Preliminary Look at Public School Funding in the State Budget

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In the state budget deal for 2014-15 that’s still a few pieces short of being finalized by the 83rd Legislature, public education would see a 7 percent biennial increase, from $52 billion in 2012-13 to $56 billion in 2014-15.  General Revenue support for public education would rise by 8 percent in SB 1, or 8.5 percent with additional dollars in another appropriations bill (HB 1025). Still, even with robust assumptions about increases in local support for schools, real spending per student would continue to be considerably below the pre-recession levels seen from 2002 to 2008.

Of total public education spending, the lion’s share, $40 billion, would be provided through school finance formulas known as the Foundation School Program, or as “entitlement” funding. FSP spending in the state budget would grow by 6.7% compared to the 2012-13 budget. Another $3.9 billion would support the Teacher Retirement System (up 5% from 2012-13). Outside the Foundation School Program, most grants to school districts, such as for prekindergarten expansion, would remain at the lower levels they were cut to by the 2011 legislature.

HB 1025 would provide $202 million (about $21 annually per student in average daily attendance) in additional support for the Foundation School Program, but the funding was made contingent by the Senate on passage of both SJR 1 (constitutional creation of a fund for the state water plan) and HB 7 (System Benefit Fund fee rebates). The House’s rejection of Senate changes to HB 1025 led to one last impasse in the complicated 2013 budget process, leaving $202 million in school funding and potentially the entire budget deal unresolved as of Friday afternoon. Around 7 PM Friday evening, the HB 1025 conferees were rumored to have cut the tie between HB 1025 and HB 7, but the Governor raised objections to another part of HB 1025 that freed up General Revenue for budget-writers’ other priorities. Stay tuned for updates.

The chart below shows what SB 1 and HB 1025 would provide for the Foundation School Program, grants to school districts, and other state and federal education dollars appropriated to the Texas Education Agency, along with estimated local property taxes, after adjusting for student growth and inflation. SB 1 assumes that local property tax support for schools will rise by 4.77 percent in tax year 2013 (affecting state fiscal 2014 and 2015) and 4.03 percent in tax year 2014 (state fiscal 2015 and 2016).

Public Ed Spending

At the Center for Public Policy Priorities, we believe in a Texas that offers everyone the chance to compete and succeed in life. We envision a Texas where everyone is healthy, well-educated, and financially secure. We want the best Texas - a proud state that sets the bar nationally by expanding opportunity for all. CPPP is an independent public policy organization that uses data and analysis to advocate for solutions that enable Texans of all backgrounds to reach their full potential. We dare Texas to be the best state for hard-working people and their families.


  • Ms. Castro:

    Anyone reading the side-by-side articles in the AAS today would tend to believe that two different legislative sessions were being discussed rather than only one. Both sides had plenty about which to complain; but personally, I think that it is disengenuous to use code phrases like ‘missed investment opportunities by legislators’ (i.e., higher spending/growing government) that would require increasing taxes on some group of Texans to avoid an unbalanced budget.

    And, although your organization is self-designated as “nonpartisan,” it clearly is not! (Even the AAS recognizes that!) Please explain why is it that the leftist answer to budgetary problems is to ALWAYS throw more money at it, rather that to seriously look at cutting bloated budgets and staff FIRST.

    The 2-year state budget was increased by 26 percent (~$22 billion) over the 2011 budget, a budget whereREAL cuts were necessary to balance the budget (sort of). There just never seems to be enough spending on social services to mollify liberals.

    As education funding seems to be your topic de jour, you could promote an increase in per-child funding via a reduction in top-heavy administrative costs and by cutting wasteful spending in areas that do not directly affect a
    basic 3-R, social studies and science curricula. You’d think that the CPPP would be ecstatic that the number of standardized tests have been reduced…because that will give educators a lot more time to actually teach their core subject rather than just trying to “teach to the test.”

    And, if you want to improve the overall educational system, get out there and advocate strongly for a return of disciplinary authority to the teachers…the authority to control classroom behavior by removing chronic disrupters permanently. (The rest of the class, those that want to learn, would surely be grateful…and be better prepared to move forward to the next grade level.) Without a doubt, this one change would be the best thing that could happen “for the children” and equiping them to become successful adults.

    Finally, please provide some clarification about what you refer to as “tax giveaways” — “more than $1billion in new state tax cuts, some of which GROW (emphasis added) more costly in 2016 and after.” There seems to be a conflict between this assessment and that of Arlene Wohlgemoth at the Texas Public Policy Foundation. She speaks of $714 million in tax relief for Texas businesses, but laments that “almost half of of this tax cut expires in 2016 with less than $200 million per year of the tax cut being permanent.” (These descriptions of the Legislature’s actions do not sound the same. Please explain.)

    The courtesy of a response would be appreciated.

    R. L. Green 03.06.2013
    • R. L. Green — apologies for the delayed response.

      “Investment opportunities” is in fact a better way to describe what the 83rd Legislature passed up by not restoring per-pupil spending to pre-recession levels or implementing the Affordable Care Act Medicaid expansion for low-income adults (and thereby increasing the chance their children will be insured). Research shows that healthier children do better in school, and better-educated young adults will in turn offer a higher return on investment as future workers and business owners.

      “Higher spending,” “bigger government,” and “throw more money at it” would seem to me to be the disingenuous terms, certainly in a low-spending state like Texas. After properly adjusting for student or client growth and higher costs, state budget support for schools, Medicaid, and other major services will remain below levels seen a decade ago. The $22 billion growth figure you mention is not supported by any Legislative Budget Board documents I’ve seen. General Revenue budget growth between biennia, taking into account the so-called 2013 “Medicaid IOU” funding which the legislature purposefully left out of the 2011 appropriations act, is $7.6 billion, or 8.7%. Biennial All Funds growth, if the water plan funding is approved by voters this November, would be $16 billion, or 8.4%. (To put that in context, 8% to 9% is what has been historically needed just to keep up with population and inflation.)

      Rather than true “growth,” CPPP and various education and health care coalitions were primarily advocating for the undoing of the 2011 budget cuts — all of which could have been done within available revenue, and with no tax increase in the regular session. That said, CPPP has long advocated structural reforms in our state and local taxes, so that state taxes at least keep pace with the changing economy, instead of becoming a smaller and smaller share of GSP over time, which in turn leaves local property taxpayers to pay for the lion’s share of public services. The ACA Medicaid expansion would also have helped reduce the pressure on local property taxes that are currently paying for indigent care and other health services for uninsured Texans.

      The chart above shows that in 2014-15, real per-student spending is budgeted at almost the same levels seen in the 2012-13 biennium. Unfortunately, fiscal years 2012 and 2013 were a time when almost 21,000 school employees (teachers, administrators, support staff) lost their jobs because of the 2011 budget cuts, and grade-school classroom overcrowding reached an unprecedented level. Equity in the distribution of state aid was a priority for the 83rd Legislature, but adequate funding took a back seat to other budget priorities, and to tax cuts. (See for more information on the tax cuts.)

      In effect, “wait and see what the courts say” is the school finance approach seen to date. Decreasing the emphasis on standardized tests* and end-of-course exams definitely helps, as you point out, but it’s no substitute for adequate staffing of our public schools.

      *HB 5 awaits the governor’s signature.

      Eva DeLuna Castro 10.06.2013

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