A weekly Texas Legislative Update will be provided in Serving You based on the issues in the Chamber’s published Legislative Priorities. The priorities were developed by Chamber members based on feedback from the membership and testimony from state leaders. Click here for the Chamber’s Legislative Priorities and click here to view the Chamber’s bill tracker recording the bills the Chamber is following.

The 86th Texas Legislature is in its 9th week and has passed a major milestone. March 8, the 60th day of the 140 day session, was the deadline for filing unrestricted bills and joint resolutions, other than local bills, emergency appropriations, and emergency matters submitted by the governor. To date, 8,705 bills have been filed.

School finance reform is one of the top two priorities, along with property tax relief, in this legislative session. Both the House of Representatives and the Senate have filed bills addressing school finance, and seeing as how there are some vital differences, the final outcome will need to be debated out if any significant legislation is going to happen this session.

Why is school finance reform a priority? Well actually it’s been a priority for decades but unfortunately, no one has been able to find a fix. The problem is in how public schools are funded.

The state guarantees a certain amount of money ($5,140 currently) for each student. School districts get money from two sources – local property taxes and the state. Districts first use property tax revenue to cover their budgets and the state pays the balance. As property values have increased, the state’s share of education funding has decreased. Currently the state covers about 36 percent of education funding.

With population growth, increased demand on school districts, and no change to the funding formula in decades, Texas schools are not being adequately or equitably funded. Not to mention the whole Robin Hood/recapture issue where property wealthy school districts give millions of dollars to the state (Comal ISD is scheduled to pay more than $7 million this year) so that the state can distribute that money to property poor districts, although not all of the recapture money actually goes to education funding.

All of these factors, plus many more, have led to an education funding system that badly needs to be overhauled. The legislature has all but guaranteed a fix this year. There is still much that needs to happen to make that a reality.

The House filed their school finance reform bill on March 5 with more than 100 House members, both republicans and democrats, signing on as co-authors of HB 3. The proposal seeks to address three main priorities: teacher pay, property tax reform, and school finance reform.

It would increase the base funding per student by $890 to $6,030, the first increase in four years. It would also compress all school districts’ tax rates by 4 cents per $100 of taxable property value so that a homeowner with $250,000 in taxable value would save about $100 annually. In addition it would reduce Robin Hood payments by $3 billion, help fund full-day pre-K for eligible students, and require districts to meet a higher minimum base pay for teachers, counselors, librarians, and nurses, It would also provide funding for merit-based pay for teachers where educators are scored on their performance and the higher the teacher is rated, the more they are paid.

The Senate has taken a different approach. It first unanimously passed a bill providing an across the board $5,000 pay raise to teachers and librarians. This would cost approximately $4 billion over the next two years. Opponents to the bill argue that local school districts should have the power to use the additional funding for the individual needs of their districts instead of it being mandated for a required pay raise for all teachers, and it should include counselors, administrators, and support staff.

In addition to the pay raise bill, the Senate also filed a school finance reform bill although it was incomplete and included some placeholder information. The bill seeks to fund full-day pre-K, incentivize school districts to improve their third-grade reading performance, offer money for teacher merit pay, and increase funding for low-income students. Another Senate bill would give homeowners a larger mandated exemption from local school district taxes.

While the House sought to address property tax reform and school finance reform in one comprehensive bill, the Senate instead introduced three different bills all addressing a different component of this complex issue. One of the big sticking points may end up being the $5,000 teacher raise. While there are many differences in the bills and the approaches, there is one constant – everyone knows something has to change.

Next week, we’ll stick with the school theme and take a closer look into the school start date issue that has a direct and tangible impact on our local economy.