Two Houston-area lawmakers’ bills filed in the state Legislature this session could dramatically change how public school districts—including Humble and New Caney ISDs, receive their funding from the state.
House Bill 21, filed by Rep. Dan Huberty, R-Houston, was passed by the Texas House on April 20, just one year after more than 600 school districts challenged the public school funding formula in the Texas Supreme Court and it was ruled minimally constitutional.
Huberty, whose district includes Atascocita, Kingwood and a part of Humble, said HB 21 is the first step in a multisession process.
“By increasing state funding for schools, we can improve instruction and reduce the need for higher property taxes,” said Huberty, who serves as chairman of the House Public Education Committee.
However, the bill could face a challenge in the Texas Senate, which has a different plan—Senate Bill 2145—to fix the funding formula without adding more money into the system this session.
Sen. Larry Taylor, R-Friendswood, who authored SB 2145, said HB 21 uses money from the state’s Economic Stabilization Fund, better known as the Rainy Day Fund, to cover the costs.
The Rainy Day Fund is a savings fund that allows the state to set aside excess revenue for unexpected revenue shortfalls. Taylor said he believes the $10 billion fund should be tapped for one-time expenses only.
“You don’t use your credit card to keep spending when your income is down,” Taylor said.
The two state bodies have until May 29—when this legislative session ends—to reach a compromise on public school funding unless a special session is called to reconcile the differences.
Bill Breakdown
HB 21 adjusts the funding formula for public schools and allots an additional $1.65 billion to public education over the next two years.
Humble and New Caney ISDs could receive $4.3 million and $2.1 million more, respectively, than they would under the current formula for fiscal year 2018 if the bill is signed into law, according to the Texas Legislative Budget Board—a joint committee of the Legislature that completes fiscal analyses for proposed legislation.
“It’s important to increase school funding by more than a billion dollars, because in 2011 the funding was slashed due to the recession,” said Huberty’s legislative director Molly Spratt. “This is a big step in restoring those cuts.”
This bill also lowers recapture payments by approximately $173 million in 2018 and $205 million in 2019, Spratt said. Recapture, colloquially known as the "Robin Hood" plan, was first created in 1993 as a way to divert tax revenue from property wealthy school districts to property poor districts, according to the Texas Education Agency.
In 2016-17, 379 school districts are expected to send more than $2 billion in total to the state, according to the TEA. HISD and NCISD are considered property-poor school districts and are not subject to recapture payments.
Additionally, HB 21 provides more weight in the funding formula for dyslexic students, career technical education and technology as well as a bilingual adjustment for schools with more diverse student populations.
“It’s nice to see this step forward—especially for students with dyslexia, career and technical education and some of those areas that have been historically not been weighted properly to get some attention,” Humble ISD Superintendent Elizabeth Fagen said.
Taylor’s SB 2145—which also aims to change the public education funding formula—takes a different approach.
The bill would give all school districts the same money per student and provide more funding for students who have disabilities, are economically disadvantaged, are in career and technical education or are English language learners, Taylor said. That funding would then be multiplied by the district’s Maintenance and Operations Tax Rate to determine its guaranteed amount.
SB 2145 would also lower the amount of districts that return money to the state through recapture, he said. It would allow about 240 fewer districts statewide to avoid being penalized by the recapture rule, he said.
“[SB 2145] is a more equitable way to distribute the money,” he said. “[The current formula] is very complicated, which is why we have to reform the whole school finance system.”
A vote is pending on SB 2145 in the Senate Education Committee as of press time. Taylor expects the House and Senate to reach a compromise, with facets of HB 21 and SB 2145 enacted as law.
"It’s still wide open—it’s not like it’s going to be this plan or that plan,” he said. “It’s going to be one of the plans with some of the other measures put into it as part of the compromise.”
