Transcript Slide 1

Funding Public Education
F. Scott McCown, Executive Director
[email protected]
Center for Public Policy Priorities
www.cppp.org
July 2011
The Legislature Cut Spending
on Public Education
Underfunded Current Law
• Formula Funding
• Target Revenue
Subtotal
Cut Grant Aid
$2.5 Billion
$1.5 Billion
$4.0 Billion
$1.4 Billion
Schools are down roughly $1,000
per pupil, unless local taxes go up
What They Knew
and When They Knew it:
The 2006 School Tax Cut
Created A Structural Deficit
In 2006, the Fiscal Note said that for 2008-2009:
Predicted Cost of Property Tax Reduction
Predicted Amount of New Revenue
Predicted Shortfall
$14.2 B
$ 8.3 B
$ 5.9 B
And then the gap grew:
Our $10 Billion Structural Deficit
Bill $
Legislature Left Money
in Rainy Day Fund
• RDF is designed to pay for ongoing expenses during
an economic recession
• Contrary to the spin, the Legislature did not spend or
commit the RDF—over $6.5 billion remains
unappropriated and some project $9.5 billion
• The Legislature even rejected the contingent use of
the RDF
– Howard Amendment would have been spent RDF
to fund enrollment growth
– But only the amount above $6.4 billion already
projected to be in fund at end of 2013
– And only to the extent needed to fund enrollment
growth, but not more than $2.2 billion
Legislature Abandoned
Historical Commitment
to Fund Schools
• Created Regular Program Allotment
Adjustment Factor—change in philosophy
• Allows legislature to adjust funding by a
multiplier that produces an across the board cut
• This is done through appropriations rather than
through regular lawmaking
• Rep. Patrick’s Amendment eliminates this trick
after they write 2014-15 budget
• Watch out for an extension
Equity is a Sword, not a Shield.
• Every Texas student is equally valuable
to us and therefore we should invest in
each of them equally
• Every Texas student ought to have
same opportunity
• $5.5 billion in Target Revenue
– A Measure of Need, not Inefficiency
• Requiring equitable funding is the only
way to produce adequate funding
Examples of Inequity
Same...
Location
Size
Tax Rate
Revenue
District
Tax Rate*
Revenue**
Alamo Heights
$1.04
$6,243
San Antonio
$1.04
$5,036
Glen Rose
$0.825
$8,424
Diboll
$1.04
$4,881
Austin
$1.079
$6,171
Amarillo
$1.08
$5,094
Lamar Cons.
$1.02
$5,475
Calallen
$1.17
$5,475
Courtesy of Equity Center
Local Property Taxes Alone
Can’t Make up the Cut
• At maximum tax rate of $1.17, schools
could only raise about $2.4 billion in
new revenue
• More than a fifth of the districts are
already at the maximum rate of $1.17
• Some districts can’t pass an election,
which is required for any increase over
$1.04.
The Legislature Has Choices
• Increase Property Taxes
– ($0.10 about $1.7 billion)
• Increase Sales Tax Rate or Expand Base
– ($0.01 about $3.2 b on current base)
• Eliminate Tax Loopholes ($2 b?)
• Fix Business Tax ($2 b?)
• Enact Healthy Texas Taxes
– Increase cigarettes a buck a pack for about
$1.5 billion
– New penny an ounce sugar-loaded
beverage tax for about $2.5 billion