April 21, 2004
Perry, Strayhorn spar: Film at 11

This is getting to be a sun-rises-in-the-East thing: The Governor and the Comptroller are bickering again over school finance reform proposals. I'll leave it to you to determine for yourselves who's zooming who, but in the meantime I'd like to comment on this:

Perry wants to achieve equity in funding for schools by collecting business property taxes statewide and distributing that money to local districts. Residential property taxes would remain at the local level.

Under that scenario, Highland Park in Dallas would have $13,900 more per student, according to Perry's numbers, while the neighboring Dallas school district would get $179.

Perry was asked about this discrepancy during his appearance before the House Select Committee on Public School Finance. He said that his plan provides more equity than the current system for the vast majority of students.

"Keep in mind the big picture," Perry said. "Ninety-eight percent of the students in the state of Texas are educated outside those superwealthy districts."

Perry said he is open to "ideas on how to minimize this windfall" for about a dozen districts whose wealth comes from expensive homes. He said his plan would add an average $375 per student statewide.

But some lawmakers are questioning whether Perry's plan would meet the equity requirements set by the Texas Supreme Court. The court ruled in 1989 that districts must be able to raise substantially similar revenue per pupil at similar levels of taxation.

I don't know how you can square "$13,900 more per student" for Highland Park and $179 more per student in Dallas with any kind of notion of equity. I'm also wondering if that kind of discrepancy is throwing off the overall average of $375 per student per district that Perry is claiming. Look at the sidebar popup, which says that Alamo Heights in San Antonio would get an extra $3339 per student while Eanes in Austin would reap an extra $5941. I'd like to know how the numbers change if you take those districts out of the picture.

And yes, I know that DISD has a lot more students than Highland Park does, so on an absolute level it might get at least as much extra money overall. That doesn't change the per-district inequities, nor does it affect the average increase for each district.

Here's a little bit more about the Perry/Strayhorn dispute:

A spokeswoman for the governor called Ms. Strayhorn's numbers "patently false" because they overestimated property tax cuts in Mr. Perry's plan and "double-counted" the costs of eliminating Robin Hood sharing of property taxes.

The comptroller shot back that Mr. Perry low-balled certain costs to make it look more beneficial for school districts than it really is.

Like I said, make up your own minds.

For now, even though the session has been gavelled into order, most legislators have been dismissed until next week at the earliest.

Legislative leaders still haven't reached a consensus about how to replace the current finance system, which forces property-wealthy school districts to share their property tax revenue with poorer districts. The task of finding a solution now rests on a few dozen lawmakers; everyone else was sent home until next week while committees in each chamber begin their work.

In the House, where all revenue-raising measures must originate, the Select Committee on Public School Finance will meet at 11 a.m. today. State Rep. Kent Grusendorf, R-Arlington, is chairman of the 29-member committee.

"I've asked Kent to meet through the weekend to allow people that can't get here because they're teachers or they're working during the week to go on and participate on the weekend," House Speaker Tom Craddick said. "So I'd say we'll know where the House side is probably sometime next week."

The Senate Committee on Education, led by Florence Shapiro, R-Plano, will meet Thursday morning to listen to options, and the Senate Finance Committee will have a Monday afternoon hearing to hash out the money side of the issue.

Some of them are not too happy about the meet and adjourn session so far.

[Rep. Steve] Wolens, a Dallas Democrat who is retiring from the House after 12 terms, complained that Mr. Perry called the session before a consensus was reached among lawmakers. Mr. Wolens also questioned why the session was immediately adjourned until next week so a select committee can craft legislation.

"Why didn't we just come next week rather than this week?" he said. "We ought to be doing more than just postponing for a week our voting."

After Monday's session, [Rep. Jim] Dunnam fired off a press release echoing Mr. Wolens' complaints and suggesting "the real plan" on school finance is "being drawn in private."

Yesterday, Perry took the unusual step of appearing before the House Select Committee on Public School Finance. He got grilled pretty good, too.

[Perry] was asked by Rep. Mike Villarreal, D-San Antonio, why Villarreal should support raising money from unstable "sin taxes" for future funding when 95 percent of students in his House district benefit from the current Robin Hood shift of dollars.

Perry cited his office's research suggesting average gains of $375 per student statewide under his plan as school taxes drop. He said the San Antonio school district would reap nearly $600 more per student, with the property-wealthy Alamo Heights district gaining more than $3,000 per student.

Villarreal, reacting to the potential gap between the districts, said, "That's also a concern."

Perry said more work is needed to buffer such gaps but noted his plan would ensure equitable funding for districts encompassing 98 percent of the state's 4.2 million students, an improvement over the current system, leaving about 20 districts, including Alamo Heights, free to spend considerably more per student or cut taxes.

Perry continued: "If the debate is going to circle around 2 percent of the students in the state of Texas versus 98 percent of the students, then the fact of the matter is we're probably not going to be successful because I'm not sure that anyone in this room or anyone in this building can draw the perfect plan from an equity standpoint."

Perry told reporters he hopes "no one will throw the baby away just because it's got a birth mark or a bad spot. The idea that someone is not going to vote for this plan because it's not 'perfect' I think defeats our purpose."

I can see what Perry's getting at, but it seems to me that it's not the legislators he has to convince. It's the courts, whose ruling about school finance equity a decade ago led to Robin Hood in the first place, that need to buy into it. What's the point of passing Perry's plan if it's going to get bounced as unconstitutional?

I'm not sure what to make of this:

As he left the room, he said, "This is like Iraq."

Anyone wanna speculate what Perry might have meant by that?

Finally, Perry's newfound love of gambling has alarmed some longtime supporters.

Less than two years ago, Gov. Rick Perry warned that any attempt to expand gambling in Texas would have a "short life span" on his desk.

Now Perry wants to make revenue from new video slot machines a centerpiece of his school finance plan, leaving many gambling opponents, particularly those in religious circles, feeling betrayed and angry.

"Obviously, we were very surprised and kind of sad," said Bee Moorhead, director of Texas Impact, a multifaith religious group. "It's quite a shock coming from the governor, since he had made that stand earlier."

Livid would better describe the reaction from representatives of the Baptist General Convention of Texas, the state's largest Baptist group. They say that they have been trying to present their objections to Perry since January but that they can't get in to see him.

"We've been totally snubbed by the governor's office," said Phil Strickland, longtime director of the Christian Life Commission, the public policy office of the Dallas-based Baptist convention. "It's amazing to me that he would not want to listen to a significant part of the religious community on this issue."

Hey, it could've been worse. He could have had you all arrested.

Perry contends that his plan does not expand gambling but rather adds state regulation -- and taxation -- to an existing activity.

In a recent interview, Perry said that the legalization of video slots -- called video lottery terminals, or VLTs -- would reduce gambling.

"I think it is the consolidating of an activity that is going on in the state in rampant proportions in the form of eight-liners," Perry said. Eight-liners are slot-machinelike devices that can legally pay out noncash prizes.

Perry said he envisions a ban on eight-liners to accompany his legislation.

"The state of Texas is not benefiting one whit, and I look at ... video lottery terminals as a way to substantially decrease the amount of gambling that's going on in the state of Texas," he said.

I confess - I don't understand this at all. How can the legalization of VLTs lead to a decrease in gambling while at the same time provide a stable revenue source? I'm confused.

In the Legislature, gambling foes greet the governor's slot machine proposal, the latest in a growing list of legal games of chance, with a sense of resignation.

"It is just our hunger for more money," said state Rep. Warren Chisum, R-Pampa, an ardent gambling critic. "It's still a moral issue, but the voters have spoken, and the voters have said they want lottery gambling. This just makes it electronic."

State Rep. Arlene Wohlgemuth, R-Burleson, said she'll vote against the plan nevertheless.

"We all succumbed to, 'The lottery is going to fund education' several years ago," she said. "The video lottery terminals are just a hairsbreadth away from being casino gambling and is not going to be as beneficial as it is harmful. We're going to suffer from the revenue that we produce."

I think that's the smartest thing I've ever heard Arlene Wohlgemuth say. It also points up, once again, how unlikely it is that the Perry plan will become reality.

Posted by Charles Kuffner on April 21, 2004 to Budget ballyhoo | TrackBack

"The video lottery terminals are just a hairsbreadth away from being casino gambling and is not going to be as beneficial as it is harmful. We're going to suffer from the revenue that we produce."

Actually, a VLT is nothing more than a slot machine with a touch screen. Now that New York has made them part of their budget (Gov. Pataki wants to use the money to fund education - what a surprise.), it's only a matter of time before the reports about gambling addicts and "racinos" (VLTs at racetracks) come out.

VLTs are casino gambling as far as I'm concerned.

Posted by: William Hughes on April 21, 2004 12:33 PM

Is there a particular reason why we simply don't go to a "one big pot" model for school funding--everybody pays the same property taxes, it all goes into one state account, and then paid out to school districts equally by student?

I mean, equal expenditure for students as required by the state constitution is what Robin Hood is all about, right?

Local control of property tax rates in a Robin Hood world inevitably results in a race to the bottom, as well.

This is one of two states that has state-wide control of textbooks; local control of education is pretty illusory to begin with.

Texas is a big state. You can either deal with big issues or have a small government. You can't have both.

Not that I actually know anything about anything.

Posted by: Greg Morrow on April 21, 2004 12:56 PM

Thanks, Kuff, for a good post explaining what is going on. Your comments are spot on. It is the state supreme court that will have to be convinced that whatever plan emerges is equitable. That is why the property tax is the worst of all taxes to base a school equity plan on, unless it is, as the commenter above puts its, put in one big state pot and then divided eqitably. The Highland Park problem is intractable, unless the Highland Parks are made to contribute to other districts--the Robin Hood plan, in effect. Somehow, I doubt that the Court will let the "2 percent" just sit there off to the side, enjoying their $13,000 of revenue per student, while everybody else grubs. Since all states have some Highland Parks, most have had to confront this issue.


Posted by: charles on April 21, 2004 2:14 PM

I doubt an "Into the pot then out equally" would go over any better than a formal Robin Hood. Rich districts would still see more money going into the pot than they had coming out, which is the whole problem. Let's face it, the groups who oppose Robin Hood typically don't look much past the gates of their ultra-rich community. Framing it as some sort of Texas-wide initiative isn't likely to sway them.

I have to admit that I'm stunned at Perry's comments. We all know that Republicans think it's perfectly fine for the rich to get more than everyone else, but seeing someone phrase it as "Well, yes, these 2% of students get lots more than everyone else, but the other 98% are equal!" is ming-boggling in its (probably unintentional) honesty.

I wonder at what percentage inequality begins to matter? If that order-of-magnitude split happened at 5%, or 10%, or 20%, would he say the same thing?

Posted by: Buhallin on April 21, 2004 3:49 PM

Living in Alief, it's difficult for me to avoid eight-liners and I get to see first hand their effects.

First, as they are currently set up in most places, you get almost the same payback dumping your money down the nearest storm drain. Typical Vegas slots run 90-95% payback, typical Alief eight-liners run 60-65%. As an acquaintance told told a cop, "You aren't gambling. You know you're going to lose."

Secondly, if you believe the "they only payoff in prizes" bs, I've got some land south of Key West you might like. If they (the owners) know you, the prizes are green and have portraits of dead presidents on them.

Finally, I continually see people feed $200-$300 per night into them. They occasionally hit a jackpot and win a $200-250 but most nights, they play until the money's gone.

I'm not antigambling but eight liners are seriously in need of some regulation. Unfortunately, state regulation will mean state taxes which will drive the payout even lower. Personally, I'd be happy to see them totally banned.

Posted by: Charles M on April 21, 2004 4:05 PM