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School Finance Deal Running Out of Time

Photo by Bob Daemmrich, Texas Tribune
Sen. Florence Shapiro (l), R-Plano, visits with Health & Human Services Committee chairman Sen. Jane Nelson on May 3, 2011

he House and Senate must agree on how to distribute the $4 billion reduction in state public education funding by 5 p.m. today, say Sen. Florence Shapiro, R-Plano, and Rep. Charlie Geren, R-River Oaks.

"The thing that I'm most concerned about is, if we don't come up with something, what are the schools going to do?" Shapiro asked. "We really are in a very precarious period of time."

After rejecting an initial proposal from the House late last night, the Senate sent a counteroffer back across the dome, which members there are currently considering.

On the House floor, Democrats questioned the leadership about whether a deal had been reached, and said they were worried about whether they would have enough time to examine a plan over the weekend. 

Any rewrite of school funding formulas has to happen in SB 1811, the legislation generating non-tax revenue in the form of deferrals and accelerated tax payments that's essential to balancing the budget.

But negotiators have struggled to reach the school finance deal critical to avoiding a special session. House members favor a short-term solution put forward by Public Education Chairman Rob Eissler, R-The Woodlands, that would keep current law in place and enact the same percentage cut — the most recent figure puts that at 6 percent — to all districts across the board. That would happen through the process known under current law as “proration” and leave any significant policy changes addressing the target revenue system until next session. (The target revenue system is a funding mechanism created by the Legislature in 2006 when it reduced property tax rates. It means that some districts aren’t funded on a cost-based model, but rather what they received per student that year.)

The problem with any one-size-fits-all approach, according to the Equity Center, a research and lobbying organization that advocates on behalf of poorer districts, is that it does the most damage to districts that have the least. A 6 percent reduction could barely make a dent in the budget of a wealthy district while forcing serious restructuring in one that is already cash-strapped.

That’s why the Senate isn’t ready to give up on longer-term adjustments to school funding. Shapiro's proposal distributes the cuts on a sliding scale across districts, making deeper reductions to those that have benefited most from the target revenue system. And it makes a commitment to eliminating it completely by 2017.

Shapiro said Thursday that whatever comes out of the talks will be a "hybrid of the hybrid." A possibility: distributing $2 billion of the cuts through proration the first year, then taking $2 billion from target revenue reserves in the second.

Whether they can reach a compromise palatable to both bodies may depend on how much senators — including Sens. Robert Duncan, R- Lubbock, and Bob Deuell, R-Greenville, two SB 1811 conferees who have repeatedly stated the need to move away from target revenue — are willing to budge.

Morgan Smith was an editorial intern and columnist at Slate in Washington, D.C., before moving to Austin to enter law school at the University of Texas in 2008. (She has put her degree on hold to join the Tribune's staff.) A native of San Antonio, she has a bachelor's degree in English from Wellesley College.