April 29, 2009
Get ready for the next school funding lawsuit

The handwriting is on the wall.

Property tax cuts and a stingy state budget have left many Texas school districts saying they are short-changing children and warning of another lawsuit attempt to force reforms.

Texas lawmakers plan to increase school spending, but a skeptical education community isn't sure it will be enough to cover costs or close growing funding gaps between school districts.

Lawmakers cut property taxes three years ago in school finance changes ordered by the Texas Supreme Court, largely freezing school revenue at 2006 levels. Today, school funding has grown dramatically less equitable and an estimated 40 percent of the state's 1,040 school districts are running deficits, requiring them to dip into reserve funds.

A recent report by the non-partisan Legislative Budget Board indicates school funding is more inequitable today than it was when lawmakers reformed the system.


"We have people in desperate straits," said Wayne Pierce, head of the Equity Center, which represents about 900 low- and mid-property-wealth districts.

"There's a good chance, if they don't do this right, people who have held off in filing a lawsuit will start thinking seriously about it," Pierce said.

I forget where I came across it, but I recently saw an observation that the state of Texas has never embarked on school finance reform without being forced to do so by a lawsuit first. I don't know about you, but I think that's a lousy way to do business.

As state law has forced local tax rates down to a maximum of $1.04 per $100 property valuation for maintenance and operations, poorer districts are getting less total revenue unless they persuade voters to raise taxes.

Committees in both the Senate and House are considering school finance bills, including a plan by Sen. Leticia Van de Putte, D-San Antonio, that has been embraced by school districts.

It has a larger price tag than the one Rep. Scott Hochberg, D-Houston, is pushing in the House, or than another one by Senate Public Education Chair Florence Shapiro, R-Plano.

"I don't think school districts in Texas will ever get all the money they need," said Hochberg.

"I'm particularly concerned that we are still under-funding what it takes for a school district to be successful with the most challenging kids," he said.

So as we ponder the billions of dollars we've spent on property tax cuts and not spent on fixing and improving our schools, here's a report from McKinsey about the economic impact of the education gap, via Matt Yglesias:

-- If the United States had in recent years closed the gap between its educational achievement levels and those of better-performing nations such as Finland and Korea, GDP in 2008 could have been $1.3 trillion to $2.3 trillion higher. This represents 9 to 16 percent of GDP.

-- If the gap between black and Latino student performance and white student performance had been similarly narrowed, GDP in 2008 would have been between $310 billion and $525 billion higher, or 2 to 4 percent of GDP. The magnitude of this impact will rise in the years ahead as demographic shifts result in blacks and Latinos becoming a larger proportion of the population and workforce.

--If the gap between low-income students and the rest had been similarly narrowed, GDP in 2008 would have been $400 billion to $670 billion higher, or 3 to 5 percent of GDP.

--If the gap between America's low-performing states and the rest had been similarly narrowed, GDP in 2008 would have been $425 billion to $700 billion higher, or 3 to 5 percent of GDP.

Emphasis in original. All these achievements could have been realized with a far smaller investment than the payoff. How much better shape would we be in today if we truly recognized the value of high quality schooling for everyone? This is a far, far better job creation engine than the Texas Enterprise Fund, and yet our Governor, who claims to be all about economic growth and job creation, would never consider making the kind of investment in public schools that would yield these results. And so we get what we don't pay for, and we wonder why school finance reform is always on the agenda.

Posted by Charles Kuffner on April 29, 2009 to Budget ballyhoo
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