SEN. NELSON: “We need a whole new method of school finance.”

“No more Band-Aids. Start over” to reform school-finance system

Texas Insider Report: AUSTIN, Texas – “The opportunity is huge for us to get it right. We need a whole new method of school finance. No more Band-Aids. Start over,” said Jane Nelson, chairwoman of the Senate Finance Committee in a surprise move to intensify the debate over public education funding in Texas.

Sen. Jane Nelson (at right, R-Flower Mound,) says the Senate Finance Committee will move aggressively to devise an overhaul of Texas’ public school funding system. In late January, Senate budget-writers took the first step toward making sweeping reforms in the way the state funds its local schools.

With an official mandate to “start with a clean slate,” seven members of the Senate Finance Committee have now been tasked with coming up with recommendations for an entirely new funding system by early May. They seek to address a situation that has spurred decades of court fights over equity between rich and poor school districts, efficencies in the delivery of public education, and a growing chorus of taxpayer howls over rising local school taxes, as the state cut its share of funding.

Senate Education Committee Chairman Larry Taylor (left,) who was selected by Nelson to lead the Senate study, said the timing is right for a top-to-bottom review.

“They’ve actually cleared the air for us to come and do a meaningful reform,” Taylor said, comparing the current system to building a small lake cabin that is added onto over the years, eventually becoming a complex hodgepodge of rooms.

All aspects of school funding are expected to be on the table for discussion, thanks to the Supreme Court’s ruling that did not throw out the old system, but instead challenged the Legislature to come up with a new funding method. When the Texas Supreme Court turned back the latest attempt to have the system declared unconstitutional last year, Justice Don Willett called it a “Byzantine” system that “is undeniably imperfect, with immense room for improvement.”

The House is expected to follow suit. In its initial budget made public in mid-January, the House proposed an additional $1.5 billion in school funding tied to reform of the school finance system.

Few legislators fully understand it, and Texas consistently ranks in the bottom tier in per-pupil spending on education nationally. Currently, state budget writers are in the midst a state budget crunch fueled in part by a downturn in the oil and gas sector.

Existing method

Through previous attempts over the decades to address the school funding system, proposed changes have provoked nasty fights in Austin. Districts that benefit from the system are loathe to change it, and those that don’t fight to get more money.

The state’s school finance system has been the subject of multiple lawsuits and court orders since the 1980’s, and is generally regarded as a complex tangle of funding formulas, apportionment ratios, and thick policies that have been adjusted many times since the system was established during the 1940’s.

Including all funds, public education costs make up about $55 billion of the state’s two-year, $209.4 billion budget.

The current “recapture system” is based on the premise of Robin Hood, taking from the rich and giving to the poor in order to balance funding levels in disparate school districts across the state.

Nelson said any recommendations from the special panel will be included in the Senate version of the budget, if they can be focused into a workable policy in time. As the special panel looks at reforms, the finance committee began work toward the end of January to fund the existing school-financing method, including the Texas Education Agency.

Two big issues facing Legislature

Nelson called school-finance reform one of the two main issues facing the Legislature, as it attempts to craft a new two-year budget with at least $3 billion less to spend than is provided in the current budget.

The other is the skyrocketing cost of health care, which Nelson named a second committee study, charging it to come up with a plan to contain costs, while maintaining necessary services between agencies and programs.

The state spends about $60 billion in all funds on Medicaid every two years.

“There have to be ways we can control this, and that may include some changes that I think we will see in Washington on this issue. I think there are innovations that we can bring to our system in Texas that will help us cut these costs. We’ve got to get this under control,” Nelson said.

Many analysts and Austin political prognosticators are unsure whether overhauling Texas’ school finance system can be done in one legislative session.

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