Pulling Your Lege

Well, if blogger is done eating posts, it's time to get down to the business of the Legislature, as only they can, er...manage it. I've put off dealing with the hot topic of the session, but it is time to finally discuss school finance.

First, let's back up and do a little history. This is by no means the first time the Lege has stepped into this quagmire. By my count, this is the fifth straight session in which they have attempted to deal with the issue. If you've been following this little gem, you know that it is largely a quagmire of their own making. The basic issue is the inequitable distribution of resources to the schools. That results mainly from the fact that Texas permits individual independent school districts to fund their schools disproportionately through local property taxes. Thus, rich districts have rich schools, and poor districts are SOL. The ladies and gentlemen of the Lege might have been just fine with that arrangement, as they've never been proponents of fair fights. But those nasty judges kept getting in the way, insisting that equity was a principle of something called the Kawnstetooshun.

Thus was born the system (and I use that word advisedly) known as 'Robin Hood'. The court mandated that the legislature devise a method of providing equity. The Lege, no fools they, knew that anything called an 'income tax' would be likely to separate them from their public positions, so after a series of attempts that were found lacking by the courts, they finally instituted a scheme in which property-rich school districts were required to donate part of their revenues to a fund that was then distributed to property-poor districts. In order to accomplish that without giving up separate pools for men's and women's water polo teams, many rich districts found themselves taxing their property at very near the state-mandated limit of 1.5% (that's $1.50 for every $100 valuation, for the mathematically challenged). Well, there are many bankers and accountants living in those districts, and they felt that such rates of taxation were downright abusive; on a $500,000 house, they would be forced to provide close to $7,500 a year for their children's education. Why, someone with a $2 million house might be forced to lay off the upstairs maid. Then the courts ruled that the state contribution to school finance was insufficient, and ordered the state to provide an additional $4.8 billion.

So, what to do for the new Republican majority? Well, let's be honest. We all know what they wanted to do. The problem for them is, of course, that they would need an excuse, because their preferred alternative would not be popular. According to Jenny LaCoste-Caputo of the San Antonio Express News (story dated March 12), Gov. Perry and Republican Legislative leaders went to the Hoover Foundation, a noted right-wing think tank at Stanford University in California, to ask the Foundation's Koret Task Force to write a report detailing how Texas' education system ought to be overhauled. The legislation that has actually been written, enshrined in HB 2 and HB 3, does not merely rely upon that report for support, but actually uses its language, often word for word. From this source come both the substance and the "framing" (Don't Think of an Elephant!) for ideas like rolling back local property tax rates, establishing a system of financial accountability for districts, freeing exemplary schools from state regulation and phasing in computer-assisted testing for state-standardized tests. Cal Jillison, professor of political science at SMU said "The think tanks and policy analysis groups are not there to do public service. They're there to push a point of view."

Both HB 2 (dealing with educational appropriations and reform) and HB 3 (dealing with the tax structure) have passed the House, largely on party-line votes. A small number of Republicans crossed over to vote with the Democrats, but overall discipline was enforced by the Speaker (Rep. Tom Craddick, R-Midland). A particularly revealing event occurred during a vote on an ammendment to HB 2, introduced by Rep. Garnet Coleman (D-Houston). The ammendment would have changed language that empowers the state education commissioner to turn hundreds of struggling schools over to private, for-profit education companies like Edison Schools, Inc. Edison and other private education companies have failed students across the country. In fact, at least 20 school districts in Texas and elsewhere have severed ties with Edison because the company's schools performed so poorly. The vote by electronic device favored the ammendment, 73-70, but regressive Republican House leaders, taking a page from Tom DeLay, rustled up 4 Republican members whose "machines had malfunctioned" (another argument for voter-verified paper ballots!), reversing the outcome.

Following the HB 2 vote in the House, Texas Freedom Network president Kathy Miller said "Many legislators essentially admitted today that the standards and accountability they've been touting all session don't matter. The reality is that they are gutting the very standards - like small class sizes, certified teachers and early reading intervention - that made exemplary schools and their students successful in the first place." Rep. Jessica Farrar (D-Houston) noted the bill's reluctance to pay teachers more in general, but rather focuses on "... "merit" pay to teachers based on their student's performance on testing thereby increasing our focus on testing rather than teaching."

So, what about the tax side of the equation? Republicans like to tout their credentials as both budget balancers (the evidence of the ages not withstanding) and tax reducers. Surprise! HB 3 does neither. Rep. Farrar, in agreement with nonpartisan budget analysts, says that HB 3 provides only $3 billion in new funding, and that's before accounting for the cost of the new mandates included in HB 2. Last week, state comptroller Carole Keeton Strayhorn announced that the total shortfall is right around $4 billion. Craddick accuses Strayhorn of just wanting to embarrass Perry, against whom she plans to run for Governor next year. No doubt that's partly right, but the numbers don't lie.

Meanwhile, doesn't the bill reduce property taxes? Well, yes, maybe. Nevermind that the Democratic alternative bill would have reduced property taxes even more, while increasing spending on education by $6 billion in new money. HB 3 as adopted by the House reduces the state mandated limit from 1.5% to 1.0%. That means that if your school district is now near the limit, you could see your property tax reduced by as much as 1/3. If you own a $50,000 house, that translates to, at most, a savings of $250 a year. If you own a $500,000 house, however, you're looking at $2,500 a year saved. Of course, if your district is only taxing at 1.1%, your savings would be only 1/5 of those amounts.

But the Lege had to make up the difference in income to the school redistribution fund. So, HB 3 also raises the state sales tax, already the highest in the country, by 1%, to 7.25%. That tax is one of the most regressive available; it falls most heavily on those who spend a large portion of their income on goods, that is, on working folk. For someone with a $50,000 house and, say, a $40,000 a year income, of which half is spent on taxable items, that 1% sales tax increase costs $200 a year, essentially wiping out the property tax reduction. In exchange, you get kids who are more poorly educated, but, hey--the private school companies will do ok.

But that's not the end of the story. The hits just keep rolling on this sorry excuse for the people's business. In HB 3, the regressive Republicans introduce a new "payroll tax", sort of a back-door income tax. This will require businesses to pay 1.15% on each employee's salary, up to $90,000 per employee. So, relatively speaking, it would cost a business more to hire a teller than a bank vice-president, for example. The House was generous enough to amend this proposal to allow businesses to opt to either pay this tax or the current franchise tax.

So, where does this smoke and mirrors show go from here? Well, it goes to the Senate. Many have predicted that changes will be made in both pieces of legislation, and it could be that Lt. Gov. David Dewhurst, who runs the Senate, would like to play good cop by eliminating some of the more egregious problems. But he is on the horns of a dilemma. Already, the Senate is on the verge of passing a budget resolution that refuses to raise taxes, in direct contradiction to the House passed bills. There is much speculation that part of the "fix" could be at the expense of teachers. That should help education in Texas.

There is, of course, still time. Our Senator is Kel Seliger, the one-time mayor of Amarillo. His wife is rumored to be interested in serving on the city commission, perhaps in 2007. He needs to hear that we favor school finance legislation that actually has some hope of financing functional schools, without doing so on the backs of those least able to help. We need public education, not "public" schools run by private companies. We need progressive taxation to provide proper funding for those schools, and teacher salaries that are competitive and decoupled from testing requirements. Sen. Seliger's capitol address is: P.O. Box 12068, Austin, Texas 78711. His phone number is: (512) 463-0131. His local Amarillo phone number is: 374-8994. He can be emailed on the web by clicking here. You can also email Lt. Gov. Dewhurst.

Fortunately, even though they have no time to truly fix the school funding debacle, we can rest assured that our heroic Lege is struggling with the really big issues. While the rest of us have our minds stuck in the trivial, they have figured out how to solve the playoff system for Division IA football.

DEMOPHOENIX