Texas Senate to examine school finance system replacement plans

The Senate budget debate kicked off Monday, with the first of 18 scheduled hearings to examine Senate Bill 1, filed by the committee's Chairwoman, Sen. Jane Nelson, R-Flower Mound.

In Monday's hearing, Nelson highlighted the amount available for spending in the 2018-2019 biennium, roughly $105 billion. She emphasized the tightness of the budget while appointing two workgroups to examine two major causes for skyrocketing costs—healthcare and school finance.

Here are three important takeaways from the Senate Finance Committee's first public hearing of the 85th session:

1. The Senate is considering a top-down replacement of the existing school finance system

After appointing the workgroups, state Sen. Jane Nelson asked the school finance-focused group to begin with a clean slate when considering ways to fund public education.

State Sen. Larry Taylor, R-Friendswood, was named the chair of the working group. Taylor, who also chairs the Senate Education Committee, said he plans to hold a joint meeting with the Senate Education Committee to hear from groups working on new solutions to the system.

Taylor said it time for a new funding process, as the last financial system was initially implemented roughly 70 years ago. He said he is open to any solution to bring the finance system into the 21st century.

State Sen. Royce West, D-Dallas, a member of the working group, asked if Nelson wanted the workgroup's proposed solutions to pass this session. Nelson confirmed that is her intent, but she also said she was not sure if that would happen. Nelson was clear, however, that she did not want to see more temporary fixes.

"No more Band-Aids," Nelson said.

2. Some senators are considering using money from the Rainy Day Fund

State Sen. John Whitmire, D-Houston, questioned the Legislature's decision last session to cut taxes by about $4 billion considering the state is facing a revenue shortfall of roughly the same amount this biennium.

Despite the state population growing since the last budget was approved, Whitmire expressed concern over the fact that funding has shrunk. He suggested tapping into state resources to compensate.

"I would emphasize we are not a poor state. ... We have valuable resources that we could call upon, starting with the Rainy Day Fund," Whitmire said.

Prior to the hearing, only members of the House had indicated interest in dipping into Texas' Economic Stabilization Fund, an account that holds roughly $10 billion that is also known as the state's Rainy Day Fund.

3. The comptroller is confident his Biennial Revenue Estimate will not change by the end of this session

Comptroller Glenn Hegar summarized his report from two weeks ago, this time expressing confidence that his estimates will not change by May—as some biennial revenue estimates have in the past.

"I would not expect a significantly different [biennial estimate] in a few months," Hegar said.

To view upcoming hearings of the Senate Finance Committee, look here. The full text of Senate Bill 1 can be viewed here.


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