School 'fix' plan: Is it sufficient?

School 'fix' plan: Is it sufficient?
Experts see good step, but it may not satisfy court or long-term goal

12:00 AM CDT on Sunday, May 14, 2006

By CHRISTY HOPPE / The Dallas Morning News

AUSTIN – The school finance plan being stacked like so many term papers on the governor's desk beats the Supreme Court deadline and assures the schools will open in August. But the plan leaves enough unanswered questions that many experts believe the state could be back in court fighting another crisis in as little as two years.

The new state business tax doesn't raise enough money to pay for promised property tax cuts – in fact, it falls $5 billion short. Lawmakers are counting on a booming economy to make up the difference, but if it turns sour, the crisis could be more immediate.

Plus, the Supreme Court warned that current education funding levels were barely adequate.

But the Legislature is putting a modest amount of new money into education programs. Within a few years, the "drift towards constitutional inadequacy" warned of by the court could be pushed by the low tide of dollars in the plan.

And finally, as homeowners are again finding this month, property appraisals are spiraling in many parts of the state. That and gradual increases in the property tax rate could push the state back to the brink of homeowner revolt.

Despite all that, most experts gave an appreciative nod to the Legislature, which is expected to finish work on the historic tax-swap package Monday. The plan, they noted, taps new revenue sources – chiefly a new business tax and added tobacco taxes – that allow a one-third cut in school property taxes while achieving an historical level of funding equality among the state's 1,037 school districts.

"It's a very promising first step, and if it hadn't occurred, they couldn't have fixed anything else downstream," said John Brooks, a lecturer on education at the University of North Texas and a former superintendent in the Northwest and Bridgeport districts.

In that first step, the Legislature also has diminished the Robin Hood system, whereby property-rich districts were forced to give away their tax dollars to equalize the dollars given to poorer districts. In addition, teachers received a $2,000 pay raise and high schools will receive additional funding to beef up curriculum and lower dropout rates.

But downstream are whitewater questions about whether this step is enough to satisfy the state's constitutional mandate on education.

Most of the emphasis of the Legislature was on lowering property taxes to $1 per $100 valuation – a drop of one-third from the current cap. Most of that tax money will be replaced with a new state business tax.

But the Supreme Court also told the state that school districts had to have "meaningful discretion" in the money they could raise. To give them that discretion, the plan allows districts to raise their tax rate 4 cents the first year. If they want more, they must go to their voters.

"Is that enough?" Dr. Brooks asked. "The answer is no."

That money, over time, will not produce the "vibrant curriculum that most people want."

Scott McCown agrees. The director of the progressive Center for Public Policy Priorities, a former state district judge who presided over a key school finance lawsuit, said that the 4-cent range provided by the Legislature doesn't put sufficient money into the school system.

"It's like you took your son and said, 'You have meaningful discretion to drive the car whenever you want, but there won't be any gas in it,' " Mr. McCown said.

If voters in many districts start turning down requests for tax hikes, then any wiggle room to provide curriculum, additional teachers and technology starts to disappear, he said.

"The whole session has been about cutting taxes. This is a net tax cut of about $2.5 billion a year," Mr. McCown said. "There will be less money for education down the line, not more."

He expects that "adequacy, equity and meaningful discretion will all be back in play," he said. "I think they'll be back in court in a year."

David Thompson, a lead attorney for school districts in the lawsuit that resulted in the Supreme Court's ruling, said that the plan will definitely require monitoring on issues of adequacy and equity. Still, he said, the Legislature has "done something that is very significant, and I personally applaud them."

Currently, transportation, teacher pay and other costs – such as fuel and utilities – are underfunded, the Houston lawyer said, and school districts might have to use their "local discretion" dollars to pay for services the state should be providing. All of these things bear careful scrutiny, he said.

"But my initial reaction is that if the Legislature hasn't reached the ultimate destination, they've taken a significant step along the journey in the right direction," Mr. Thompson said.

Another attorney in the court case, George Bramblett of Austin, indicated he still has some major concerns and plans to meet with his client districts in the near future.

"Obviously, it helps, but it doesn't solve the problem," he said.

The state has been operating an unconstitutionally funded system for at least the past four years, based on court rulings, he said, and that will take time to correct.

"This might solve the property tax issue, but it does not solve the adequacy issue," Mr. Bramblett said.

He said he couldn't speculate on what might happen with future litigation.

Clayton Downing, whose Texas School Coalition represents 140 property-rich districts, said he believes the legislation has bought at least a year of breathing room on school finance. The problem, he said, remains whether districts have enough discretionary funding.

"It won't help the schools and the teachers," Mr. Downing said, but at the same time, "equity is going to be the highest it's ever been, ever. You're going to reduce recapture statewide."

Within two years, fewer than 50 school districts will probably be subject to giving up their tax dollars to Robin Hood, he said. "It's a great, great start," Mr. Downing said.

Wayne Pierce, director of the Equity Center, which speaks for 600 low- and medium-wealth school districts, said transportation, bilingual education, teacher salaries and other basics are not funded well enough by the state in this plan.

And yet, he said, "This is the best structure that we've had."

Still, it is only the framework, he said. If schools can't raise tax money, if the state doesn't provide the funding to keep the schools on equal footing, and if the business tax doesn't raise enough money, then the school districts might have to return to the courts to seek relief.

"When you're building a house, you have to get that foundation in good. You wouldn't put up the walls, floors, windows without that," he said.

The test, he said, will be raising the roof – providing more money for education overall.

"Now they have to look at teacher salaries and money for education programs," Mr. Pierce said.

E-mail choppe@dallasnews.com

Online at: http://www.dallasnews.com/sharedcontent/dws/news/politics/local/stories/DN-schoolfix_14tex.ART.North.Edition1.90acb7d.html