Ken King (R-Canadian). Fittingly, all three of the representatives chosen by the speaker also hold leadership roles on the House Public Education Committee: Huberty as committee chair, Bernal as committee vice-chair, and King as chair of the Subcommittee on Educator Quality. Also appointed to serve on the commission is Nicole Conley Johnson, who is currently employed as Chief Financial Officer for Austin ISD. Additional members of the school finance commission were previously announced by Gov. Greg Abbott and Lt. Gov. Dan Patrick.

Yesterday, Straus also announced that Reps. Chris Paddie (R-Marshall), Stan Lambert (R-Abilene), and Poncho Nevarez (D-Eagle Pass) would serve on the Sunset Advisory Commission, along with public member and retired accountant Ron Steinhart of Dallas. The commission is charged with overseeing and making recommendations to the legislature on periodic reviews of various state agencies.


Twenty Texas school districts will have an opportunity to take part in a pilot program using locally designed accountability measures. Commissioner of Education Mike Morath named the districts selected earlier this week from a pool of 50 applicants. The pilot program falls under Rep. Dan Huberty’s House Bill 22 passed earlier this year. For more on the local accountability pilot study, view information on the Texas Education Agency’s website here.