School Finance 101
Dr. Howell Wright

Saturday, March 12, 2011, may end up becoming an important day for public school education. On that day over 12,000 parents, students, grandparents, teachers, support personnel, school board members and administrators came together on the steps of the Texas State Capitol to take a stand for funding public schools. The speeches and student performances were awesome, but the real message was sent by the large number of participants that got the attention of some state legislators.

Why were people willing to give up an entire Saturday to rally for public schools? The proposed cuts to the education budget are so large that most school districts will be required to reduce their staff by numerous people in order to balance their budgets. The most recent (as of March 11) proposed cuts to Rockdale ISD are over $1 million each year for the next two years. When put in personnel costs, that is more than 40 professional positions that would have to be cut over the next two years for us to balance our budget. Obviously, that would result in program cuts, larger class size and reduced services in a time with a new assessment and a more difficult accountability system.

How did the State of Texas get in this mess? In 2006, the governor signed House Bill 1 that was designed to get the state out of a school finance lawsuit and at the same time, reduce property tax rates by 33 percent. The bill relied on other forms of revenue to make up for the loss of tax dollars. This is also the bill that only allowed for districts to receive a set dollar amount per student based on the district’s 2005 values (Rockdale ISD was below the state average in 2005). Funding is based on this amount each year no matter how many dollars local taxpayers provide.

For every dollar a local taxpayer provides, the state deducts a dollar of state funding. The State Comptroller, Carol Keeton Strayhorn, realized that this bill was going to cause Texas taxpayers a problem in the near future. She wrote the governor a letter forecasting a $23 billion shortfall by 2011 (she was only $4 billion short) and that the business tax designed to overcome the shortfall of the loss of property taxes was an unconstitutional tax. The failure of the business tax to live up to its design continuously causes a several billion dollar shortfall every two years, unless the legislature corrects their 2006 mistake. Another reason for the current and projected shortfall is the national recession. When combined, the loss of sales tax dollars from the recession and the failed 2006 school finance bill equal a loss of $27 billion necessary to run Texas.

How do we get out of this mess? In 1988, Texans approved the development of the Economic Stabilization Fund (The Rainy Day Fund) to protect Texas taxpayers in difficult economic times. The current governor has used all of the Rainy Day Fund twice to balance the state budget. This year, there is about $9.4 billion in the fund. Last week, the governor agreed to use a little over $3 billion to pay our 2011 bills, but he stated that he will veto any bill that uses any dollars from the Rainy Day Fund for 2012-13 fiscal years. By the way, the Rainy Day Fund receives 75 percent of the oil and gas severance taxes each year, so it has the ability to replenish itself a minimum of $1.3 billion each year.

If the legislature were to delay the July and August payments to schools, use one-third of the Rainy Day Fund for the current budget year and one-third for the next biennium ( leaving an estimated $3 billion for the 2014- 15 biennium), the current budget shortfall to schools will be more manageable and will not cause the drastic personnel cuts all schools are considering.

Legislators listen to their local constituents and contacting them with your views on the use of the Rainy Day Fund to support public schools is very helpful. The men that represent us are Representative Charles Schwertner, M.D. and Senator Steve Ogden. Their contact information is listed below:

The Honorable Steve Ogden

Texas State Senate

P. O. Box 12068

Austin, TX 78711

The Honorable Charles Schwertner, M.D. 

Texas House of Representatives

P. O. Box 2910

Austin, TX 78768

Click here for digital edition
2011-03-24 digital edition

Copyright 2009-2018 Rockdale Reporter, All Rights Reserved.

Special Sections

Special Sections