Action Newsletter

July 2005 • Volume 2, Issue 7

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Debate Continues On School Finance Plan

Other Issues On Chamber's Legislative Agenda Successful

Guest column by Liz Morse, a member of the Chamber's Public Affairs Committee

Although it topped most everyone's priority list, the 79th Texas Legislative session came to a close May 30 without a solution to the public school finance issue. Lawmakers got stuck on several critical issues and time ran out before they were able to reach a consensus.

Last fall, the judge in the case regarding school finance reported that the state needed to provide approximately $1,100 in additional funding per student in order for schools to meet state-mandated accountability standards. None of the debated legislation came close to reaching that figure. In fact, it was estimated Richardson ISD would lose an estimated $1 million under the proposed legislation. By the time it got to committee, local educators were hoping the current system would remain in place.

On June 21, Gov. Rick Perry called the legislature back for a special session to consider his plan for public school funding and property tax relief. Instead, the Senate and House education and finance/ways and means committees chose to pick up where they left off with their own versions of a plan.

Educators are hopeful that this special session will bring a reasonable and long-term solution to the financial woes of many school districts. Some key issues are: they want legislators to support local control for school districts and the constituents who elect their school boards, especially with regard to the school start date and elections for trustees and bonds. School officials also want legislators to provide enough discretionary funding to allow districts to meet the specific needs of their student populations, and not tie new dollars to additional state mandates. Also, legislators should keep (and pay for) the promised health insurance stipends for teachers. And, those in the education community are hopeful that legislators will keep public funds for public schools.

Texas Enterprise Fund
Another key issue on the Chamber's legislative agenda was funding for the Texas Enterprise Fund and the creation of the Texas Emerging Technology Fund. Created by the Texas Legislature in 2001 at the urging of Gov. Perry, the Texas Enterprise Fund is used by the state as a deal-closing source to lure new job-creating projects to Texas via performance-based incentives. The Texas Emerging Technology Fund is a high-tech version of the Enterprise Fund. Gov. Perry had sought $300 million a piece for both the Emerging Tech and Enterprise funds. Lawmakers ultimately approved $280 million for both, with $100 million slated for the technology fund. Another $100 million is expected to be available for the technology fund from the state's emergency rainy day account.

Workers Compensation
HB 7 (Solomons) and SB 5 (Staples) set forth extensive provisions reforming the workers comp system. Both were adopted and conferees were designated to resolve differences in the bills. The adopted Conference Committee Report calls for using health care networks and measures to improve worker care, bring quality physicians back into the system and control costs. It abolishes the Texas Workers Compensation Commission, creates a stand-alone division at the Texas Department of Insurance reporting to an appointed commissioner of workers compensation, increases benefits to injured workers, and improves the quality and responsiveness of the workers comp system. It includes a governor-appointed public counsel to advocate interests of injured workers and oversee agency ombudsmen.

Air Quality
The goals going into the session were to seek full funding for air quality research and programs, to broaden the applicability of the Texas Emissions Reduction Plan (TERP) to more classes of vehicles and engines in order to increase cost-effective emissions reductions, to improve the Low Income Repair and Replacement Assistance Program (LIRAP) to assist local governments in removing the most heavily polluting vehicles from the road, and to encourage energy conservation measures. With exception of full funding, these goals were achieved by passage of HB 1611 (Chisum), HB 2129 (Bonnen) and HB 2481 (Bonnen). TERP and LIRAP fees generate approximately $100 million more in revenue annually than is appropriated for program funding, which is mostly a result of two intertwined forces prevalent during the 79th session: (1) leadership instructions to budget writers to set aside $3 billion from current funds for public school finance and (2) the need to satisfy the Comptroller's certification that revenue estimates are reasonable and sufficient to cover estimated expenditures in the General Appropriations Act.

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