There have been several news stories about how the Senate is approaching funding schools in this year’s budget. Most of the stories have either been incomplete or inaccurate.
In addition, rallies have been held demanding the legislature put back the 5.5 billion that was cut in 2011 when the state was facing nearly a 20 billion shortfall. We don’t have 5.5 billion extra in the budget and healthcare is gobbling up the additional dollars we have as you will read below thanks to the Affordable Care Act, also known as Obamacare.
As a member of Finance and as the chair of the work group on school funding here are the facts:
We are not sitting on a treasure chest of money and not giving it to our schools. We have a Constitutional limit on what we can spend as set by you the voters. This year, in addition to our base budget, we currently have about 4.5 billion in additional state revenues we can spend under the law as we wish in the budget.
As you can see even if we spend all of it on education, it is not 5.5 billion. Plus, because of the Affordable Healthcare Act, our Medicaid spending is skyrocketing. By the second year of our two year budget, Medicaid and other healthcare spending in Texas could surpass our education spending for the first time in our history.
If we don’t get a handle on Medicaid spending it could mean that one day it could consume 60-75% of our budget.
Of the 4.5 billion extra we currently have to allocate above our budget, we have allocated 1.5 billion in addition for education, healthcare gets 1.7 billion, and higher education is getting nearly 700 million. That is 3.9 of the 4.5 billion of extra dollars we have due to our good economy.
The remaining 600 million goes to the other 7 areas of the budget and doesn’t leave much for those budget areas.
Those who want unlimited funds for education give the impression that we are not spending a lot of our money on education and we have money that we are holding back. That is simply not true.
Currently we spend almost half, 50 cents of every state dollar in our budget, on education. As noted above Medicaid and over-all healthcare spending will consume most of the rest. That is why there isn’t much left over for roads, public safety needs, and infrastructure, including water. Two items education and healthcare take up almost all of the budget.
For those insisting we replace the 5.5. billion cut last session, when we had no other choice, as we must have a balanced budget by law, the only way we could do that is to raise revenues by increasing the sales tax, creating a state income tax, or dramatically increasing your property taxes. I don’t think many Texans, including those in education, want their taxes to go up dramatically or to see a new state income tax.
Others bring up the Rainy Day Fund. Just like school districts across the state, who have hundreds of millions in their reserve fund, these funds are not intended for ongoing expenses. If we used the Rainy Day Fund for ongoing expenses we would eventually run out of our reserve money very quickly and then what would we do.
Some want us to vote to break the spending cap. I was quoted in the Chronicle saying “not in my world.” I cannot vote to break the Constitutional spending cap. If we do that then we will be on the same road to financial disaster that is our federal government is on.
And for the 1000th time, the lottery does not pay for education. That was a big lie sold to voters back in the early 90s when it passed. It’s only been recently that the profits went to education instead of the general fund. The lottery proceeds account for about a week of funding for public education. And if gambling passes it will only pay for about a week as well based on projections.
This is not to say that I and others don’t support funding education at the appropriate levels needed to provide a quality and equitable education for all of our 5 million plus students.
Our base budget has nearly 2 billion in new spending to pay for growth over the next two years. (We add about 80,000 students a year, over 50% who are on free and reduced lunch.) And we added the 1.5 billion as mentioned above just last week. I chaired the work group that made that decision. That is 3.5 billion in total above our last budget.
I believe we will have additional dollars to put toward education between now and the end of session because of local property values that are increasing and updated reports by the Comptroller on our economic forecast. Our budget is set by economic models and forecast from the Comptroller.
We actually ended up getting 8.8 billion more than the Comptroller forecast because our economy, in large part due to oil discovery in the Eagle Shale Ford, has increased more than she thought in 2011. However, that 8.8 billion was spent on bills we could not pay last session.
We pushed those bills back because we didn’t want to cut further and believed we would see additional money coming as there were signs in 2011 that Texas would rebound faster than expected. Our money management plan worked and we had the money to pay those bills that are coming due in the next 5 months.
However, we must be sure as we add more money to the system it is spent wisely and that we get results for your money. Over the last almost 20 years we have increased spending on education in Texas far above student growth and inflation, but we have not seen significant increased performance.
Make no mistake running a school district, a school, or teaching a class today is hard work. I am a strong supporter of public education. But money must also come some change and reform. We are lucky in Senate 7 because we have some of the finest school districts in the state and country. However, there are limits to what we have to spend under the Constitution.
As noted previously unless taxes go up dramatically or new taxes are created there is a limit to what we have to spend on any one area of the budget. I don’t believe the majority of people want new or higher taxes, especially when they are given the facts that nearly half of all of our taxes, plus local property taxes, go to education now.
America spends more per child on public education than any country in the western world, but we trail many of those countries in the outcome and performance of our students.
Sometime at the end of this year, or likely in 2014, we will get a Supreme Court decision on school finance. A special session will be called and it is my hope we can come together to find a long term solution to funding education and end the never ending cycle of every 5 or 6 years a lawsuit being filed on this issue. It won’t be easy, but we have to find a long term solution that provides a quality education for all within the limits of what Texans can afford through taxes.
Summary: so the next time someone asks or you read an article about education funding remember these facts:
1. We spend about half of all state revenues on education today in our budget and have for several years.
2. Healthcare, because of the Affordable Care Act, is quickly swallowing up the rest of the budget and one day soon could crowd out our spending on education. Obviously we can’t have education and healthcare taking up 100% of the budget, but that is where we are heading without major changes and reform to both education and healthcare.
3. We have already added nearly 3.5 billion for education to this years budget over and above our last budget in 2011. 2 billion is for growth and 1.5 billion to general education funding and successful programs.
4. We may have additional dollars to work with in our budget and if so I will fight for education to get their fair share of those dollars.
I hope this helps deal with the myths and mis-information that is out there on education spending in Texas. LIke I said, we are not sitting on a treasure chest of money holding it back from education. We are spending every dollar up to the Constitutional limit set by the voters and education is either #1 or #2 behind healthcare in appropriations in our budget.