Texas Legislature Gavels In: Bathrooms Out, Property Taxes and Schools In

State Rep. Dennis Bonnen took the gavel as Speaker of the House yesterday, and asked for cooperation across the aisles (Photo courtesy Rep. Bonnen’s Facebook page).

Bathrooms? That’s so 2017. The new hot legislative priorities lighting up Austin this legislative session are school finance and property taxes.

Think I’m kidding? New House Speaker Dennis Bonnen put it on a cup — actually, every cup in the Senate lounge is now emblazoned with “School Finance Reform, The Time Is Now.”

The session gaveled in knowing already that state Comptroller Glenn Hegar had told them that they would have about 8.1 percent more in funding available for public programs like schools and healthcare in the next two years, for about a $119.1 billion state budget. But he also cautioned legislators that they wouldn’t be able to make it rain — oil prices are falling and the U.S. economy is uncertain, leaving any prognostication as to how revenue will look a bit muddled.

But one couldn’t help but notice a sense of cooperation in both houses of the state legislature, one not generally felt in the last session, where Lt. Gov. Dan Patrick embarked on a much-lamented quest for passage of a bathroom bill and school vouchers, both of which failed.

Bonnen, in his address Tuesday, made a plea for more bipartisanship.

“In a state as big and diverse as Texas, there are plenty of ideas about what we should do on any one issue and these ideas often point in different directions,” Bonnen said. “It’s our job to reconcile the differences.”

The makeup of the two bodies is also different this time around. Democrats gained 12 seats in the house last November, with Republicans holding the Texas House with 83 seats to Democrats’ 67. In the Senate, there are 19 Republicans and 12 Democrats. Thanks to the three-fifths rule, a kill on an unpopular GOP bill like a bathroom bill would be just one Republican renegade away, unlike the last session, when the Democrats were outnumbered 20 to 10.

This pivot away from the unpopular bathroom bill, especially (Patrick even called it “settled” when asked about it Wednesday), bodes well for proponents of retooling public education finance, as well as property owners looking for relief from rising property taxes.

And why? The two are inextricably linked. We’ve explained before — as the state contribution to public education funding drops, the dependence on local property taxes inevitably increases, because districts are faced with draconian cuts that impact the quality of the education they offer, or are faced with repeatedly coming back to the property owner well to ask for tax ratification elections.

Even 10 years ago, the state-funded almost 49 percent of public education monies. This year, it was 38 percent, with the Texas Education Agency projecting that number dwindling further.

Something was going to have to give, and I believe that November’s election results made that crystal clear — as evidenced by a renewed push to address school finance. The legislature’s own panel has called for the state to invest $1.7 billion in public education this session, with specific call outs to literacy and teacher pay. Another $3 billion is needed for special education, which has been drubbed on a state level for artificially capping the number of students needing supports.

House Joint Resolution 24, filed by Rep. Charlie Geren (R-Fort Worth), would bring the matter to the voters in the form of a state constitutional amendment that would require Texas to pay at least 50 percent of public school funding.

And House Bill 443, filed by Rep. Morgan Meyer (R-Dallas), would adjust the recapture formula that determines how much property-rich districts (like Highland Park ISD and Dallas ISD) must pay to the state, and would prevent a district from spending more than it did the year prior on operational costs.

Two bills would also address a common refrain from urban districts like Dallas ISD and Houston ISD — that charter schools pull students away from the districts, creating a decrease in funding, which is calculated on a per-pupil basis.

HB 528, filed by Rep. Harold Dutton (D-Houston), would include charter school students in the enrollment numbers for the district the charter is in, increasing the funding for the school district.

Rep. Mary Gonzalez (D-Clint) filed HB 127, which would change the way charter schools receive state funding. Charters would receive the same amount as the local school district under the bill, whereas currently, the school gets the average amount of what traditional public schools typically get.

Governor Greg Abbott has also made the tandem efforts to improve state funding and provide property tax relief his leitmotif for the legislative session. He provided a report prior to the session’s start that explained his ideas, which includes replicating a Dallas ISD program — Accelerating Campus Excellence — that would give stipends to high-quality teachers working in at-risk schools, as well as rewarding districts that meet state benchmarks for economically disadvantaged students.

But the plan also calls for a cap on increasing local property taxes that has some education advocates worried. Abbott proposes capping the increase in property tax revenue school districts can collect per year to 2.5 percent, which would cause tax rates to decline. Abbott says the shortfall would be made up by state funds but doesn’t explicitly state how that would happen.

Bear in mind, this cap is not a cap on what you and I pay DCAD every year — this is the total Dallas ISD collects. Basically, my taxes could increase 8 percent next year, but if overall the assessments in Dallas ISD are only up by 2.5 percent, the district can keep its tax rate the same.

Make sense? No? Hi. It’s Texas.

The concern is that once you begin poking into appropriations requests filed by the TEA in light of the tax rate cap, things don’t exactly jibe — and the governor isn’t explaining how to rectify that. The TEA presentation (which we have covered before) forecasts a 6.7 percent growth in property tax revenue per year — compared to the cap that Abbott’s plan would place on that growth, of 2. 5 percent.

That could mean a shortfall of almost $4 billion that Abbott promises would be made up by the state — repeatedly. Advocates are worried because, in a state whose legislature has consistently refused to take up school finance in a meaningful way, property tax caps could pass while school finance doesn’t, leaving school districts facing gaping holes in their pockets, and no way to fix it.

And if you’re starting with a repeated $4 billion shortfall, you also have to ask — how do I pay for the other things we say we want to do, like universal pre-K, teacher raises, improving the teacher pension system, and assistance for homeless and impoverished students?

Chris Tackett has a great rundown of how that would work, by the way, if you want to get into the nuts and bolts. And he has a rather alarming 10-year stat when it comes that shortfall.

“If the Governor’s 2.5% Tax Revenue cap was in place for the past 10 years, the additional dollars that the state would have had to make up, just to keep our school districts even (cities and counties would have their own costs not included here), would have been approximately $30 Billion,” he writes.

Hooboy.

Hopefully, the congenial atmosphere the state legislators left with yesterday carries through the entire session, because it sounds as if we may be in for quite the debate. Hopefully, they’re taking their leadership’s words to heart.

“Let’s be sure when we adjourn sine die we leave this House and this state better than we found it,” Bonnen said. “There’s a saying we have in Texas: As Texas goes, so goes the nation.”

The 86th Legislature runs from Jan. 8 to May 27.

Bethany Erickson is the education and public policy writer for CandysDirt.com. She is also the Director of Audience Engagement for Candy’s Media. She is a member of the Online News Association, the Education Writers Association, the International Academy of Digital Arts and Sciences, the National Association of Real Estate Editors, and the Society of Professional Journalists, and is the 2018 NAREE Gold winner for best series and a 2018 Dallas Press Club Hugh Aynsworth Award winner. Contact her at bethany@candysdirt.com.