AUSTIN (KXAN) — The blue-ribbon group of Texans charged with recommending solutions to a woefully outdated school finance system released their report. Part of the advice delivered by the Texas Commission on Public School Finance recommended more than a billion dollars in new money if performance measures were attached. 

Nicole Conley Johnson, the Chief Financial Officer of Austin Independent School District, held a spot on the panel and tells KXAN many parts of the current way schools are funded are decades old.

Her district, AISD, warns it might have to close or consolidate up to 12 schools in part because of constraints funding formulas put on a changing district. For example, a matrix meant to adjust wages to the cost of living – known as the Cost of Education Index – hasn’t been updated in 30 years. Over the past three decades, Austin has grown in overall population, number of low-income families, and the number of students who speak English as a second language. 

“We require more and more from our students. But we don’t have the funding to provide the necessary services to get them where they need to be,” said Conley Johnson.

For the first time in decades, the right people, have the right focus to overhaul school finance – Gov. Greg Abbott, Lt. Governor Dan Patrick, and the presumptive Speaker of the Texas House, Rep. Dennis Bonnen, R-Angleton.

Chair of the House Public Education Committee Dan Huberty, R- Houston, says the only thing that can stop lawmakers – are the lawmakers themselves. 

“Everybody recognizes that the eyes of Texas are upon us – especially the parents and the students,” said Rep. Huberty.

The recommendations are expected to be funded by a myriad of sources: general revenue, oil, and gas severance taxes, and possible money from the economic stabilization fund – or “rainy day fund”.

The Commission recommended offering school districts for outcomes like offering dual language programs, having more students reading by Grade 3, and paying teachers more based on their performance.

“We’re going to fund and put into programs that are outcomes based, solutions-based, that get results. And we’re willing to pay for that. Just putting more money into it and keeping the system as it is, that’s not an outcomes-based solution,” said Huberty.

One of the other recommendations from the school finance commission report was capping property tax increases at 2.5 percent growth from the year before. The theory is – if you cap the taxes lawmakers would be forced to pick up a larger share of the tab for public schools. Most public school funding derives from local property taxes.

The cap is an item pushed heavily by Governor Greg Abbott. 

“Texans expect and deserve for their leaders to solve this critical issue,” Gov. Abbott wrote in a statement following the publication of the Commission’s report,” the state must reform the broken Robin Hood system and allocate more state funding to education.”

Lieutenant Governor says he’s committed to passing the reforms and is confident the Senate – which he presides over – will support them. 

Rainy Day Fund changes

The Commission recommended more than 30 items.

One idea suggests redirecting a portion of taxes on oil and gas currently designated for the “Rainy Day Fund”.

“I think taxpayers look at us and say there’s money there to be spent, let’s be pragmatic about it,” Huberty said, disclaiming that this money would be in addition to more stable funding sources. 

There’s a reason why taxes from oil and gas production can’t stand alone in supporting public education and alleviating property taxes. Kirk Edwards, president of Latigo Petroleum, pointed to the recent drop in the price of crude oil.  

“The oil prices now in West Texas have fallen to $48 a barrel and the guys that are producing out here, since there are so many bottlenecks going on with production in the Permian Basin, they’re literally getting $38 per barrel,” Edwards explained. 

The commission’s report says “while oil prices may fluctuate, the rate of growth in the Permian Basin is stable and will provide increased revenues for years to come as new pipeline capacity in 2019 will bring two million barrels per day, followed by an additional two million barrels per day pipeline capacity in 2020.” 

Edwards said industry leaders are optimistic the prices will go back to the $50-$60 range, but if it doesn’t, it will dramatically affect the tax revenues of the state.  

“The energy industry is here to help however we can,” Edwards said. “The state needs to be very conservative on their predictions on what the oil and gas industry can do to help with that number.” 

School leaders are hopeful the school finance system could change once lawmakers head back to the Texas State Capitol in January. Dr. Royce Avery, superintendent at Manor ISD, plans to stay engaged with lawmakers and his local community as legislators go more into detail when the legislative session begins. 

“I think the focus needs to be on giving schools and school districts an opportunity to have the necessary funding to do the things we need to do for a growing population of Texas citizens and students,” he said. 

Manor ISD has had to make difficult decisions from year to year, according to Avery. The district sometimes can afford to have certain programs one year, but the situation the following year could be different. 

“As your district grows, you have to find additional personnel to come in to support the educational environment,” he said. “You have to give kids innovative ways to be able to stay connected on the educational front, on the academic front. It impacts us greatly across the board when you have a pot of money to be able to utilize as you grow. As the needs of your kids increase, you have to divert internally for additional dollars to help those areas.” 

Other recommendations

  • The recommendations in the report include: 
  • Creating a new dyslexia allotment (estimated at $100 million annually) 
  • Creating an extended year incentive program (estimated at $50 million annually) to provide a half-day of funding to school districts opting to offer additional instructional days up to 30 days beyond the scheduled end of school year for students in pre-K through 5th grade opting/needing to attend based on proficiency 
  • $200 million every two years in funding for districts that implement an educator evaluation system, with higher salaries for their most effective teachers 
  • $20 million annually to expand the Career and Technology Allotment to include courses in sixth to eighth grade 
  • Jim Nelson, interim superintendent of Ector ISD in Odessa, stressed the need for a solid foundation of funding for school districts. 
  • “We’re getting 80,000 more kids a year,” Nelson said. “The Permian Basin is growing leaps and bounds. We added 1,000 kids just here in Ector County for 2018-19. We expect to see that kind of growth over the next two years. We need a stable and growing source of revenue.”