On April 20th, the House took up HB 21, which proposed three main changes for our school finance system.
First, it provides much needed relief to our schools contributing to the “Robin Hood” by allowing them to keep more of the money collected from their district rather than redistributing it around the state, while helping districts that received those redistributed funds from being harmed.
Second, it provided a buffer to help ease the blow to districts that would have been effected by the ending of several old funding programs that were already set to expire. There are three of those districts in HD20, all of which would be heavily affected should those programs simply disappear without some kind of soft landing, giving them time to adjust.
Finally, it ends the small school penalty the state currently places on small rural schools, of which HD20 has many.
While all three changes were for maintaining high quality education in HD20, it is not without some issues that need to be discussed. Chief among them, how the $2 Billion price tag, which still doesn’t come close to covering the $5 Billion in cuts made to public education in 2011, will affect the current budget.
As I discussed in my previous column, I have concerns with the version of the budget produced by the Texas Senate.
Imagine you are renting a room in your house, and your tenant decides to pay late one month, then tells you that they will always pay their rent late from now on. You would never accept that deal, you would demand that they pay their back rent and get on a timely schedule. The “pay late plan” is essentially what the Senate put forward.
An amendment to the Texas Constitution in 2015 requires the legislature put money toward infrastructure investments monthly. The Senate found the needed $2 Billion in revenue to balance their budget by, like the late paying tenant, manipulating the due date to avoid making the first payment towards the infrastructure investments required by the Texas Constitution.
While the correct solution would have been to cut our spending enough to balance the budget, the House version of the budget did the next best thing, taking the extra money out of the state’s savings account, just like any responsible family would do in the same situation.
So how does House Bill 21 fit into all of this? Well, state budgets often contain what are called “contingency provisions”. Since a state budget covers the next two years, we can’t perfectly plan for everything, so we have contingency provisions that tell the Comptroller, the elected official in charge of writing checks on behalf of the state, what to do in certain situations.
House Bill 21 is a perfect example. Even though we passed it out of the House, we do not yet know if it will pass the Senate or be signed by the Governor. There is no way to know if such a large-scale bill will pass, so the budget is written so that the Comptroller knows what to do either way.
The House chose to put a contingency rider into the budget so that, should HB21 become law, it would delay the last Foundation School Program payment of the 2018-2019 biennium to the 2020-2021 biennium. That may sound a lot like the maneuver in the Senate budget, but there are a few major differences.
First, HB21’s delayed last payment is already required by law to be made in the next biennium, so you make 23 payments one cycle and 25 payments the following cycle. It has been used before and, while it is by no means the perfect option, it is vastly superior to the Senate plan, which makes the deferral of payment permanent.
Second, the payment deferral in HB 21 only happens if HB 21 passes into law. If it doesn’t pass, all payments to the Foundation School Program will go on as normal. The Senate permanent deferral is built into the budget as a way of pretending there is no need to take money from savings.
Finally, HB21 delays payment into the Foundation School Program, a large fund that has a buffer built into it in case this kind of action is required. This is already allowed under current law, has been used before, and is always paid back. In contrast, the Senate’s budget voids the first payment on infrastructure investments, that 83% of voters in 2015 supported.
While I don’t like either option, and I would prefer the prioritization and budget discipline I wrote about last time, the obvious choice between the two options was the one that had to be paid back, would not directly flout the will of the voters, and may never have to happen in the first place.
The budget is now in the hands of the conference committee. I hope they will find the wisdom to solve our budget issues though prioritization and budget cuts, but if that is not the case, I ask that you continue to keep in touch with your HD20 staff as we examine the final version of the budget. Your input matters, and it will be vital in making the biggest decision of the session.
You can reach your HD20 office at (512) 463-0309 or by email at terry.wilson@house.texas.gov. We look forward to hearing from you.
