Texas House panel considers fixes for glitches in school finance law

Several months after a major school finance law rewired how billions of dollars get funneled into hundreds of school districts across the state, educators and state officials are still trying to untangle the threads.

House Bill 3, an $11.6 billion measure, gave school districts more money for employee salaries and programs like full-day pre-K and dual language. But at a House Public Education Committee hearing Monday, educators and advocates pointed to problems with the way the law was written that have resulted in unexpected increases or decreases in funding for individual school districts.

While lawmakers gave the state education agency power to correct those glitches, it's still unclear exactly how broad that power is. Meanwhile, some school officials are holding back on spending their money until they get more clarity on how much they really have.

"The problem is, districts don't have the data," said Lonnie Hollingsworth, general counsel for the Texas Classroom Teachers Association. "They basically have to guess as to what their funding is going to be."

Educators have been directly affected by this lack of clarity. School districts were required by the new law to use a chunk of their additional money to give teachers and other employees raises. But Hollingsworth said some have chosen to "lowball" those raises until they get final calculations from the state on things like tax revenue and funding for low-income students, promising to increase salaries once there is more financial certainty.

Beyond questions of financial clarity, another question that bubbled up at Monday's hearing was how much power the state’s education agency has to resolve problems in the law now that lawmakers have gaveled out until 2021. HB 3 explicitly gave Texas Education Commissioner Mike Morath significant authority to "resolve unintended consequences" if school districts saw unexpected losses or gains in funding. But it requires Morath to provide an explanation to lawmakers and then get approval from the governor and state budget board before making any changes.

Morath himself acknowledged the complicated position he is in: "One thing is what's for y'all to address next session," he said to lawmakers. "And another thing is what's for me to surface as an unintended consequence this interim."

One error Morath is considering a fix for: The law as currently written gives more money to the fastest-growing school districts in the state based on their percentage growth. But that means that tiny rural districts that add as few as nine students a year could qualify while enormous suburban districts that grow by hundreds of students do not.

Guy Sconzo, executive director of the Fast Growth School Coalition, asked lawmakers Monday to consider using enrollment numbers, not percentages, to determine which districts are eligible for that money. The downside, he estimated, is that including more large districts would result in a much bigger price tag for the state.

Another unintended consequence of HB 3: Some school districts of fewer than 800 students are receiving less money from the state if they enroll more students in career and technical courses, such as welding or veterinary technology.

Marshall Harrison, superintendent of Sunray ISD in the Texas Panhandle, said his district wants to expand the number of middle and high school students who can take these classes and get early preparation for high-paying careers. But he said district officials are “robbing Peter to pay Paul” and shifting money around to account for a roughly $23,000 loss in funding for this program.

Morath said "some of these issues we're learning about as time goes on." The Texas Education Agency has put out a series of videos and publicized answers to hundreds of frequently asked questions about the school finance law since May.

But some superintendents said that may not be enough, especially in rural Texas, which has fewer resources to train officials on the intricacies of the school finance system.

"I think there needs to be a concentrated effort to educate boards and superintendents on HB 3," Harrison said.

Disclosure: The Texas Classroom Teachers Association and the Fast Growth School Coalition have been financial supporters of The Texas Tribune, a nonprofit, nonpartisan news organization that is funded in part by donations from members, foundations and corporate sponsors. Financial supporters play no role in the Tribune's journalism. Find a complete list of them here.