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Texas Senate takes first step toward school finance overhaul

The Senate has tasked a new budget working group with coming up with ways to overhaul the state's school finance system.

Senate Committee on Education Chairman Sen. Larry Taylor R-Friendswood during a Aug 3, 2016 hearing

Leaders in the Texas Senate are vowing to find ways to overhaul the state’s school finance system, saying a recent Texas Supreme Court decision granted them a prime opportunity to shake up the heavily criticized status quo.

On Monday, they announced the creation of a Senate budget working group — led by Friendswood Republican Larry Taylor — to tackle the issue. That group will work with the Senate Education Committee, which Taylor chairs, to propose replacements for the current school finance system.

“The opportunity is huge for us to get it right,” said Jane Nelson, chairwoman of the Senate’s powerful Finance Committee. “We need a whole new method of school finance.”

They'll face an uphill climb in a session where legislators face several obstacles to major reform, not the least of which is money. The announcement comes a week after the Senate unveiled its preliminary budget, which did not include additional funding for public education.

During the Finance Committee’s first hearing of the 2017 legislative session on Monday, Nelson, R-Flower Mound, advised the newly formed working group to “start with a clean slate” in recommending a new school finance scheme. “It should be less complicated, innovative and should meet the needs of our students,” she added.

The current system funds Texas public school districts arbitrarily and inequitably across the state and is held together by short-term fixes that have not been revisited in decades. Educators have repeatedly asserted the funding formulas do not provide them with enough money to meet the state's academic standards. 

In May, the Texas Supreme Court upheld the state's existing funding system as constitutional, and at the same time tasked state legislators with reforming it. 

"We're left with a question mark as to what this effort will mean by the Senate," said Lynn Moak, a school finance expert at the Austin-based consulting firm Moak, Casey & Associates. The main question is "whether they're trying to reform school finance within existing dollars or looking for possible additional dollars to fund the system."

Nelson last week unveiled the Senate’s $213.4 billion two-year budget proposal, calling it a bare-bones starting point for financial discussions in what promises to be a particularly tight-fisted year. That proposal did not touch funding formulas for public education.

The House’s base budget — also released last week — included an additional $1.5 billion that could be spent on public education only if the Legislature reforms the school finance system.

Monday’s announcement signaled the Senate’s strong willingness to pursue an overhaul. Nelson called it one of the two most important issues facing the Finance Committee, along with addressing health care spending. She also appointed a working group to draw up proposals on containing fast-rising health care costs. 

The issues "deserve a deep dive,” she said, “and that begins today."

Some of her colleagues seemed skeptical that the school finance working group would be open-minded. Sen. John Whitmire, D-Houston, asked Taylor: "Are you willing to put everything on the table as an alternative to current funding mechanisms?”

Taylor said yes — and called it a boon that the state Supreme Court did not force the state to come up with a specific plan to fix the school finance system. "They've actually cleared the air for us to come and do a meaningful reform," Taylor said.

The Texas Education Agency will testify before the Senate Finance Committee on Tuesday morning.

Read more about school finance:

  • With funding tighter than the previous legislative session, lawmakers are not expected to inject much more money into public education. For now, some are backing a plan to increase money to all school districts through the general appropriations bill.
  • In May, the Texas Supreme Court issued a ruling upholding the state’s public school funding system as constitutional, while asserting it could be better.

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Public education 85th Legislative Session Larry Taylor School finance