History: Public School Finance 1979: The system of property tax administration, which had been contributing to inequities among school districts, was made more rational by passage of League-supported bills in 1979 requiring one appraisal district per county and by the establishment of the State Property Tax Board. The tax board is responsible for determining the market value of taxable property in each school district, an essential factor in calculating school finance formulas. 1983-1984: Much attention was focused on school finance and teacher salaries during the 1983 legislative session. Because of a tight budget and the unwillingness of some legislators to raise taxes, no substantive changes were made. Following the session, the Select Committee on Public Education (SCOPE), chaired by Ross Perot, was appointed to investigate the financing of education in Texas with a view toward reform of the system in a special legislative session. The Texas Legislature met in special session during the summer of 1984 to enact many of the recommendations of SCOPE, including a complete overhaul of the foundation program. HB 72 changed the foundation program from one based on objects of expenditure (teacher salaries, transportation, operating expenses) to a weighted approach based on various educational programs (regular education, special, vocational, compensatory, and bilingual education). Three significant new programs were mandated: pre-kindergarten for disadvantaged four-year-olds, summer bilingual education for four- and five-year-olds with limited English, and a class enrollment cap of 22 in grades K-4. HB 72 expanded the foundation program level to absorb a greater share of local enrichment. For 1985, $900 million in state funds were added and the local share was raised by $1.1 billion, thereby diverting local tax revenue from enrichment to the local share of the foundation program. While the legislature enacted the largest tax bill in the state's history, local school board trustees enacted the largest school property tax increase ever, raising property tax levies by $519 million. Increased local tax levies substantially negated the equalization improvement that the legislature tried to achieve. 1985: School funding in the lean budget of the 1985 legislative session fared comparatively well in the face of gloomy revenue projections. Little significant education legislation passed as the state leadership remained firm in its resolve to avoid a major overhaul of the recent education reforms. The gifted and talented were added as a special population to the foundation program, and the jeopardized optional full-day, full-state-funded kindergarten was retained. 1987: During the 1987 legislative session, several attempts were made to cut the public school budget because of the revenue shortfall. The League testified in favor of an increase in the level of state aid to ensure that all Texas school children would receive quality education. By the time the final 1988-89 budget was adopted, public education was not trimmed substantially. We also testified against a bill that would have mandated the adjustment of public school funding formulas through the appropriations process since a League position speaks to the clear assignment of responsibility in state government, and we believed school funding formulas were the primary concern of the Texas Education Agency and the House Education Committee, not the House Appropriations Committee. 1989: In the spring of 1987 Judge Harley Clark declared Texas' school finance system unconstitutional. This decision was overturned by the court of appeals and was then appealed to the Texas Supreme Court. In the meantime, during the 1989 legislative session, several attempts were made to add substantial amounts of money to the Foundation School Program in order to offset the Clark decision. However, because there was great reluctance to raise taxes again, only $450 million in new state money was provided to the public schools although $360 million was in the form of a guaranteed tax yield system. Most observers agreed the legislative action was insufficient to rectify any inequities in funding between rich and poor districts. Indeed, in October 1989, the Texas Supreme Court, in Edgewood I, threw out the school finance system. 1990-1991: In response to the Texas Supreme Court ruling that the school finance system was unconstitutional, the legislature passed SB 1, which was also declared unconstitutional by the high court in the Edgewood II decision in January 1991. The court set a deadline of April 1, 1991 for the legislature to adopt a constitutional system. Thus, the search for an equitable school funding system and the means to fund it dominated the regular session of the 72nd Legislature. LWV-TX adopted Public School Finance as a priority and consistently affirmed the need for adequate as well as equitable funding for the public schools. The plan ultimately adopted created 188 new taxing districts known as County Education Districts (CEDs.) Funds raised within the CEDs were redistributed among school districts within the CEDs on the basis of property tax wealth and tax effort. 1992: In January, the state Supreme Court in Edgewood III struck down the CED tax system as unconstitutional, holding that this system was in effect an unconstitutional state property tax, and furthermore that the CED tax was not a valid local tax since it had not been approved by the voters in each CED. The high court set a firm deadline of June 1, 1993 for the legislature to come up with an equitable system that did not violate other sections of the state constitution. The League was active in the November 1992 special session which was called to find a solution to the school finance dilemma. A proposed plan to switch from the CED county-wide system to statewide recapture of property taxes, redistributing certain property tax revenues from the wealthiest districts statewide, failed to win the necessary legislative approval to put it on the ballot as a proposed constitutional amendment 1993: With the court-imposed June 1993, deadline looming, the League chose to dedicate significant resources to following and shaping the school finance bill as the 73rd Legislature convened in January. The League lobbyist stayed on top of the ever-evolving bill as the state struggled to find a formulation that the court would find constitutional, that the legislature would approve, and that met the state leadership promise to voters of no new taxes. Voters rejected the constitutional amendment that the legislature, with League support, put on the May 1993 ballot. This proposition, known to some as a "Robin Hood" or "share-the-wealth" plan, would have required a limited redistribution of local property taxes from the wealthiest districts to the neediest districts statewide. With the defeat of the May 1 proposition and with one month before the court-imposed deadline, the legislature passed a school finance plan that gave wealthy districts five choices for sharing property tax revenues with property-poor districts in the state. In the summer following the 1993 regular session, many of the wealthy districts chose, with overwhelming voter approval, the option of transferring funds to the state for redistribution statewide in lieu of risking forced consolidation. At the same time, however, these districts were challenging the new school finance plan in court. The needier districts were also challenging the plan, contending they would have to raise taxes just to stay even financially. While the League was actively supporting the equitable, limited redistribution of local school taxes to property-poor districts in the 73rd Legislature, the League called again for a restructuring of the state tax system. The League noted that the share of school funding continues to decrease while the burden on the local school property tax increases each session. What the League has long advocated to reverse the trend is adequate state revenue from a broad-based, statewide tax, such as the income tax. 1995: As the 74th Legislature convened, the Supreme Court affirmed the constitutionality of the 1993 school finance plan. Thus, for the first time in several sessions, public school finance was not a priority issue for legislators or the League. Although the League was not active in this area, the legislature enacted and the governor signed Senate Bill 1, a rewrite of all of the state's public education laws. Some highlights of the new law include: * individual districts are given the option of more local control if they adopt rule charters * minimum teacher salaries were increased * schools will now have "foundation" and "enrichment" curricula * in the area of school finance, the basic allotment per student was raised. $170 million was appropriated for assistance for instructional facilities. Low-wealth districts with acceptable tax efforts may apply for state assistance for construction/improvement of instructional facilities. (Note that, in affirming the 1993 school finance plan, the Supreme Court emphasized the state's duty to provide all districts with substantially equal access to operations and facilities funding. The court stated that there was no requirement for a separate facilities component in the plan as long as districts are able to meet their operations and facilities needs from available funding. The court warned, however, that the point at which some districts will be unable to meet these needs under the plan is near.) 1997: As noted in the Financing State Government section, a tax relief bill dominated the session, but the legislature was unwilling to tackle real reform of the state's taxation system, particularly the thorny issue of public school finance. The tax bill finally passed by the legislature funded property tax relief for homeowners with the state's $1 billion "surplus." The League expressed concern about this type of funding, taking money away from important services such as public education. In addition, there may be no surplus in the next biennium to compensate for the reduced property tax, imposing an added burden on local school districts. The only significant change in public school finance to come out of this legislature was the dedication of lottery funds for education, a move which the League strongly opposes. Once again during this session, legislation that would have allocated funds for public education to private schools, via vouchers, was defeated. The League presented testimony and wrote to legislators expressing opposition to such measures. 1999: Once again, the issue of private school vouchers took center stage in the arena of public school finance. LWV-TX was a part of the Coalition for Public Schools. We used our grassroots network not only to contact legislators telling why using public funds for private education is bad public policy, but also to contact targeted legislators at crucial times during the session. No-voucher-legislation is one of the successes of this session. 2001: LWV-TX again worked with the Coalition for Public Schools. This session the issue was charter schools, not vouchers. The Coalition supported an excellent charter schools bill based on an interim study that passed the house. A less desirable bill passed the Senate. However, the compromise bill addressed the issues identified during the interim. These issues include a cap of 215 on open-enrollment charter schools and elimination of the category "at-risk" charter schools; the designation of funds received by charter schools as public funds held in trust for children; increased powers for the commissioner of education over licensing of charter schools; a requirement of at least a high school diploma for all teachers in charter schools; and a requirement for notification of parents about the qualifications of all teachers. A teachers' health insurance bill also passed. Because there were many advocates on this issue, LWV-TX monitored but was not heavily involved in its passage. Funds in the amount of $1.24 million were earmarked for health benefits for teachers. Small districts (fewer than 500 workers) are required to join a statewide insurance pool that is also optional with districts up to 1,000 workers. Larger districts must wait until 2005 to join unless the state is ready sooner. 2003: Legislators vowed to revamp the way Texas public schools were funded, but the House and Senate couldn't agree on a plan. The House plan would have put a sunset date on Robin Hood and allowed lawmakers to come back during a special session to study the issue. The Senate plan, backed by Lt. Gov. Dewhurst, would have cut property taxes while expanding sales taxes and would have repaired the system during the regular session. Neither plan passed during the regular session, but legislators did extend an additional $1.2 billion to public education using per-student formulas to keep school districts alive until a new system is found. To complicate matters, during the session the courts ruled that the case from property rich schools calling for an end to Robin Hood could be heard. Governor Perry vowed to call a special session, but did not set a date. House Speaker Craddick appointed a House Select Committee on School Finance, divided into eight subcommittees, which is charged with looking at school finance and the state tax system. While the focus will be primarily on school finance, there could be repercussions across the entire Texas public finance spectrum. A special session of the legislature is expected in late winter or spring, 2004. In the area of vouchers, which were very much a part of the session, `organized people defeated organized money', according to the Coalition for Public Schools (CPS) comprised of 38 organizations, including the League of Women Voters of Texas. For the first time, the Governor, Lt. Governor, Speaker of the House and the Chairs of the Public Education Committees in both the House and Senate supported private school vouchers. In addition, prominent state and national individual and organizational proponents testified before legislative committees and/or took leadership roles in the voucher fight. The voucher and virtual charter school battles started with straight-up bills discussed in public settings. But when those bills failed to pass, skirmishes continued until the final hours of the regular session in less visible negotiations in conference committees and via last-minute floor amendments to other bills. Lawmakers realized it would be fiscally irresponsible to take away funding from cash-strapped public schools to set up a new program to subsidize private and religious schools and home schools. The message from the CPS members was that Texas taxpayers cannot afford private school vouchers, and that every available dollar must be used to ensure that every public school in every neighborhood is adequately funded so all Texas children can succeed. 2004: The Governor called a special session on public financing in the spring. LWV-TX partnered with Common Cause, Public Citizen, the Grey Panthers, the Christian Life Commission, Texas Impact, and the Texas Education Crisis Coalition to write and release a joint statement on school finance reform addressed to the legislature and sent to the governor. Through work with other groups and League statements to the Joint Committee on Financing Education and to the Senate Finance Committee, LWV-TX supported the message that reform provided taxpayer equity and adequate funding to ensure that all Texas school children receive a high quality education and recognize that equity and quality are inseparable. (See Spring 2004 Texas Voter.) The session expired without completion of legislation or constitutional amendments. 2005: During the regular session, the legislature did not accomplish their #1 goal: to reform and improve the state's school finance system. By failing to pass a school finance reform bill, the legislature once again let politics shortchange the school children of Texas. Cuts were made during the last session, and the special session which followed failed to provide a solution. This session is the 3rd failure to provide meaningful support for the public schools. The leadership team of Gov. Perry, Lt. Gov. Dewhurst, and Speaker Craddick was unable to reach a compromise on the public school finance/education reform/property tax relief package that was the centerpiece of the 79th session of the legislature. It appeared that the emphasis was more on lowering property taxes than on solving public school finance problems. In addition, state leaders were determined not to raise taxes overall, which limited the money available for schools and cost them support among education groups. During the late days of the session, Senate negotiators put emphasis on seeing that every school district in the state had nearly the same amount of money per student. They were also particularly critical of House efforts to raise the sales tax, saying they hurt low- and middle-income families. The one success was that again, no voucher legislation was passed. There were several attempts to pass vouchers, both in specific bills about vouchers and as amendments to other bills. One session on the House floor was especially dramatic with close votes and parliamentary maneuvering. 2005: (Special sessions #1 and #2) Perry called a special session following the regular session. Public school finance was also back in the courts. The Supreme Court will rule on a district court judge's decision that the state school finance system is unconstitutional in both equity and adequacy. During Special Session #1 LWV-TX issued two Action Alerts asking local Leagues to contact first their house members, then both their senators and representatives, urging them to oppose HB3 (See Financing State Government). LWV-TX sent a letter to all members of the Legislature asking them to vote against the bill when it came out of the conference committee. LWV-TX believed that the bill did not fund the schools more adequately or equitably AND believed that the property tax relief and sales tax increases were not equitable to those taxpayers with incomes of $100,000 and below. Again the Legislature had clearly NOT addressed the dual issues of funding public education and reforming the tax system to pay for that education. 2006: Public school finance and education reform was the agenda for the Senate Select Committee on Education Reform & Public School Finance that met biweekly in anticipation of a special session. A special legislative session on public school finance was called early in the spring following the March primaries. The session had to address the subject of the Supreme Court's June 1 deadline on school finance which regarded as unconstitutional the current (statewide) property tax structure. State tax reform was the subject of the Governor's Advisory Committee on Tax Reform, chaired by John Sharp. The report and recommendations of the Committee formed the basis for a broad-based business tax reform (supported by LWV-TX) that was adopted by the special session and which served to answer the Supreme Court decision. Schools were able to open on time. It remains to be seen if the business tax and the actions taken by the Legislature (much of which concerned lowering the property tax) will form an adequate, dependable source of revenue for the public schools. 2009: The surviving public school finance bill, HB 3646, provides $1.9 billion in new money-- largely from federal stimulus dollars. It was allocated in SB 1, the state's biennial budget bill. HB 3646 makes changes that improve the way schools are funded and provide teachers with a minimum of an $800 pay raise. However, comprehensive reform of public school finance in Texas looms large. Schools face rising costs and a state funding freeze at 2006 levels. In addition, local revenues are capped at a rate that can be increased only through local elections. The need to change public school funding formulas remains a critical issue for the next session. 2011: Public school finance was a critical issue during this session, when legislators faced a $27 billion shortfall. Impasses over funding for education and health prompted the special session, though other issues were added later. Once again, the legislature failed to address systemic problems with the state's school finance system that is both inequitable and inadequately funded. SB 1, the fiscal matters bill that passed during the special session, underfunds schools by $4 billion in the Foundation School Program and by $1.5 billion in state grants for such programs as full-day prekindergarten, science labs, Student Success Initiative funding for extra help for students at risk of failing state high-stakes tests, educator bonuses, the Communities in Schools dropout prevention program, and advanced-placement incentives. This is the first budget bill in more than 60 years that does not fund new enrollment in Texas public schools, estimated at 80,000 to 90,000 more students each year. After using $3.2 billion of the state's Rainy Day Fund to address the budget deficit, the legislature refused to spend any the remaining $6 billion in the fund for schools. Nor would the legislature tackle the root cause of the school budget crisis, the 2006 tax swap that replaced property tax support for public education with a tax on small and medium business, called the margins tax. It has never resulted in expected revenues. SB 1 does begin to phase out the target revenue funding model that was created in 2006 in connection with the margins tax. This model created inequities in how funding is distributed to local districts. While SB 1 repeals target revenue in 2017, it is unclear how it will be further reduced and what future legislatures might do. Another provision of SB 1 allows certain charter schools that qualify to access the Permanent School Fund to guarantee bonds for facilities--a privilege previously authorized only for school districts. Many believe the new provision will put the PSF at risk, since charter schools do not have a tax base. SB 2, special session, appropriates money for the support of government from Sept. 1, 2011, to Aug. 31, 2013. It is a technical bill that avoids having deficits in both public education spending and Medicaid at the same time. It is related to House Joint Resolution 109, a proposed constitutional amendment, which appeared on the November 2011 ballot as Proposition 6 and passed. It allows SB 2 to appropriate $150 million each of the next two school years from the Available School Fund to public education. However, these additional funds will be offset by a matching reduction in state general revenue funding. Thus, passage of this amendment will not result in any additional funding for public education. SB 8, special session, was designed to provide flexibility to school districts to deal with shrinking budgets and personnel cuts. The bill allows districts to cut teacher pay in several ways, repeals the salary floor established in 2009, and changes the 45-day deadline to notify contract staff of nonrenewal to 10 days before the end of the school year. These changes were vigorously opposed by organizations representing teachers, who have been rocked by job cuts and expectations to do more with less. SB 6, special session, creates a new Instructional Materials Allotment (IMA) that merges funds for textbooks, electronic textbooks, and technology into one fund. The IMA creates a new funding formula that requires the State Board of Education to set an annual distribution from the Permanent School Fund to the Available School Fund to the IMA. School districts will have greater flexibility over use of the dollars. Successfully stopped were a number of proposals including: a provision in SB 8 that would have increased the 22-1 class-size cap in kindergarten through grade 4; proposals that would have raised or eliminated the current 215 cap on the number of open-enrollment charter schools that may be granted by the State Board of Education; and several voucher schemes that would have drained tax dollars from public schools. 2013: After the dramatic cuts to education funding by the 82nd Legislature in 2011, the 83rd Legislature was under pressure to restore the money. The 2011 cuts had resulted in the elimination of 25,000 faculty and staff jobs, including 11,487 teaching positions. The $5.4 billion cut amounted to a loss of more than $500 per pupil. The 83rd Legislature responded with HB 10 (Pitts) SUPPORT, a supplemental appropriations bill that funded various agencies through August 31, 2013, and included $317 million from general revenue and $313 in "recaptured" property tax revenue to the Foundation School Program. This bill passed both houses and went into effect March 10. Then they got to work on the budget for fiscal 2013-15. The final budget included $3.4 billion in education funding, but that was only 85% of what was cut in 2011, and still left the per-pupil funding more than $500 short of the level reached before the recession. It also did not restore the massive cuts to programs such as full-day pre-kindergarten and the Student Success Initiative, which offered help to students struggling to pass the state exams. Another supplemental budget bill, HB 1025 (Pitts) SUPPORT would have added $500 million more for education. It passed both houses, was included in the budget, but was subject to a line-item veto by Governor Perry. In early 2013, the lawsuit by coalitions of Texas school districts against the state resulted in a ruling that the public school finance system was inadequate and inefficient. However the judge agreed to have a new trial after the legislative session, to take into account changes made by the 83rd Legislature. The new trial is scheduled for January 2014. The cap on charter schools was reset from 215 to 305 (by 2019) in SB 2 (Patrick) OPPOSE. It passed both houses and was signed by the governor. This bill exempts dropout recovery charters from the cap. On the positive side, the bill gives the Texas Education Agency (TEA) more authority to close poor performing charter schools. Vouchers reappeared in the 83rd Legislature as "scholarships" for poor and at-risk students, with the funding to come from "donations" of part of an entity's state insurance premium tax or franchise tax. We opposed at least five Senate bills and two House bills, and all failed to pass their respective houses. The bills were by Senators Patrick, Paxton, Williams, and Campbell. The House bills were by Representatives Capriglione and Callegari. 2015: This was not the year to consider revamping public school finance. The push in the Legislature was to lower taxes, especially property taxes, which mainly fund public schools at the local level. The House wanted to lower the sales tax instead, but the conference committee on the budget decided on the property tax reduction, as well as franchise tax reduction. However the state promises to reimburse districts for lost revenue. The reduction is formed by raising the exemption on the value of the property from $15,000 to $25,000. All this will require the passage of a constitutional amendment this fall. The final budget did give $1.5 billion to public schools above the $2.3 billion needed for enrollment growth. This includes $41 million for math and reading academies, and $118 million for high-quality pre-kindergarten programs. Meanwhile, for the second time in two years, State District Judge John Dietz ruled that the Texas school finance system is unconstitutional. His ruling states that Texas fails to provide its schools with sufficient funding and that it distributes its funds among districts unfairly. Even though the 83rd Legislature restored 65% of its 2011 cuts, it wasn't enough and Texas now spends $600 less per student than it did in 2009 (adjusted for inflation). The state appealed his ruling to the Texas Supreme Court, which will not decide it until next year. House Public Education Chair Jimmie Don Aycock offered a bill that would have addressed the problems (HB 1759 SUPPORT), but it was pulled after 2nd reading so that a long debate would not kill other bills at the midnight deadline. A few bills addressed vouchers, this time called Education Tuition Grants, which would have allowed businesses to donate part of their taxes to "educational assistance organizations." They would then award the money to students to attend private schools. Only one of these passed the Senate (SB 4 OPPOSE) but died in House Ways and Means. This year vouchers went nowhere.