New Texas Legislature Faces Tough Agenda

Battle over a formula for fair school financing is set to resume

CRIMINAL justice, prison overcrowding, cuts in human services - the list of issues facing the new Texas Legislature is daunting. But education finance looms the largest.

The Lone Star State's 50-member Senate and 150-member House of Representatives convene in regular session for six months every two years. Last week members of the 73rd Legislature were sworn in, but because many attended the presidential inauguration festivities in Washington, business is just starting to get under way.

The top priority, state officials agree, is to devise a fair and equitable system of financing public education.

This issue has dogged Texas for a quarter-century, as one system after another was successfully challenged in court by plaintiffs.

Currently, school districts get some money from the state. They raise more through property taxes. And multidistrict entities called Countywide Education Districts (CED) levy a second property tax meant to transfer money from wealthy districts to their poorer neighbors. This last source was set up by the Legislature to satisfy a court demand for equalization of school financing.

A wealthy school district, however, obtained a court ruling that the CED tax represented an unconstitutional statewide property tax. The state Supreme Court has allowed the CED system to remain in place until the end of this school year. Then the court will close Texas public schools unless legislators craft an acceptable solution.

They failed to do that in a bitter special session last fall. Now they must draft an amendment to the state constitution in less than a month in order to put it before voters in a May 1 election.

The state Senate's Education Committee chairman, Bill Ratliff (R), this week proposed an amendment that would preserve the CEDs but cap the tax rate at 90 cents per $100 of property value. It would allow the Legislature either to set the actual rate or let voters do so within their CEDs.

Just in case the amendment fails, Senator Ratliff also proposed a law that would also let voters within the CED set the rate. This should address the court's objection to the tax.

Committee appointments in the Texas House will not be made until tomorrow.

So an informal, bipartisan collection of state representatives referred to as the School Finance Working Group has been wrestling with the issue. It plans to propose that only the 97 wealthiest districts out of more than 1,000 be made to share money.

What none of the pending legislation addresses is the shortfall of state funds. Revenues for the 1994-95 biennium are forecast to fall short of needs by at least $3 billion, or 5 percent. Just to keep up with growth in the number of students, the schools will need an additional $1.2 billion.

Last fall Gov. Ann Richards (D) talked of finding an extra $650 million for schools. Now, Camille Meyer, a legislative aide on education to state Rep. Libby Linebarger (D), says that amount may be cut to $350 million, and possibly to zero.

"It's not a pretty picture for any school district," adds Stephanie Korcheck, a policy analyst on the state Senate Education Committee.

State Sen. Peggy Rosson (D) of El Paso, one of the nation's poorest cities, notes that simply redividing the education money in her district is not adequate. "We have no property-rich school districts whatsoever" in the El Paso CED. "What we have is the poor sharing with the poverty-stricken."

One answer would be to increase taxes - a subject that cuts across all the issues facing the Legislature. "The people have been saying pretty clearly that they don't want their taxes raised," says state Sen. Jeff Wentworth (R).

Texas is one of the few states with no state income tax, but Senator Wentworth says he knows of no official who favors passing one. "This cuts across party lines. This is not a Republican position," he says, adding that the lack of income tax is the main reason business owners from out of state cite for moving their businesses to Texas.

Wentworth adds that recent Legislatures have boosted the budget by as much as 20 percent through revenue growth and new taxes. "Somewhere we need to begin to live within our means without raising taxes every time we come up here," he says. This time around that will require "setting some hard priorities."

Texas ranks near the bottom in spending on social services, but those programs will feel the brunt of budget cuts. The strategy behind the draft budget proposed by the leadership in the House and Senate is to cut state payments as much as possible while reducing federal matching funds as little as possible.

For instance, "medically needy" coverage under Medicaid is an optional offering. It is proposed for elimination in Texas, cutting off 18,000 clients with "high medical needs."

Also, payments under Aid to Families with Dependent Children would shrink to $46.50 per month from $57. And 7,000 people who would otherwise participate in the program would be excluded, for a savings of $31 million.

Prisons and criminal justice are also vexing problems. Bond money will let Texas add 30,000 prison beds by 1995 to the 50,000 it already has. One aim is to have the capacity to keep violent offenders behind bars longer.

Violent offenders now serve on average only one month for each year sentenced.

It costs the state $31,000 per year to incarcerate inmates, and even with the extra capacity, a prisoner's stay will lengthen by only 8.5 months per year sentenced.

"We'll never build ourselves out of the crime problem," says state Sen. Ken Armbrister (D).

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