Budget Notes: The Race to Fix School Finance Without a Special Session

One day after the education fiscal bill known as SB 1581 died on the floor of the Texas House, lawmakers are scrambling to reach a deal and keep the state budget bill, HB 1, on track for approval by both chambers before the weekend deadline.

The bill was considered critical as the prospective "vehicle" for lawmakers' plans to disperse money to school districts over the next two years. But last night, the House balked at adopting the school finance proposal attached to the bill by Senate Education Chairwoman Florence Shapiro, R-Plano, or either of two competing proposals from their own education leaders, Rep. Rob Eissler, R-The Woodlands, and Rep. Scott Hochberg, D-Houston.

That meltdown happened as members came face to face with the projections of how much their local districts would individually bear the $4 billion reduction in state public education funding. And it means that any changes to state funding formulas will happen in a conference committee over SB 1811, the broad fiscal matters bill that's already cleared both chambers. Or, of course, in a special session. The governor is among the optimists who think lawmakers will finish their work without going into overtime.

We've tracked down key players in the budget and education to get their take on what happens next. 

Senate Finance Chairman Steve Ogden, R-Bryan, reacted to the latest developments Tuesday afternoon with the following remarks: 

• "This is a really big deal. We can't kick the can down the road on everything," he said, referring to Medicaid payments and school finance. That would be a "colossal mistake."
• On whether he has anything to say about leadership this session: "Nothing. I have nothing to say one way or another."
• Chances of a special? "Well, I don't think 1581 necessarily dramatically increased it, because it's possible to do the same in 1811." But, "if 1811 dies, we really are in a special session."
• He still hopes the budget conference committee will vote out a final report on Thursday. After the 48 hours of laying out, that means a "Saturday night at the Senate." 
• On letting Education Commissioner Robert Scott do proration, cutting each school district's state funding by the same percentage amount: "No you can't. No we can't." He thinks voting for the proration plan would be kicking the can down the road, but he's also "not going to rule it out."

Gov. Rick Perry spoke to reporters after a bill-signing ceremony Tuesday afternoon marking the passage into law of House Bill 15, which will require most women getting abortions to get sonograms first.

• Perry said there's still time to get the budget and school finance legislation done without a special session this summer. “I’m pretty optimistic about getting a budget, and school finance is obviously part of that," Perry said. "People are still talking and working toward a solution. I’ve been on the phone with the speaker this morning and the principal players in the House and the Senate who are dealing with the school finance issue. I’m still optimistic that when [May] 31 rolls around, we'll be finished with our business and can go home.”
• Perry ruled out using more money from the so-called Rainy Day Fund. "I think that issue is settled," Perry said. "As a matter of fact, I know that issue is settled."

At 2 p.m., a visibly frustrated Sen. Florence Shapiro, R-Plano, said she has called a meeting with House lawmakers to find a solution to the school finance problem.

• She said lawmakers need to look at the bigger picture and look "beyond their own districts" at what's best for the state. She also encouraged lawmakers to look beyond the district-by-district estimates she distributed. 
• Shapiro said her plan differs from the House plans being debated off the floor because those plans were being put together in the final days of the session, where hers has been researched and in the works for nearly 12 weeks. 
• She said she is the "eternal optimist" but that she believes a special session is a certainty if lawmakers don't pass a finance bill quickly. 
• A meeting has been called, but the time and location are not yet available. It will be open to the public. 

For some perspective on what led to last night's meltdown in the House, we talked to Rep. John Otto, R-Dayton, a member of the House Appropriations Committee. 

• "Out of the two plans that the House was going to look at, I probably would have gone with proration, because that's what helps my districts the most," he said. 
• Otto said it's hard for House members to look beyond their own districts as Shapiro has encouraged them to do, because cuts in excess of 10 percent over the next biennium (and outlined in some of the preliminary reports attached to Shapiro's SB 1581) are not acceptable to school districts. "This is one of those things where when you go back home you can't say, 'Well, yeah, but statewide I helped. This is what we should do statewide. ... Who sends me here? My district. You know, I tell people all the time I'm sent by the people of House District 18 to represent their interests, and then the state's interest. If I give up and not represent their interest on something key, like how our schools are going to be funded, I'm not sure how they're going to send me back." 
• Otto said it's obvious the Senate can reach a consensus faster because there are only 31 members in that chamber compared to 150 in the House and their districts are much larger, allowing them to spread the political risk. "I only have about 12 [school districts in the House district], and I need to look at how it affects those 12, because those are the only ones I represent. And I'm okay taking a little pain and spreading it, but as I said — most of my small districts, percentage-wise, were going to be heavy hit."
• If they have to come back for a one- to two-day special session to figure out the funding formulas, he's okay with that. He thinks it's most important to set the budget first and spend a month or so working out the distribution details.