Texas Accepts New Plan To Reform School Funding

'Share the wealth' system has averted court takeover of schools

THE Texas Legislature's plan to meet court-ordered school funding reforms passed a major hurdle Monday when the new plan was accepted by a state district judge as constitutional - until proved otherwise. Gov. Ann Richards (D), signed the new $1.3 billion plan into law just minutes before the court hearing, thus averting a court takeover of the schools.

But in the next few weeks, the plan could face even more court challenges from school districts unhappy with the new "share the wealth" system.

Even state lawmakers, who must now find $1.3 billion to pay for the plan, aren't pleased with the bill and the 15 percent - or greater - jump in property taxes expected to accompany the bill's Sept. 1 start date.

"No one is entirely satisfied with the bill, but at least the state maintained control of the public schools," says John Bender, press secretary to Speaker of the Texas House Gib Lewis.

Texas's school funding problems gained national attention in 1989, when a unanimous state Supreme Court ruled the public-school funding system unconstitutional due to extreme disparities in per-pupil spending.

Reliance on local property taxes has resulted in inequalities among Texas's 1,052 school districts. While districts with high property wealth are able to raise funds easily while taxing at modest levels, property-poor districts have to tax at much higher rates and still cannot raise as much money as property-rich districts.

While at one time the state provided close to 90 percent of a district's school funds, over the years state funds have fallen, leaving districts to make up the difference by raising local property taxes, says James Vasquez, superintendent of the Edgewood district in San Antonio and the original plaintiff in the school funding battle. "The state has not held up its end," he says.

The new plan groups Texas's 1,052 school districts into 188 education districts, patterned after county lines, and sets up a two-tiered funding system. For the first tier, each school district must levy a minimum tax of 72 cents per $100 of property value for the 1991-92 school year, rising to $1 by 1994. These funds are then "recaptured" from individual districts and distributed among all districts within the county. The state contributes funds to the first tier to ensure a basic allotment of $2,200 pe r student, growing to $2,800 by 1994.

For the second tier, the state contributes funds based on additional local tax effort, and these funds will remain in the local district. Districts can levy up to 45 cents above the mandated tax rate for "enrichment" - additional programs, teacher salaries, and funding for facilities.

Already a group of property-poor districts, plaintiff-intervenors in the courtcase, has advised its member districts to contest the bill on two points, says Craig Foster, executive director of the group. He feels facilities funding should be included in the first tier. Many property-poor districts have incurred bond debt for facilities construction and will be forced to pay debts with money that should go for enrichment.

Also, Mr. Foster says the bill lacks a clear standard of what defines statewide equity. "The basic allotment is higher, and that's good, but I can't see that [the allotment] is based on any principle other than what money might be available," he says.

Texas ranks 43rd in the nation in education spending. Even with an increase in per-pupil spending, Texas will still be below the national average, says Charles Slater, superintendent of the Alamo Heights district in San Antonio. The irony is that Alamo Heights, the only district in San Antonio that will lose money under the new plan, is the only district currently meeting the national average of per pupil spending, at $5,000 per student.

Under the new plan, this autumn Alamo Heights's per-pupil spending will drop from $5,000 per child to $4,100. Three million of the district's $17 million budget will be redistributed to other districts in Bexar County.

In order to maintain current spending levels, Alamo Heights would have to raise its property taxes from $1.05 to $1.28 per $100 this September.

Dr. Slater and other districts scheduled to lose money are considering challenging the recapture method to see if it is constitutional. While Slater feels statewide equity is needed, the answer is not a short-sighted, "dummy down" plan.

"The bill is underfunded to begin with," Dr. Slater says. "If we're spending at the national average and have to reduce our spending, what does that say about the state's priorities?"