“A good start; now It’s time for action”: School Finance Commission releases final report

The Texas Public School Finance Commission adopted its final report on December 19, 2018. The commission met all year, with CPPP closely involved, to develop recommendations for the 2019 Legislature around supporting the needs of our state’s 5.4 million public school students.
“These recommendations are a good start toward remodeling our school finance system, with some exceptions. Now it’s time for action from the Legislature,” said Ann Beeson, CEO of the Center for Public Policy Priorities. “Texas is a wealthy state, and we can afford to fund public education to ensure the prosperity of our young people far into the future.”
Positive recommendations from the bipartisan Commission include:

  • An increase in base level funding, which will improve funding for all districts while equitably reducing recapture.
  • Long-overdue formula clean-up recommendations.
  • Additional funding for campuses with high concentrations of low-income students.

Misguided or misplaced recommendations include:

  • Outcomes-based accountability adjustments, which would tie student performance to school funding instead of established costs.
  • Outcomes-based funding, which would use the performance of today’s student to determine the level of investment in tomorrow’s students.
  • Additional funding for educator effectiveness and dual language services provide opportunities to urban school districts, while leaving rural districts behind.

If implemented by the Legislature, will the School Finance Commission funding recommendations lead to better student outcomes?
Any evaluation of a school finance plan must begin with the basic understanding that money matters. If we want to see better results for low-income kids and English Language Learners, better graduation rates, more college ready students, smaller class sizes, increased teacher quality, and enrichment programs for an increasingly diverse global market, then the Legislature needs to provide adequate and equitable funding. Potential funding options could take the form of full-day Pre-K funding for currently eligible students, increased funding for special student populations, or an across-the-board increase in the basic allotment.
The Commission recommended an increase in base level funding, which would improve funding for all districts while equitably reducing recapture, a positive step forward. CPPP appreciates the Commission’s recommendation that “Any new resources injected into the school finance system for the 2020-21 biennium should come from diversified, reliable funding streams to ensure the sustainability of these reforms, with all existing and new funding not utilized for these reforms and other recommendations contained herein designated for needed statutory increases in the Basic Allotment in the 2020-21 biennium beyond its current level of $5,140.” CPPP is also pleased that the Commission included many of our recommendations in section L, including using projected revenue growth, the Economic Stabilization Fund, and eliminating certain tax exclusions.

Ultimately, the Commission acknowledges that more money is needed in the system. The Commission did not recommend specific revenue streams or take any real action to determine actual costs to provide a high-quality education. The current level of per-student funding (the “basic allotment”) is a completely arbitrary number not tied to any established cost. That leaves more work for the Legislature in the upcoming session.
If implemented by the Legislature, will the School Finance Commission recommendations provide more equity for low-income students?
CPPP appreciates the long-overdue formula clean-up recommendations from the Commission’s expenditures workgroup. We cannot stress enough the importance of removing decades-old hold harmless provisions that are not based on actual costs but on political deals that have undermined equity for way too long. We commend the Commission for recommending additional funding for campuses with high concentrations of low-income students to address the greater needs of these schools.
On the negative side, however, the Commission recommends outcomes-based accountability adjustments, tying student performance to school funding. Such adjustments belong within the existing school accountability system, and not the school finance system. Outcomes-based funding, which uses the performance of today’s student to determine the level of investment in tomorrow’s students rather than providing today’s students the resources needed to be successful today, is arbitrary and inefficient. It is not student-based or cost-based. Many of the outcomes-based funding recommendations are based on the admirable improvements seen within Dallas ISD. However, our rural school districts and those battling teacher shortages would be unable to fully access the proposed additional funding for educator effectiveness and this would inevitably lead to inequitable results.
What is the relationship between school finance reform and property taxes in the School Finance Commission recommendations?
While the Commission did not explicitly endorse a plan to reduce property taxes, three options are included in the final report. Meaningful investments by the state to increase its share of school funding will naturally slow the growth of both property tax rates and recapture. We are concerned that the inclusion of property tax reduction proposals not tied to significant additional funding signals the urgency of state leadership to prioritize tax cuts over kids. Most concerning is the Governor’s tax cut proposal, which favors wealthy school districts and would result in poorer districts having to tax at much higher rates to get a similar amount of revenue.

Conclusion and Next Steps:
“Texas kids deserve better than arbitrary funding levels, and any commission studying public school finance should use reliable research and data to identify the true cost of educating our students,” said Chandra Villanueva, Economic Opportunity Program Director for CPPP. “School finance changes should improve equity so that all school districts have access to similar levels of revenue at similar tax rates so that children across backgrounds and ZIP codes can receive sufficient resources and a high-quality education.”
“We applaud the hard work that went into these recommendations, but ultimately the 2019 Legislature will have the final say on remodeling our school finance system and capitalizing on this rare opportunity to accomplish meaningful reforms,” said Luis Figueroa, Legislative and Policy Director for CPPP. “We encourage our lawmakers to build off the School Finance Commission’s better recommendations and invest in our future workforce.”

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