Wednesday, May 29, 2019

#TXLEGE: Larry Taylor's quiet revolution (Version 2.1) makes it across finish line

"And let us not grow weary while doing good, for in due season we shall reap if we do not lose heart."
Galatians 6:9

[Note: You can see our original piece "Larry Taylor's quiet revolution" piece from last session (aka. Version 1.0) here; you can see our piece from three weeks ago "Larry Taylor's quiet revolution (Version 2.0)" here.]

Over the past several days, we've been discussing the final version of the school finance bill with those we trust.  The type of unintended consequences we most feared seem...unlikely.  That being said, we stand by what we said Saturday:

[Note: A 72 hour "reading period" for the final version of any school finance bill is something we originally called for two years ago.]

Even with all that, however, for two years we've had two non-negotiable demands on any school finance bill:
  • Meaningful tax relief (aka. compression)
  • Whatever new spending does occur needs to go to the classroom, not the bureaucracy.
Given that criteria, it's hard to see the final version of the bill as anything other than a net win.

But that wasn't originally supposed to be...

...and the only reason that result emerged is because the Texas Senate, whatever their (many) other flaws this session, held firm.


Tax Stuff:

The original version of HB 3 provided miniscule tax relief.  The version of HB 3 that passed the Senate contained a meaningful amount.  The final version of HB 3 actually contains slightly more tax relief than the Senate version (through a different mechanism).

The only reason that happened is because Larry Taylor stared down Dan Huberty in that conference committee...and Dan Huberty blinked.

Period.  End of Story.

But here's where the final version of the bill is truly revolutionary: It creates a long-term mechanism for ongoing tax compression without creating an equivalent mechanism for new spending.

The practical meaning is that, in future legislative sessions, the default "do nothing" position will be further tax compression.  If the legislature wants to spend, it will now require an affirmative act.  Some sessions, they might do that, but they ain't gonna do that every session.

Over the medium to long term, the new funding formulas are going shift power from educrats to taxpayers.

And that's quietly revolutionary.


Teacher Pay Raises:

We've said our piece on this topic.  We're not really crazy about the concept.  But we've seen worse.  It's a middle of the pack idea.

Middle of the pack > bad.

Given that they legislature seemed determined to spend Billions on "education" this session...this was about the most bland, inoffensive, way they could have done it.

Furthermore, within the context of the current system, over time this shifts power from educats to teachers.

The original version of HB 3, however, was a blank check for bureaucrats.  Dan Huberty wanted to spend astronomical amounts on all school district employees, not just teachers.  Had that version passed, we would have never recovered from the perverse incentives.

Bland & inoffensive > never would have recovered.

The long-term implications from this power shift within the ISD's remains to be seen, but they could be significant.


Bottom Line: If you're a taxpayer or a teacher, you like this bill.  If you're a bureaucrat, you don't.  It'll be very interesting to see how this plays over time....

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