In the face of a state Senate budget draft that would actually reduce state general-purpose revenue for public schools by $2.2 billion, Texas AFT legislative counsel Patty Quinzi testified Tuesday in support of a progressive alternative. Here is what she said to the Senate Finance Committee:
The Legislature is beginning the 2018-2019 budget cycle with an estimated $11.9 billion in the state’s reserve fund, the Economic Stabilization Fund (ESF), which is designed exactly for times like these when revenue flows from oil and sales taxes diminish temporarily. The upshot is that Texas lawmakers could use the ESF to maintain current spending from general-purpose revenue and still leave $8 billion or so in the ESF (also known as the Rainy Day Fund).
The state should use this available revenue to restore funding fully to past levels (an increase in the basic allotment of $300 plus per pupil to get back to the fiscal 2003 level, at a two-year cost of $3.5 billion, adjusted for inflation). In addition, the Legislature should improve equity by revising outmoded funding formulas to reflect the full cost of educating nearly 5.3 million students—60 percent economically disadvantaged, 9 percent with disabilities, and 17 percent with low English proficiency. The need for funding equity extends to access to high-quality, full-day pre-kindergarten, which should be expanded to eligible students. The Legislature should also enforce funding equity across districts, so that students have equal access to the educational resources they need regardless of where they happen to live.
The Legislature should guarantee state aid will keep up with enrollment, inflation, and rising state and federal requirements. Concurrently, the Legislature must also wean itself from the overdependence on local property taxes. The state has reaped the benefit of local property taxes by using newly available local revenue to supplant, not supplement, state funding. This practice has hindered the flexibility of elected school boards to raise funds locally. There should be a restoration of the authority of elected school boards to raise funds locally without triggering a tax-rate election.
Funding from the state for health insurance for active school employees has stagnated. For 15 years it has been stuck at the level of $75 per employee per month, rolled into the state funding formula for aid to districts. As a consequence, more and more of the cost of coverage has been shifted onto employees and their districts. The state and required district contributions used to leave employees paying a manageable 30 percent of the cost of decent coverage for an individual. Now, employees pay double that percentage thanks to the shrinking state share, even as benefits have diminished. The solution for this coming budget cycle is clear. The Legislature needs to raise the state contribution $75 per employee per month in each year of the biennium via the same funding mechanism used now.
To meet the growing needs of Texas students for the long term, the Legislature should build a new revenue structure by closing existing property-tax loopholes, which shift the burden from commercial to residential ratepayers, ending unjustified sales-tax exemptions for business and professional services (but keep “lifeline” exemptions for health care, child care), and closing loopholes in the business franchise tax.