Texas House leaders on Tuesday filed a $9 billion school finance plan that would cut property tax rates, direct more money to educating students from poor families and repeal and rewrite outdated elements in the funding formulas.

Senate leaders said they expect to have a similar bill within the next few days ahead of the Friday deadline for filing most legislation.

“This is transformative,” said state Rep. Dan Huberty during a news conference Tuesday to introduce House Bill 3. “Since I’ve been here for the last 10 years, we’ve been trying to fix school finance. We’ve been trying to come up with reforms. This is going to make a difference in the 5.4 million children’s lives in the state of Texas.”

HB 3, supported by more than 80 House Democrats and Republicans, many of whom crammed themselves into the room for Tuesday’s news conference, would cut the Austin district's property tax rate by 5 cents per $100 property valuation, according to Texas Education Agency estimates. An owner of a $200,000 home in Austin would save about $100 a year starting in 2020. The district's recapture payment, which it must pay to the state to help support property-poor districts, would drop from an anticipated $765 million to $600 million next year.

The bill also would give the Austin district an additional $97 million next year, officials said.

“I’m really encouraged by the proposal,” said Nicole Conley Johnson, the Austin school district’s chief business and operations officer. “I’m happy for Austin. Austin is going to be better positioned (with) both funding new monies and recapture.”

The 186-page bill spends $9 billion over the next two years on top of the $2 billion the state is ponying up for student enrollment growth.

Property tax relief

The bill, which Huberty said still requires technical fixes, borrows heavily from recommendations of the Texas Commission on School Finance, which had spent last year poring over the school finance system to identify elements that no longer work.

Sen. Larry Taylor, R-Friendswood, the lead writer of the Senate’s version of the school finance bill, said his legislation also will include many of the commission’s recommendations.

“The school finance part is pretty much the same, but the numbers are going to be different,” Taylor said of his bill compared with HB 3.

“We are going to get this done,” Taylor said when asked whether a school finance overhaul would be accomplished during session.

Taylor said he's considering including Gov. Greg Abbott’s property tax relief plan in his bill. Abbott has proposed capping the growth of property tax revenue school districts could collect at 2.5 percent a year.

The House ditched the plan and instead would drop every school district's property tax rate by at least 4 cents. Some school districts could drop their rates even more under HB 3 because the state is increasing the amount of funding certain school districts can receive on a portion of their tax rates.

The drop in property tax revenue combined with an infusion of state dollars through other provisions in the bill means property-wealthy school districts across the state wouldn't have to pay as much in recapture money.

With the Austin school district considering school closures and other measures to save money, Conley Johnson said any bit of savings helps.

“It definitely takes away some of the enormous pressure that’s on Austin to close its budget gap. We have a $65 million shortfall. It's not going to save us entirely, but it helps us meet that gap halfway,” she said.

Teacher pay raise



Also missing from HB 3 is an across-the-board teacher pay raise, approved by the Senate, which Huberty noted wasn't recommended in the school finance commission report. Senate Bill 3 would spend $3.9 billion over the next two years to give all classroom teachers and librarians a $5,000 annual pay raise. The bulk of extra money the Senate’s base budget sets aside for school districts over the next two years would pay for the pay raise.

Some education groups that did not support SB 3 had wanted school districts to have the flexibility to use the $3.9 billion for other educational expenses.

“I think teachers are some of the smartest people in Texas, and they are going to figure out that the Texas House has a winning plan for teachers and students,” House Speaker Dennis Bonnen, R-Angleton, said during Tuesday's news conference.

HB 3 instead would create a $140 million teacher quality program, in which teachers could be paid more if they go to a more challenging campus. It would be up to school districts to devise how they would incentivize teachers, Huberty said.

Teacher groups expressed disappointment in the across-the-board raise missing from HB 3.

“We understand there are some good things in the bill,” Texas State Teachers Association President Noel Candelaria said in a statement. “But we need an across-the-board, permanent pay raise for every teacher guaranteed in the law and an increase in funding to also assure pay raises for all school employees.”

The bill also directs an extra $780 million a year to school districts, based on the numbers of students from low-income families and who were raised primarily speaking a language other than English are enrolled in kindergarten through third grade, which districts can then use toward establishing full-day prekindergarten. If districts already have full-day pre-K, they can use the money for something else but must target literacy for young children.

Huberty excluded from the bill the “outcomes-based funding” recommendation from the school finance commission that had troubled public education advocates. It would have given districts extra money if their third graders improved their reading abilities and seniors were college ready, which critics feared both of which would be measured by state standardized test scores.

Public education advocates did not want strings attached to the money, especially when schools were not being funded adequately.

“I’m happy that the outcomes piece funding is a missing element and I’m also happy that we can directly control how the money should be spent on programmings,” Conley Johnson said. “Most of us know teachers are our first priority but the flexibility to decide and apply funding and sources – I think local autonomy is especially important in that. I think the House proposal is spot on.”

Taylor said his bill would include the outcomes-based funding, saying it’s what’s “transformative. We’re giving them extra money to get there and we’re rewarding them when they do get there.”

Other provisions

Other elements of the bill include:

• Increase the base funding per student from $5,140 to $6,030.

• Eliminate outdated formula elements, including the high school allotment and cost of education index.

• Allow property-wealthy school districts to obtain transportation funding.

• Establish funding for dyslexic students by creating an element in the school funding formula.

• Spend $100 million more to help fast-growing school districts pay for the operational expenses of opening new facilities.

• Increase funding for dual language programs, which provides instruction in English and another language, most commonly Spanish.

• Reimburse school districts if they cover the cost of students' tutoring outside of the district.

• Expand career and technology funding to the sixth and seventh grades.

• Increases the state's teacher minimum salary schedule. Under law, school districts can't pay below the minimum salary schedule, and districts often pay above the schedule to be competitive. The schedule is tied to how much the state contributes to teachers' pensions, so the state's portion would increase.