Grading Texas

Remember when Gov. Rick Perry a few years ago issued an executive order purporting to require school districts to spend 65 percent of their budgets on classroom instruction? The order, of dubious constitutional validity, was issued to give Perry cover for underfunding the public schools while perpetuating the rightwing myth that schools were awash in wasteful administrative spending.

Education groups pushed back, and the state education commissioner’s eventual response to the order was to draft an ambiguous, virtually meaningless rule.

Why the history lesson? Well, the federal government has issued a rule requiring insurance companies to spend at least 80 percent of their premium revenue from individual health care policies on (what else?) medical care or customer refunds. This is the part of the new health care law, and it certainly could help a lot of consumers, maybe even some school employees, who purchase health insurance individually, rather than through group policies. It is designed to limit how much insurance companies can spend their customer dollars on administrative costs and profits.

Now, guess what Gov. Perry thinks about this rule? If you are guessing that he opposes it, you would be correct, even though most insurance companies spend a whole lot more of your money on administrative expenses and perks than school districts do. The governor’s handpicked insurance commissioner is asking for a phasein waiver from the federal requirement, which, if granted, would cost about 745,000 Texans a total of $260 million in lost insurance rebates over three years. That’s how many Texans buy insurance in the individual market, according to the story linked below, rather than through group policies.

Anyone detect a bit of inconsistency on the part of our governor? Well, he is running a consistently awful presidential campaign. Give him credit for that, anyway.

http://www.statesman.com/news/texaspolitics/texasresistsinsurersprovisioninfederalhealthcare2021623.html

With the campaign season drawing nigh, you can expect a number of incumbent state legislators to continue trying to cover their backsides with denials that they voted last spring to slash funding for the public schools. Now, you no longer have to take TSTA’s word for the fact that they are lying. The House Research Organization, an arm of the Legislature that deals with facts rather than political gamesmanship, has issued its official report, detailing how bad the cuts were.

The report, entitled, “Texas Budget Highlights” (Lowlights would have been better) is linked at the bottom of this post.

Among other things, the report notes that state aid to school districts through funding formulas and holdharmless provisions in the Foundation School Program will be reduced by $4 billion over the next two years. Sound familiar? And, it points out, an additional $1.3 billion has been cut from public education grants outside the Foundation School Program.

Major programs and initiatives NOT funded include:

# new instructional facilities
# teacher mentor programs
# certain dropout prevention programs, including the Texas High School Completion Success Initiative
# prekindergarten grants
# extended school day and extended school year programs
# life skills classes for teen parents
# science labs
# background checks for school personnel
# arts education grant

And, here are some other lowlights:

# A $263 million cut in the Student Success Initiative, a grant program to help students unlikely to meet the new STAAR testing requirements.
# A #104.1 million reduction in general revenue funding for textbooks and other instructional materials
# A $146.5 million cut in spending on the Teacher Retirement System pension fund
# A $120 million reduction in spending on TRSCare, the public education retiree health insurance program. The state’s contribution rate to TRSCare will be cut in half in fiscal 2013. Retirees may see an increase in their health insurance premiums.

This is just the education part of the budget, folks. When the deniers keep denying and they will DON’T BELIEVE THEM!

http://www.hro.house.state.tx.us/pdf/focus/highlights82.pdf

To the Republicans who run the Texas statehouse, Robin Hood – much slandered by predecessors from their own party is now a hero, although you won’t hear them admit it. If you are a recent arrival to Texas or don’t remember that there was a Texas governor before Rick Perry or George W. Bush, please let me explain.

Robin Hood, the mythical character who took from the rich to give to the poor, had long been admired by generations of school children, but in 1993 his name was hijacked by Texas Republicans for political purposes. “Robin Hood” was the moniker they applied to a landmark school finance law, enacted that year, that required property wealthy school districts to share local property tax revenue with poorer districts.

Democrats were still hanging on to power in Texas, and Republicans were trying to use the law – which became immediately unpopular with wealthy school districts – to undermine thenGov. Ann Richards, a Democrat who had signed it, on the eve of her 1994 reelection campaign. After two other proposed solutions had been struck down, this law was enacted to comply with a unanimous 1989 Texas Supreme Court order for more equity in funding between rich and poor school districts.

Richards lost her reelection race to Bush the next year, but the Robin Hood law was upheld by the Texas Supreme Court in 1995 with Republican John Cornyn (then a justice) writing the majority opinion. It has been upheld in subsequent decisions by an allRepublican Supreme Court, and its nickname has stuck.

Now that Rick Perry and other Republicans are in control of the statehouse, Robin Hood is more entrenched than ever. The GOPers may still say an occasional unkind word about Robin because it is still good politics, especially in suburban Texas, to bash him. But, in truth, they are very glad he is here because he helps them pass the buck for hundreds of millions of dollars in school funding each year to local taxpayers. More than 300 school districts contributed more than $1 billion to Robin’s cause in 2010.

The buckpassing (plus $5.4 billion in education budget cuts this year) helps the governor and the legislative majority continue to dodge a longoverdue overhaul of the state’s tax structure, while shortchanging almost 5 million public school children.

Several hundred school districts are suing the state (again) over the inadequate and inequitable school finance system, but the districts don’t really expect the litigation to force Robin Hood to go away, as is noted in the story linked below.

The school districts hope their suits will force the state to appropriate more money to education and to reduce disparities between wealthy and poor districts, but they aren’t expecting a miracle.

http://www.texastribune.org/texaseducation/publiceducation/robinhoodacceptedrealitytexasschools/

The Texas Legislature misses a lot of opportunities – usually intentionally – and it looks like it may be getting ready to miss another one.

A Texas Supreme Court ruling earlier this week gives the Legislature a prime opportunity to begin fashioning a revenue system to more adequately meet the state’s 21st century needs, including enhanced educational opportunities for our children. But, as the story linked below indicates, that is not the priority of the current legislative majority.

The same legislators who only recently slashed $5.4 billion from public school funding now apparently want to just tinker with, rather than truly reform, the state’s new business franchise tax, following a Supreme Court decision that the tax is constitutional.

The tax, which Gov. Rick Perry convinced the Legislature to enact in 2006 when lawmakers ordered deep cuts in school property taxes, has been underperforming from Day One. Part of that was by design. The governor and the legislative majority wanted to claim credit for “tax cuts” in an election year, so they intentionally created a new tax that would not raise as much new state revenue as the schools lost in the local tax cuts. The recession also took a toll on franchise tax receipts to the point that the “structural deficit” in the school finance budget (about $10 billion this biennium) accounted for more than onethird of the $27 billion revenue shortfall that lawmakers confronted last January.

We already know that they bridged that canyon with budget cuts, even while leaving at least $6.5 billion unspent in the Rainy Day Fund.

Now, with uncertainty over the franchise tax’s constitutionality cleared up, legislators have a chance to overhaul the tax so that its revenue can grow with the economy. Such reform, however, would most likely require some businesses to pay more, and many business people don’t want to, even though they give a lot of lip service to how important a quality educational system is to the state’s future.

“We’re pulling the wagon,” said Bill Hammond, president of the Texas Association of Business, claiming that Texas businesses already pay 60 percent of all state and local taxes.

According to the state comptroller’s Tax Exemptions/Incidence report, businesses initially will pay an estimated 51 percent of most state and local taxes in 2013, with individual consumers paying 49 percent. After businesses pass on those taxes in the form of higher prices for their products and services, Texas consumers will end up paying 77 percent of the ultimate tax load, the report estimates.

Businesses are pulling the wagon?

In reality, every time the business lobby blocks an opportunity to improve the state’s tax structure, it is shoving the wagon – right over the school children of Texas.

http://www.statesman.com/news/texaspolitics/businesstaxchangesmaynotbringmoremoney2002564.html