House gives preliminary approval to bill overhauling school finance system

_{Editor's note: This story was updated April 20 to note that the Texas House gave final approval to House Bill 21.}

State Rep. Dan Huberty succeeded at a difficult task Wednesday: getting the Texas House of Representatives to vote for legislation overhauling the funding system for public education, without a court mandate.

After a four-hour discussion of more than 30 proposed amendments, the House voted 134-16 to tentatively accept its top education leader's plan to inject $1.6 billion into public schools, simplify the complex formulas for allocating that money and target certain disadvantaged student groups for more funding. The bill must still be approved on a third and final reading in the House. (Update, April 20: The Texas House gave final approval to House Bill 21 on Thursday in a 132-15 vote.)

The Texas Supreme Court ruled last year that the school finance system was in need of serious reform, but ultimately constitutional.

The lower chamber's decision to give preliminary approval to House Bill 21 is a reversal from the 2015 session, when outgoing House education leader Jimmie Don Aycock withdrew a major bill overhauling the school finance system from the House floor less than an hour into the debate.

The tentative victory comes after senators approved a budget that cuts state funding for public schools by $1.8 billion in general revenue and uses local property tax revenue to make up the difference.

Huberty's bill would increase the base per-student funding the state gives to school districts, in part by increasing funding for students who are bilingual and dyslexic. The Legislative Budget Board estimates about 96 percent of districts and 98 percent of students would see more money under the bill.

“This is the first time in over 30 years that we have the opportunity to vote for school finance, to make a holistic change,” Huberty said before Wednesday’s vote.

Throughout the evening, Huberty successfully moved to table many of his colleagues’ proposed amendments to the bill, either because they would add to the bill’s price tag or because he deemed them irrelevant to his legislation.

“This is the school finance bill,” he reminded Rep. Jason Isaac, R-Dripping Springs, who unsuccessfully tried to attach a provision to HB 21 that addressed the testing and accountability system.

The House budget allowance for this bill would provide more funding to more school districts for busing, but many legislators expressed concern that the money would be stretched thin because districts that didn’t provide bus service would still receive transportation money. None of the amendments to address transportation funding passed.

Rural legislators banded together to add a provision that would help  hundreds of small districts with fewer than 1,600 students. The provision, proposed by Rep. Drew Darby, R-San Angelo, would remove an existing financial penalty for school districts smaller than 300 square miles, which was originally intended to encourage them to consolidate.

Darby proposed putting all districts with fewer than 1,600 students at similar levels of funding, which he said would increase funding for more than 400 districts.

"Almost half the school districts in Texas will benefit from these amendments," he said.

Legislators voted 86-59 to approve Darby's amendment, despite Huberty's opposition.

Many of those districts rely on a state aid program designed to offset a decade-old tax cut. Additional State Aid for Tax Reduction, or ASATR, is set to expire in September, with about 250 or so small, rural school districts depending on it to keep their doors open.

Huberty’s bill would let the program expire and create a transitional $200 million grant program over the next two years to help school districts that lose money under his bill. That’s half of the more than $400 million that districts currently receive through the expiring program.

Darby successfully proposed taking about $40 million from the grant program and directing it toward small districts in 2019.

Rep. Harold Dutton, D-Houston, who has been in the Legislature for more than three decades, said he felt confident the bill would pass.

"You've got a different ... climate here now in the House. Aycock really set the thing in motion last session. I think the fact that he did pull the bill sent a huge message to all of us that we needed to do something different this time," he said.

Read related Tribune coverage:

• The Senate Education Committee discussed a bill that would radically simplify the state's school finance formula, stripping it of some antiquated provisions. Parents and educators who testified wanted a few new provisions added in. 
• As lawmakers debate possible reforms to the school finance system this week, they might decide whether to continue offering extra money to districts like Texas City ISD, which last year was forced to annex a struggling district next to it. 
• The House Public Education Committee voted 10-1 to approve Chairman Dan Huberty's school finance bill, which would mean gains for most, but major losses for some.