Wednesday, February 16, 2005

Battle Brewing Over Fairness of School Plan

Some districts would see huge windfall

by Jason Embry
Wednesday, February 16, 2005

The new debate over school finance in the Legislature keeps coming back to an old question.

The issue of how to make sure schools across Texas have similar amounts of money to educate each child has carried the debate over school finance in and out of the courtroom for the better part of four decades. Leaders of the Texas House say the major education bill they're pushing this year would make an already equitable system even more so, in large part by reducing schools' reliance on local property taxes for revenue.

"We've never considered this degree of equity in the history of the state," said Rep. Kent Grusendorf, R-Arlington, chairman of the Public Education Committee.

But critics of that plan point out that about two dozen of the 1,040 school districts in Texas stand to see their revenue shoot up, by more than 50 percent in some cases, because the House plan would limit the amount of local property tax money that a district must hand over for redistribution to other schools.

None of those districts is in the Austin area.

"You take a select group of schools and you super-fund them when you don't have enough money to meet the basic needs of some districts," said Wayne Pierce, executive director of the Equity Center, an advocacy group that represents schools with relatively low property values.

The plan calls for the maximum property tax rate for school maintenance and operation to be reduced from $1.50 per $100 in assessed property value to $1. The state would make up for that money by increasing other taxes. School districts that have smaller tax bases relative to their enrollment would get more money from the state so that all schools have roughly the same revenue per student.

There would still be some revenue-sharing among districts to prevent property-wealthy districts from raising significantly more money than districts with smaller tax bases, though far less than there is now.

In addition, local voters could agree to let the district tack another 10 cents onto their tax rate over five years in the form of a "local enrichment tax."

Grusendorf said the House plan would guarantee that 90 percent of students are in districts that can raise about the same amount of revenue per student with the enrichment tax, up from 79 percent under the current system.

"The Supreme Court has clearly said so long as you equalize the basic program that you can have local enrichment," Grusendorf said. "In my mind there's no question that this passes the constitutional test."

Pierce, however, said the figure fell to 79 percent because lawmakers directed some education money away from the formula in 2003, instead sending it directly to districts.

The House plan would put a 35 percent limit on the amount of local property tax money that a property-wealthy district must send back to the state. Right now, for example, Rep. Dan Branch, R-Dallas, said that one of the school districts he represents, Highland Park, sends about 70 percent of its property tax money outside the district.

"Caesar should never take more than about a third off of an individual's plate, a family's plate or a school district's plate," Branch said.

But the two dozen districts that would have to pay out more than 35 percent if not for the new cap would see large increases in the money available to them. State and local revenues for maintenance and operation in Highland Park would increase from $5,883 per pupil to as much as $8,948, a 52 percent jump.

But many of the other two dozen districts are not in wealthy residential areas. Webb Consolidated, near Laredo, which sits on oil-and gas-rich property but has only about 300 students, would see its per-pupil spending jump from $14,178 to $18,793.

The per-student revenue in the Austin school district would increase from $6,325 per student to $6,515, a 3 percent increase.

Those figures do not account for the enrichment money that districts could raise.

Districts can have vastly different per-student amounts because the current system provides extra money for some types of students, such as those who speak little English or need special education. There is also money in the system to help small school districts.

Still, critics are alarmed by the 23 districts' potential ability to raise and spend so much. Pierce said it's important to remember that districts are part of a larger system.

"You could say all the money in our system is in the state system for public education, regardless of which way it is raised," he said.

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