Thursday, December 15, 2005

Failing to fix school funding in time won't affect every district

Guerra maintains that contrary to myth, if lawmakers don't meet the deadline for financing our public schools in the Spring special session, it is likely that some schools would stay open. In Sunday's Express-News, he promises to provide details on why a select group of school districts won't be affected in the event of lawmakers' inaction. Stay tuned.


by Carlos Guerra
San Antonio Express-News

CORPUS CHRISTI — When the Texas Tax Reform Commission convened its third hearing here Tuesday, there were about as many people in the audience as there were commissioners on the dais.

"We'll have about 15 of these around the state," Chairman John Sharp said before the hearing started. "We would have had a lot more, but June 1st is coming around pretty fast. We'll have to have our recommendations finished by the end of March and the special (legislative) session in April or May to meet the deadline."

Talk of the urgency created by the June 1 deadline peppered numerous discussions, and most believe that if the Legislature doesn't have a fix by then, all Texas schools will be shuttered.

But exactly what will happen if the Legislature can't agree on a plan by the deadline and whether all school districts will be affected equally is misunderstood.

In 2001, when discontent over Texas' school funding system started boiling over, the issues were increasing the money spent on public schools, reducing school districts' property tax rates and eliminating the funding system's share-the-wealth provision that forces rich districts to share like good Texans. But legislators could not reach any accords during the five sessions they tussled over the school funding system.

Finally, state District Judge John Dietz ruled that schools were not funded enough to pass constitutional muster and that the funding system's reliance on property taxes — which are capped at $1.50 per $100 valuation for maintenance and operations — had created an unconstitutional state property tax. And he left the Robin Hood provision intact.

Dietz ordered the whole mechanism fixed by Oct. 1, 2005. But when the state appealed his ruling, the countdown was suspended until the appeal was decided.

Months later, the Texas Supreme Court upheld Dietz's ruling that Texas had, in effect, created an unconstitutional state property tax that denied districts meaningful discretion in spending. But the justices overturned his finding that school funding was not sufficient to fulfill the constitutional mandate — albeit with a warning that it was close to becoming constitutionally unacceptable in that respect, too. And the high court extended the deadline to June 1.

Gov. Rick Perry responded by naming a blue-ribbon panel of Texas business people to the commission and charged them with devising a plan to "buy down" property taxes and replacing the lost revenue with other tax money, dollar for dollar. But as Sharp explained Tuesday, "He took a state income tax off the charge."

Tuesday, discussion about improving public schools was only tangential because the focus was on things like fixing the state's franchise tax so it won't be a voluntary tax, raising sales tax rates and adopting new "broad-based" business taxes. There was also an impassioned plea from South Padre Island businessman Doyle Wells for putting "destination casino resorts" on a statewide ballot.

But interestingly, while most believe that the court's deadline will pressure lawmakers to agree on a fix, every tax change that has been suggested has been rejected at least once by legislators.

Even more interesting is that, contrary to myth, if lawmakers don't meet the deadline, it is likely that some schools would stay open.

Tune in Sunday for details on why a select group of school districts won't be affected in the slightest by lawmakers' inaction.

To contact Carlos Guerra,
call (210) 250-3545 or e-mail


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