Select Committee On TYC Proffers ‘No Confidence’ Vote On TYC Board

More as it develops.

TEA: The Check Is In The (E)Mail

The Texas Education Agency, by way of attempting to set an example for other government agencies, has put its check registere online (here).

Suffice it to say, it is as boring as three-day-old dry toast. I got through the “C’s” before I fell asleep. If I hadn’t dozed off in front of the computer and been awoken by the thud of my head against the monitor, I might have never been awakened. Seriously, this is so dull it will put you in a coma.

I actually thought, when I woke up, I had found a payment to some lobby group of something. It was a check to CDW Government for more than seven grand. Oh, but no. It’s some kind of educational software company or something. Yawn.

Most of the checks are for disbursments to public school districts and charter schools, with a few councils of government and various and sundry vendors thrown in for good measure, except for a nearly $5,000 check to the Raddison Hotel in San Antonio. (Ok, so I also skimmed the list looking for something interesting, too). Before you go panicking, though, it was probably for an educator’s conference. They have a lot of those, so it is a legitimate expenditure.

If we get some NoDoze, we’ll go through the rest of the list…you know, just to make sure they aren’t paying the Federalist Group $10,000 bucks a month or something.

Fair Funding: Not A Reality For Texas Southern & Prairie View

We hear a lot about “equity” in relation to public school finance—balancing out how much money property poor districts have access to versus how much money rich school districts have access to.

But, we don’t think a lot about equitable funding for Texas’ public colleges and universities.  However, there is a pretty wide disparity between what some of the state’s public universities receive and what others receive, both in terms of regular and special apprpriations.

Since this is an important issue, I hope to be bringing you some “hard numbers” on this in the coming days, specifically with regard to two schools Sen. Ellis and Rep. Coleman were discussing in a press conference today—Texas Southern University and Prairie View A&M University. We’ve all spent a lot of time talking about disparity of equity over the last few months with regard to elementary and secondary education, so perhaps it’s time to shift focus and take a look at post-secondary education funding.

Here are some snippits from Sen. Ellis’ statement released today after the press conference (after the jump):

Read more

School Finance Update; A New Lawsuit Looming?

On Thursday, Texas Governor Rick Perry signed another death warrant, except this time it was for Texas’ system of public education and was done via Perry’s signature on the school finance plans from the special session, as opposed to being for just another dull death row inmate.
According to Harvey Kronberg’s Quorum Report, attorneys for the state and the West Orange Cove plaintiffs are trying to figure out if they have to file the plan with the court, where to file it, if they have to file it and just about everything else related.

In the meantime, I’ve heard from a longtime educator and consultant that either one or more groups of the same participants in this school finance suit and/or possibly an entirely new group of schoo plaintiffs pissed off about this package are contemplating heading to court to start the long road to determining if, in fact, this plan sucks, too. However, there is some question relating to whether or not they may have to wait a full school year or more for all of the funding changes and new funding formulas to actually be seen in action.

I’ve also been told (by another party) that some of the groups of anti-tax wingnuts are trying to find a way to get the state into court over various aspects of the tax plan. I’ll keep you posted on that.

The Fix Is In, But Will It Work?

Now that the Legislature has passed and the Governor will presumably sign the Texas Tax Reform Commission’s proposals which have been billed as the fix that will allow the state to meet the Texas Supreme Court’s deadline of June 1 to come up with a school funding plan, the question has been raised of whether or not this fix will work.

The Dallas Morning News made a half-hearted attempt to answer the question over the weekend and talked to a number of experts in the field who offered differing opinions. While it talked to a lot of excellent experts like Scott McCowan who heard many of the Edgewood cases as a state district judge, there were scant references made to the Supreme Court’s actual opinion.

I went back and took a look at the actual opinion (.html; .pdf), rendered last November and was surprised at what I found. For one thing, it appears as though some of the early numbers batted around by the TTRC and the House ($1.33, remember $1.33?) were lifted straight from the Court’s decision with only minor edits.

I’ve excerpted a number of paragraphs from the Court’s decision and will endeavor to examine those in the context of the Legislature’s actions and some of what has been said about the legislation by those quoted in the DMN article and in other places.
First, let’s look at a few paragraphs that appear early in the court’s decision:

We held in Edgewood III that “[a]n ad valorem tax is a state tax when it is imposed directly by the State or when the State so completely controls the levy, assessment and disbursement of revenue, either directly or indirectly, that the authority employed is without meaningful discretion.

I’d suspect that if a verbatim transcript of every word said by anyone in the House during debate on the legislation were prepared, the phrase “meaningful discretion” would have appeared no less than 1,000 times.

I find that funny for a couple of reasons. First off, the Supreme Court grants that meaningful discretion is a very, very objective term:

Meaningful discretion cannot be quantified; it is an admittedly imprecise standard. But we think its application in this case is not a close question.

Let’s address those issues of of a “state tax” and “meaningful discretion.”  We heard a great deal about meaningful discretion from the Legislature. Though the words weren’t used, remember this exchange between Chisum and Coleman in the House:

Coleman: This bill puts not a penny into public schools when it works with every other bill that’s new, is that correct?
Chisum: No, because school districts can access three pennies…

Coleman: So they can acces three pennies, but it limits [access to funding] accept what’s in those…bills. There’s a hole in the tax cut.
Chisum: This whole bill is about spending the surplus…it doesn’t require a tax to work.

And, on the first day of the Session, when John Sharp addressed the House, he had this to say about ‘meaningful discretion,’:

…”We couldn’t wrap our arms around what meaningful discretion was…”

And, 30 days later, I still don’t think the Legislature wrapped its arms around ‘meaningful discretion,’ either. The plans that the Lege approved do not make it any less of it “not [being] a close question,” than the plan did before.

The stringent requirements on schools relating to raising additional local dollars and the limit on local dollars they can raise does not come close top providing menaingful discretion. Further, in a few short years, it will result in us being back where we started from with an unconstitutional tax.

Does the possibility of future unconstitutionality preclude court approval of the plan? No, but you can bet the court will take note of it, as they had previously. Again, from last year’s opinion:

We now hold, as did the district court, that local ad valorem taxes have become a state property tax in violation of article VIII, section 1-e, as we warned ten years ago they inevitably would, absent a change in course, which has not happened. [emphasis added]

Relating to this and harkening back to “meaningful discretion,” for a moment, consider this:

The Legislature, we said, is constitutionally obligated “to make suitable provision for a general diffusion of knowledge through free public schools”, and because it “has chosen to rely heavily on school districts to discharge its duty”, school districts must tax at levels necessary to achieve the constitutional mandate as well as to meet statutory accreditation standards that the Legislature has imposed to achieve a general diffusion of knowledge.

From the DMN article, relating to “Meaningful Discretion:”

“Is that enough?” Dr. Brooks asked. “The answer is no.”

That money, over time, will not produce the “vibrant curriculum that most people want.”

Scott McCown agrees. The director of the progressive Center for Public Policy Priorities, a former state district judge who presided over a key school finance lawsuit, said that the 4-cent range provided by the Legislature doesn’t put sufficient money into the school system.

“It’s like you took your son and said, ‘You have meaningful discretion to drive the car whenever you want, but there won’t be any gas in it,’ ” Mr. McCown said.

Here, again, we have something that was kind of addressed and kind of not addressed. The new money addresses that the school districts aren’t relied upon so heavily to discharge the constitutional duty to fund an education system of free public schools, but there are no new dollars to aide in meeting the constitutional mandate or statutory accreditation standards, or, at least, no significant new dollars. Rep. Chisum admitted this in debate on HB one:

“This bill has a guaranteed yield for Chapter 42 districts so they are yielding the same amount of pennies. Likewise, it has a hold harmless clause in here so that no school districts use any money.”

Still more:

If school districts are forced to tax at or near maximum rates to meet constitutional and statutory requirements, then control over local ad valorem tax rates and spending effectively shifts to the State, depriving school districts of any meaningful discretion to tax below the rate cap set by the State or to spend on programs other than those required by the State and the Constitution.  The result, we again warned as we had in Edgewood IV, would be a state ad valorem tax in violation of article VIII, section 1-e. Footnote  We concluded that the plaintiffs’ pleadings had fairly alleged that such a violation was occurring…

In debate in the House early on, we consistently heard talk about what the districts ‘new’ tax rates would be. I was bemused to, while reading the opinion, note that the “$1.30″ which was so hotly discussed during those first days seems to actually have come from the Court’d opinion with a slight difference, as the court actually mentioned $1.33:

To generate the same revenue per student that the FSP [that's Foundation School Program] guarantees to an average chapter 42 district that taxes at the maximum $1.50 rate, taking into account differences between Tier 1 and Tier 2 formulas, the average chapter 41 district need only tax at the rate of $1.33. A different comparison was made in Edgewood IV. There we calculated that to generate $3,500/WADA, which the trial court had found to be the cost of an adequate education — or in the words of article VII, section 1 of the Texas Constitution, “[a] general diffusion of knowledge” Footnote  — districts at or below the 15 percentile level of property value per student, averaging a $26.74 yield per $0.01 of tax, were required to tax at a $1.31 rate while districts at or above the 85 percentile level, averaging a $28.74 yield per $0.01 of tax, needed only a $1.22 rate.   The parties in this case have not attempted to replicate this calculation for current data.

From an earlier post:

The Sharp Commission plan would cut the tax rate in all school districts to $1.00 by tax year 2007 and permit districts to raise their local rates by up to 6 cents per year, up to a maximum rate of $1.30.

Here’s another passage from the opinion that I think is going to present some problems for the Legislature’s plans:

Also, many districts have been created as tax havens—lots of property and few students — allowing property owners to escape paying their fair share of the cost of public education in Texas and making it more difficult to achieve efficiency.

If I’m not mistaken, this isn’t something that’s been corrected. I think that some provisions in the plan may have, in fact, made this situation worse than it already is.

One area where the Lege might have made some progress was addressed in the court’s opinion below:

The State makes a few other contributions to public education finance besides the programs and allotments we have described. It paid districts $110 per student for the 2003-2004 school year, and it has funded other projects, like Head Start and the High School Completion Initiative. But 95% of all funds for public education flow through the Foundation School Program, including the IFA and the EDA, and are thereby equalized among the districts. The other 5% includes tax revenue that is not recaptured, taxes above the $1.50 M&O level in seven districts, and I&S tax revenue that exceeds the IFA and EDA yields or is not included under these allotments. On the whole, about 85% of the student population resides in districts with revenue equivalent to a district with $271,400/student.

While the state has increased its fair share, though, it increased its fair share only to the point that, combining that with local revenue, schools are only guaranteed as much money as they would have received under the old plan. While the surplus money, tobacco tax dollars, etc., bring new money into the mix, that new money is going to fund the same old stuff; the state has not actually added new dollars into the mix, only new money.

Finally, let’s look at this:

Borrowing from two statutory pronouncements, the district court concluded:

To fulfill the constitutional obligation to provide a general diffusion of knowledge, districts must provide “all Texas children . . . access to a quality education that enables them to achieve their potential and fully participate now and in the future in the social, economic, and educational opportunities of our state and nation.” Tex. Educ. Code § 4.001(a) (emphasis added). Districts satisfy this constitutional obligation when they provide all of their students with a meaningful opportunity to acquire the essential knowledge and skills reflected in . . . curriculum requirements . . . such that upon graduation, students are prepared to “continue to learn in postsecondary educational, training, or employment settings.” Tex. Educ. Code § 28.001 (emphasis added) . . . .

We agree, with one caveat. The public education system need not operate perfectly; it is adequate if districts are reasonably able to provide their students the access and opportunity the district court described.

Therein lies the “out” clause the Legislature must pray it’s met.

This new system is adequate if the districts are able to provide their students the access, “to a quality education that enables them to achieve their potential and fully participate now and in the future in the social, economic, and educational opportunities of our state and nation,” and the opportunity to “acquire the essential knowledge and skills reflected in . . . curriculum requirements . . . such that upon graduation, students are prepared to ‘continue to learn in postsecondary educational, training, or employment settings.’”

Within this, most assuredly, is the ‘out clause.’ The statutes cited withn that are pretty vague. So vague, in fact, I think they might require the court to actually allow this plan to be taken out for a spin, so to speak, for a year or two to actually determine whether they offer the “access” and “opportunity” that were at the heart of the District Court’s decision readily echoed by the Supreme Court.

Hand-in-hand with the “access and opportunity” clause of the Court’s decision lie the “dequacy and equity” mentions that go to the heart of meaningful discretion:

“The whole session has been about cutting taxes. This is a net tax cut of about $2.5 billion a year,” Mr. McCown said. “There will be less money for education down the line, not more.”

He expects that “adequacy, equity and meaningful discretion will all be back in play,” he said. “I think they’ll be back in court in a year.”

David Thompson, a lead attorney for school districts in the lawsuit that resulted in the Supreme Court’s ruling, said that the plan will definitely require monitoring on issues of adequacy and equity. Still, he said, the Legislature has “done something that is very significant, and I personally applaud them.”

This issue of tax relief brings up another interesting point: nowhere in all of the 88 pages of the Court’s opinion are the words “tax relief” or “property tax relief” found. If you don’t believe me, open up the documents and do a “find” for yourself.

Yet, the people of Texas have been misled to believe that the Supreme Court mandated a school finance fix that provided for property tax relief. Nothing could be further from the truth.

In fact, the Court’s opinion even commented on the failure of some of the poorer schools to utilize their local tax base to the fullest extent possible through the issuance of general revenue bonds:

There is much evidence that many districts’ facilities are inadequate, but it is undisputed that some 25% of the districts levy no I&S taxes.

Food for thought, no doubt.

Lege: No Time For Real Reform, But Time To Pander To The Far Right

From the ‘you’ve got to be kidding me‘ files:

The Texas House is poised to debate restricting embryonic stem cell research in some public university buildings.

Hello, hello! Any of you Republicans who want to pander to the church newsletter crowd back home realize we have a crisis going on here? Embryonic stem cell research has nothing to do with complying with the SCOTX decision.

What’s worse is the manner in which the author of the proposed amendment will get it off the ground:

Rep. Geanie Morrison, R-Victoria, chairwoman of the House Higher Education Committee, has told both sides that she will accept an amendment on the stem-cell issue to legislation she has filed to allow colleges and universities to issue bonds to pay for construction projects.

Woah, there cowgirl. Do we not forsee a time when maybe the rabid Republicans won’t be so rabid on this issue?

Furthermore, can we—for one—minute actually put real research and science over the “morality legislation” that Republicans in the Lege are so desparate to pass to show simply that they’ve accomplished something having to do with God and Jesus during every session?

The amendment would bar biomedical research at those newly constructed sites if federal funding is prohibited for the research. Under rules established by President Bush in 2001, federal money for embryonic stem cell research has been limited to previously established stem cell lines.

Of course, this will give the Rs a big, fat campaign issue this fall. Any Dem who votes against this can be tied to abortion ,et al, and the whole nine yards.
It will be best to dispose of this one ASAP.

Senate Democrats On Putting Taxes Over School Finance

The Senate Democratic Caucus has released a statement, which I highly recommend reading, concerning how some in the Lege are trying to put taxes over fixing schools. You can read it here.

Ways & Means Committee OKs Tax Plan

[[This must be why the Capitol was such a ghost town early yesterday evening: everyone wanted to get the hell out of town and away from this tax plan. ]]

Yesterday, the Ways and Means Committee OK’d the Perry/Sharp/TTRC proposals after changing them to make it tougher for local school boards to increase their tax rates after cuts are in place.

Just. Frigging. Great. Is there any more local control that can be taken from the situation? Will these new additions meet SCOTX muster? Who knows.

“It darn sure isn’t fair to the parents and the taxpayers in the rest of the state,” said Wayne Pierce of the Equity Center, which represents districts with low and moderate property values.

Keep in mind that districts with low and moderate property values are the majority of the school districts in the state of Texas. The ‘donor’ schools under share-the-wealth aren’t the majority.
Here’s more:

The Ways and Means Committee approved an 11 percent cut this fall in property taxes for school operations. It approved another tax cut in 2007 that could take property taxes down as much as the 33 percent Perry has proposed.

The size of that second-year tax cut depends on whether the House can pass the expanded business tax and a higher cigarette tax, among other measures, to replace the money that school districts would lose in a property-tax cut.

The committee will consider those tax increases today.

Proponents of the first-year tax cut billed it as a backup plan in case Perry’s complete tax overhaul fails, saying the tax cut would answer the Texas Supreme Court’s concern that school boards have little wiggle room in the tax rates they set. But it also could entice lawmakers who do not want to overhaul business taxes to stop there, instead of aiming for the larger property-tax cut in Perry’s plan.

You know, we might as well sit back and get ready for the worst. If this plan does pass the Lege, it will have been so tinkered-with there will be no chance whatsoever it’ll pass SCOTX muster. Keep in mind, too, others have already said the plan, as it is, won’t pass muster.

Waiting Until 2 P.M.; More Surplus Spells Disaster

The Special Session of the Texas Legislature gets underway this afternoon at 2 p.m. You can watch live feed from both chambers: House here and Senate here.

The Governor has finally issued the formal “Call” for the Special Session…a little late given that it starts today, but here’s what the Lege is allowed to consider and take action on during the session:

•To consider legislation that provides for school district property tax relief.
•To consider legislation that provides for modification of the franchise tax.
•To consider legislation that provides for modification of the motor vehicle sales and use tax.
•To consider legislation that provides for modification of the tax on tobacco products.
•To consider legislation that provides for an appropriation to the Texas Education Agency.

It’s basically what I expected to see. If you’re wondering what that motor vehicle sales and use tax stuff means, it’s a part of the TTRC/Sharp/Perry tax plan, though not one of the more “talked about” portions.

Once again, there is nothing on the call about real education reform. I expect to see either the Sharp plan approved with few changes (to the detriment of the state) or a total stalemate. Only time will tell, though. Here’s a round-up (via AP) of the five previous failed special sessions on school finance.
One thing of interest to note is that some believe Carole Keeton Strayhorn, the Republican Comptroller turned Independent candidate for Governor holds more cards than anyone else when it comes to what will happen with the special:

Under state law, the comptroller tells the Legislature how much money the state has – and legislators can’t spend a penny more.

That means Mrs. Strayhorn, who is challenging Gov. Rick Perry, controls the numbers in a special session that might reduce property taxes and make sure that schools open on time.

Or, to the governor’s detriment, might not.

“In this situation, she is the most powerful player,” said Republican consultant Royal Masset. “She controls the variable in this session – the spending limits.”

Strayhorn’s already pulled her usual “let’s change the surplus estimates” game, noting now that lawmakers will have $8.2 billion in unallocated revenue to play with as opposed to her earlier estimates of $4.3 billion. (Press Release, Updated Revenue Estimate)
To me, the more surplus avaliable, the more the potential for a public policy disaster.

Given that Republicans are so dead-set in favor of (a) relieving the tax burden and (b) school vouchers, I would not be surprised at all if we see some action on this. Given that school voucher funding could loosly be considered part of the TEA budget, someone may try to sneak something through. Or, hell, the Governor may make the deadly political mistake of adding that to the call later. Who knows?

But, the more surplus that the Republicans have to “relieve property tax burdens,” the less money is going to go into Health and Human Services programs, etc.

Back on the topic of One Tough Grandma, though, I’m wondering just how many times she can use her own name in the title of a press release, to wit:

You can click on the image or here for the full-sized graphic, but as you can see, it appears that OTG is hoping the media will start calling her revenue estimates and proposals the “Strayhorn Solution.” God save us all from that, though she makes a relvant point or two:

She called on the Governor to open the special session to teacher pay increases, fully restore the Children’s Health Insurance Program and other critical health care cuts, and build up the state’s Rainy Day Fund.

Here are her “namesake” solutions:

She said the Governor should open the session to long-term “Strayhorn Solutions” that will not increase taxes, but will provide revenue for the state:

• reinstate e-Texas Performance Reviews and the Texas School Performance Reviews;
• legalize Video Lottery Terminals;
• close corporate loopholes in the franchise tax law; and
• eliminate the taxpayer-funded Texas Enterprise Fund and Emerging Technology Fund

What the….? Legalize VLT? Number one, the Lege’s already gone down that road. Number two, trying to fund any government programs via sin taxes or gambling isn’t good public policy. The revenue generated from these things is not definate.

That she’s calling on Perry to eleminate the Texas Enterprise Fund (aka Slush Fund), shows she’s simply copycating what Democrats have been calling for all along. So, nothing really new from OTG here.

Finally, a point of interest from the revised Revenue Estimate. I haven’t had a chance to look over the whole thing, but this caught my eye:

Two factors will combine to cause U.S. economic growth to decelerate in fiscal 2006 and 2007.

First, rising household debt levels—coupled with increasing interest rates and higher minimum credit card payments—are expected to slow consumer spending. In 2005, the national personal savings rate fell below zero on an annual basis for the first time since the Great Depression. This means that some rebuilding in household savings—and retrenchment in consumer spending—can be expected, especially if the financial gains from rising house prices dissipate.

Second, overvalued housing prices and rising mortgage rates are expected to cool national-level housing sales and residential construction activity. By most accounts, housing prices in certain populous regions—particularly California, the Northeast, and Florida—are now significantly overvalued relative to household incomes. Nationally, new home sales—a bellwether of future housing activity—have dropped by 20 percent over the last several months, leading to the expectation that U.S. residential construction activity will fall significantly in 2006 and 2007. So far, this has not occurred in Texas, largely because of the sharp downturn in housing prices during the high-tech slump at the beginning of this decade.

It almost seems as though they’re saying, “Here’s this extra $7 billion to play with, but keep in mind that may get sucked down the drain as the economy goes farther and farther down the sink hole.”

Hmmm….

Taking From The Surplus: Is It A Good Idea

While John Sharp was busy telling people it is “safe” to take from the budget surplus to make the TTRC’s tax plan work, several key senators are noting it may be a dangerous idea:

Members of the Senate Select Committee on Education Reform and Public School Finance also raised questions about the other major revenue sources in the multibillion-dollar proposal — a proposed business-tax expansion and $1-a-pack increase on cigarettes.

State Sen. Florence Shapiro — who heads both the select committee and the standing Senate Education Committee — said senators have “high regard” for the proposal developed by a group of business leaders appointed by Perry and led by former comptroller John Sharp.

“But there’s also lots and lots and lots of questions,” said Shapiro, R-Plano, adding, “I’m very concerned about the surplus.”

…Shapiro said she has received calls from lawyers, doctors and dentists concerned over the tax that would newly apply to them.

“The cost of goods sold is a difficult piece to deal with when you are a service industry, because you don’t sell goods, you sell your service,” she said.

The property-tax cut also would be financed by the higher cigarette tax and use of a portion of an estimated $4.3 billion budget surplus. Democratic Sens. Eddie Lucio of Brownsville and Royce West of Dallas noted some would like to see at least a portion of a cigarette-tax increase used for health programs.

The use of the surplus drew particular concern from senators, who said the move could mean a budget challenge down the road. Their concern comes as some in the House are taking an opposing view by urging an even bigger use of the surplus to buy down property taxes.

“We all have to recognize that it is a one-time surplus,” Shapiro said. “You have to address that surplus every year from this day forward if you include that in any of your numbers.”

The proposal the first year would use about $1 billion of the estimated surplus. Sharp said it’s a traditional assumption that it’s safe to use 25 percent of a surplus, because natural budget growth will keep pace.

Sen. Robert Duncan said the plan would require lawmakers to come up with $1.4 billion annually after the first year to account for the surplus being used.

“So the next biennium we’ll be looking at a $2.8 billion appropriation … to make this balance,” said Duncan, R-Lubbock. “It all boils down to this whole big picture and how we make it all work in connection with … Medicaid costs, CHIP (Children’s Health Insurance Program) costs, criminal justice costs and everything else.”

Howard Wolf of Austin, a member of the tax-reform commission that developed the plan, said there was “great angst” about using any of the surplus. But he said members believe the business tax will raise more money than the $4 billion initially projected.

Lucio combined his concern over using the surplus in this way with his desire for also addressing measures meant to improve education.

Perry has said lawmakers must address the tax issue, as ordered by the court, before considering other education measures in the special session. The governor sets the special-session agenda.

“I really do not feel we should be using the surplus for property tax relief. If anything, we should use it — every bit of it — for public education reforms,” said Lucio, who supports a teacher pay raise and said schools also need funding to build classrooms.

I’m personally doubting, after this, that there is any chance the TTRC’s proposals will make it out of the Lege even reasonably intact. I knew there would be more trouble for the plan in the Senate (even from Dewhurst), but I think this shows the thoughts are pretty bipartisan.

In the House, full of more Mavericks but also more lock-step Perry Republicans, we may see either total chaos or total support. Only time will tell.

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