Random Thoughts about Texas' School Finance MORASS

"See then that you walk circumspectly, not as fools but as wise,"
Ephesians 5:15

TPPF recently released a report and held a policy primer on the ongoing mess that is school finance.  We read the former and attended the latter.  We offer the following thoughts in no particular order except how they appear in our notes:

• Between local property taxes (47%), state spending (43%), and federal spending (11%) Texas spends a total of $61 BILLION per year on 'education.' (1, 21)

• There's a difference between 'equity' for school districts and 'equity' for individual students. (1)

• In coming years, the debt service for school districts is going to EXPLODE!!! (3)

• "Public free schools" means open to everyone, not that the government has to have government employees explicitly provide the service.
• "In other words, the Legislature is free to craft the means by which the public is educated, as long as its solution meets the requirements of the Texas Constitution." (6)

• Efficiency = Little waste (6).

• Current system was originally designed in 1949; as a matter of perspective, the first credit cards were introduced a decade later. (7)
• Obviously, the legislature and the courts have mucked around with that system since then.

• The "Permanent School Fund" is a $30 Billion entity split between the General Land Office and the State Board of Education; IT LOOKS LIKE A GIGANTIC BOONDOGGLE!!! (9)
• We have a GIGANTIC fund sitting there that's barely touched.
• Interestingly enough, it predates the civil war.

• "Permanent School Fund" is also used to guarantee school district debt. (9)
• What could POSSIBLY go wrong?!?
• Currently guaranteeing "2,869 school district bonds, which have an outstanding principal balance of $58.1 billion" that becomes $96 billion when you factor in interest.
• "In the event of default, the PSF pays the principal and interest of the overdue bond or loan." (10)

• How much bureaucracy is involved in this process?!?
• "The [Foundation School Fund] is an account within the General Revenue Fund that is used for funding public education.  As Figure 4 illustrates, the FSF serves as a pipeline connecting General Revenue and Dedicated Taxes to schools.  The amount of money deposited into the FSF is determined primarily by the legislative appropriations process and is appropriated to the Texas Education Agency (TEA), which manages day-to-day administration of the fund.  The Legislature establishes funding formulas that determine how FSF money is divided among districts, and those formulas form the basis for estimating how much the Legislature should spend each biennium on education.  After estimated revenue from statutorily dedicated taxes is determined, the outstanding balance is filled from General Revenue." (13)

• "Property taxes collected by school districts contribute the largest share of revenue to Texas public education." (17)

• Everytime one of these reform efforts bubbles up, they always want to tinker with the funding formulas but they never try to decrease spending.

• There's something called the "cost of education index" that's supposed to remedy "geographic variation"; looks like another scam. (25)

• "Texas students are -- by law -- funded unequally." (28)

• Once again, how much bureaucracy?!?
• "Each school district must establish a committee for each special education student, the members of which are: the student and his parents and teachers; a school district representative; and a representative of the agency that will pay for the student services." (31)

• Speaking of bureaucracy:
• "Transportation is provided through four programs" (33)

• "Practically speaking, the [Guaranteed Yield Program] acts as an incentive to increase local property tax rates to maximize state funding." (40)

• "Total debt in 1992 was $9.8 billion; by 2014 it was $68.4 billion in real 1992 dollars" (41)

• Despite all this, we still "don't know how much it costs to educate a student." (49)

• "An efficient system would produce results with prices that limit waste and free parents to maximize their child's educational benefits." (52)

• "The current funding systemtn has been cobbled together over the years based solely on what works politically." (52)

• School district payrolls and debt service are both going up.

• A government monopoly is, by definition, inefficient.

• An 'equitable' system could save the state a billion dollars a year without any other underlying reforms.

• At today's policy primer, Dan Huberty said the school districts were right to sue the state.

• Again at today's primer, when Jeff Judson compared the current school finance system to giving government run grocery stores the money to run the food stamp program, Huberty got all butthurt and refused to answer what he called Judson's "loaded" question.