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School finance report offers no easy solutions

January 9, 2019

The $1.7 billion question heading into the 86th Texas Legislature — which kicked off Tuesday — is how the state will pay for the long awaited recommendations from the Texas Commission on Public School Finance.

Action on the revamping of the state’s troubled school finance system was placed on hold two years ago to allow a state-appointed panel to review the problem. The group’s mission is now complete.

The 13-member commission, which includes state Rep. Diego Bernal, D-San Antonio, took great pains to ensure the language in the report did not assess blame on the state for spending inadequacies for public education and it took no firm position on funding sources for the possible changes listed.

The commission has produced 35 detailed recommendations on how existing education funds can be reallocated and where new money is needed. Included in the report is a short list of where state budget writers might go looking for new revenue. Bottom line: It clearly places that hot-button issue squarely back in the Texas Legislature’s court. The Legislature must make this its top priority.

The commission’s 165-page report came after a yearlong review of the status of the state’s public school finance system, including more than 80 hours of testimony from more than 155 individuals representing 19 school districts.

The startling statistical information gathered by the commission is not new. We have seen bits and pieces of the information trickle in slowly over the course of time, but having it compiled in this comprehensive report underscores just what a mess the current public school finance structure has created.

Education officials often tout the gains the state has made increasing high school graduation rates in the last decade. Yes, we can celebrate that 90 percent of Texas high school students graduate within four years, but is it really cause for jubilation if less than 40 percent of those students are ready for a post-graduation education and require remedial courses once they get to college?

It is encouraging to see the commission recommend an alignment of PK-12 education goals with the state’s higher education goals. This has been long overdue. It only makes sense the state should aim to increase third-grade reading levels and increase college readiness among high school graduates to 60 percent by the year 2030. This dovetails well with the 60x30TX Higher Education Plan’s overarching goal to increase the percentage of 25- to 34-year-old Texans who hold a certificate or degree.

Getting the 5.4 million public school students in Texas — roughly 10 percent of the schoolchildren in the country — to these higher achievement levels will take some doing when only 58 percent of Texas students begin their education ready for kindergarten and only four in 10 students met the state’s third grade reading standard last year.

Texas spends about $60 billion a year on public education from federal, local and state sources. The commission found those precious dollars are being allocated “in part by funding formulas and allotments that are not only complex, but are also outdated, inefficient and unaligned with the substantially evolving needs of Texas’s K-12 population.”

The commission recommends a restructuring of the state’s funding formulas and allow for an increased investment in low-income and other historically underperforming students to address that.

The commission is also recommending reallocation of funds and an infusion of new money to address early-childhood education needs, increase third-grade reading skills, increase college readiness among high school graduates and improve teacher pay.

The funding suggestions the commission offers include diverting projected increases in sales tax and oil severance tax revenue — designated to go into the state’s rainy day fund — to education and property tax reform. The commission also recommends expanding the tax base to include internet sales associated with out-of-state vendors.

In an appendix to the report, the group list some other suggestions discussed. Those included increases to the alcohol beverage and gas taxes and expansion of the sales tax base to include legal, accounting, architectural, engineering, financial, marketing research, public opinion polling, display advertising and public relations services — all currently tax exempt.

All these things — and perhaps more — should be on the table at this legislature. There are some tough political decisions ahead as new education revenue sources are considered. Simply reshuffling existing funds and grandstanding to impress the voters back home is not going to cut it this time. State leaders must find the political fortitude necessary to address the longstanding inequities in our public school funding system.

Texas school children have been waiting long enough. Get to work, legislators.

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