Unexpectedly, a Lawmaker Finds Extra Money For Schools

A Texas lawmaker said the magic words Thursday morning to a panel of exhausted and nearly hopeless state budget writers: he has found a “new revenue source without raising taxes.” 

State Rep. Rob Orr, R-Burleson, introduced two bills to the House Appropriations Committee that could add several million dollars to the public schools budget over the next two years. 

HB 2646 proposes allowing the School Land Board to transfer at least half of the net revenue it collects from a land trust it oversees to the Available School Fund (ASF), an endowment that puts money directly into public schools in Texas. Orr said that pot of money has risen to more than $2.5 billion in market value and contains more than $1 billion in cash. If that trend continues, the fund could supply the state with an additional $500 million in the next biennium. 

“I think it’s irresponsible to have that much cash sitting around when our public schools need that money,” Orr said. 

Getting this measure to pass requires companion legislation, so Orr is also sponsoring HJR 109, a constitutional amendment that would allow the General Land Office, which oversees land that belongs to the Permanent School Fund, to distribute revenue directly to the ASF. The resolution would be placed before voters during the Nov. 8 election. 

Lawmakers from both parties expressed surprise and gratitude. 

“I want to get on my knees and thank Rep. Orr for finding this source of money,” said state Rep. Ruth McClendon, D-San Antonio. 

“I feel happy we’ve discovered this cookie jar, but also sad that we’re just learning about it. It makes me believe there’s something else out there. We just haven’t dug deep enough,” said state Rep. Angie Chen Button, R-Garland. 

State Rep. Warren Chisum, R-Pampa, expressed some caution because he said the School Land Board has made sound investments with the fund. 

“Why should anybody be sitting with a billion in cash when we’re taking it from everybody else, when schools are suffering and nursing homes are closing?” state Rep. Sylvester Turner, D-Houston, responded. “Nothing should be left on the table as if it should be protected.”  

State Rep. John Otto, R-Dayton, said so far he supports the proposal because it does not disturb the fund’s corpus, the principal amount of the trust.  

“If we take the [principal] — that’s one-time money that may remove a future funding stream. I think it’s not unreasonable to ask for one half of the earnings and allow the [principal] to grow and also identify an ongoing source of revenue,” Otto said. 

State Rep. Doug Miller, R-New Braunfels, tried to sum up the policy question before him using a boat metaphor. 

“We have this cash that we’ve received from income,” he said. “Do we spend the money? We got a boat and the boat’s sinking. Do we spend the money on repairing the boat? Or do we save the money to invest in a new boat in the future?” 

Orr responded by saying HB 2646 and HJR 109 would be a “win-win” for the state. 

“We’re able to fix the boat, but we’re also building the funds for the new boat down the line,” he told Miller. 

House Appropriations Chair Jim Pitts said the committee will vote on the bills next week.