Originally this was supposed to be written as an update on my first Legislative Session as the State Senator for District 31. This session ended on May 30. Then Governor Perry called two special sessions on school finance, the last ending on August 19, with no legislation passed on public education. And so this is now about rolling the public school finance reform boulder uphill.
It's important to note that the special session(s) were not just about school finance. Last winter, in the appropriations bill, the legislature appropriated thirty-four billion dollars to public schools, an increase over the previous biennium. I believe that some areas of need will require additional real dollars over time, but the fear voiced in some calls that schools would not open this fall were completely unfounded.
The key word in the discussion of the special sessions is reform, the need to change the way our schools are financed so that more money can be directed to the education of children in Texas while preserving a system of taxation that is conducive to business and capital growth. Just as an educated workforce is the key to this growth, so is a system in which individuals and businesses are not taxed excessively.
This is what a lot of people believe has been done to property owners in Texas. The local portion of school taxes as been derived wholly from property values. While this has been done, the Texas economy has changed from one that was based upon property ownership and appreciation: manufacturing, refining, farming, distribution, cattle and mineral production. Fifty-three percent of the Texas economy is now in the service sector, industries that do not depend upon appreciation on value added to property, production or inventories.
It is not in question that our system of public education in Texas is an absolute priority or that it will require real, new dollars to have an effective system to educate 4.3 million young people. We have the additional challenges of having around 80,000 new students in our schools each year. On top of this, we are placing even higher standards of accomplishment on students and teachers, not all of which are productive as they are represented. So we must have a system that depends substantially on property tax and must do an adequate (we should prefer excellent) job of educating young Texans while seeing to it that the resources invested in a young person in a property poor district are commensurate with those directed to the education of one in a rich district. We must have a system that does the same job in Miami, a district with about 170 students and in Houston, a district with 208,000 students.
Since there are a lot of people who think property owners should be relieved of their exclusive burden of taxation, a lot of the debate on school finance reform is really about taxation. How will we, fairly and equitably, tax individuals and businesses to raise the sums of money needed to fund public education, higher ed, health care (including Medicaid, CHIP, etc.), public safety, adult and child protective services and the myriad of other things that rely on public funding?
To address tax reform, not public education, the Governor has appointed a committee to be led by former Comptroller John Sharp. Mr. Sharp has been busy talking with legislators to see what the areas are that will receive the support of the people, firms and local governments that we represent. Then this committee will meet around the state talking to these entities and trying to come up with a system that will meet the fiscal demands of a large and growing state while nurturing a business and residential environment that fosters growth and increased opportunity.
This process is being pursued while the Texas Supreme Court is concluding its determination of the Constitutionality of the present school finance system. Prevailing opinion is that certain elements that exist today, in a system implemented largely in 1993, must be replaced by a new system of school finance. Specifically, is it legal to cap local property taxes at the current level and is the present recapture or "Robin Hood" system really part of a statewide property tax that would have to be approved by the voters and has not been?
There have also been discussions of all sorts of other taxes: increased sales, cigarettes, alcohol, car and boat, license fees, gambling in several forms, sales tax on services and franchise taxes. It appears clear that the current franchise tax, which is paid by only one firm in six, must be replaced or broadened so it will effectively raise the amount of revenue to do some important jobs. This in light of the fact that Texas does not have either a personal or corporate income tax that provides a progressive source of revenue in a lot of states.
One discussion that I believe we must have, citizen and legislator alike, is a careful analysis of revenue shortfall. Is the state of Texas really short of revenue or long on expenditure? Are we spending more of hardworking Texans' money than is absolutely necessary to provide those things that Texans reasonably expect of government?
During the twenty months that I have been in the Texas Senate, I have formed my view of public education largely from interaction with school superintendents, teachers and others in the educational community, both locally and statewide. We should be confident in the ability of those in education to prepare our children for the challenges of the future, just as we were prepared. This in light of the ever heightened standards of performance and attainment. We must provide the wherewithal for public education while insuring that our state's ability to provide employment and opportunity for our educated workforce is not adversely affected.