To fix broken system, Texans must understand it
Amarillo Globe News
July 13, 2005

Guest Column: Byron Schlomach, 
Opinion Letters:  john.kanelis@amarillo.com

AUSTIN - With the special session on school finance and taxation currently under way, Texans need basic knowledge in order to cut through the political rhetoric.

Much of how our current system operates is not exactly how it was intended to operate, and it remains broken.

Here are some easily understood facts about how the system does - and does not - operate.

Fact No. 1: Rising property values help finance state government. Through the funding formulas and the Robin Hood equalization system, the state determines how much money each school district is entitled to.

If local property taxes are less, the state makes up the difference. If they are more, the state takes the difference. Rising property values mean less state money is needed, freeing state resources to fund other things.

Fact No. 2: In the 1990s alone, inflation-adjusted per-student spending increased by one-fifth and has tripled since 1970. No more than a handful of school districts have failed to grow spending in excess of enrollment growth and inflation.

Fact No. 3: The United States gets a poor rate of return on its education spending compared to other nations. The Dallas Federal Reserve Bank, the Organization for Economic Cooperation and Development, and the World Bank all have noted that the U.S. academically achieves less than other nations that spend far less on public education.

Fact No. 4: Only half of current public school employees in Texas are classified as classroom teachers.

Fact No. 5: There are currently fewer than 15 students for every teacher in Texas. In 1960, there were about 24 students for every teacher. Teachers once outnumbered non-teachers, and SAT scores were as good or better compared to today.

Fact No. 6: Robin Hood is a scapegoat. Whether an administrator or school board member is from a rich district or a poor district, Robin Hood is always at fault for the district's academic woes. Either it is claimed too much money is taken away from the district or not enough is received. Only more money will cure whatever ails a school district, according to local officials.

Fact No. 7: Well-constructed economic research from noted economists Eric Hanushek, Carolyn Hoxby and Richard Vedder, among others, repeatedly shows that additional funding for schools is not the answer. The largest single employer, though not the largest industry, in virtually every community is the local school district. Many legislators support more money for schools, even though they know it will not necessarily improve test scores or dropout rates.

Fact No. 8: Arguments for equity are arguments for spending and spending alone; not about kids. Equity guarantees that no district can spend significantly more than any other. If one district's taxpayers agree to spend more money, every district's taxpayers spend more money through the state system. (See Facts 2 through 5.)

Fact No. 9: The system is designed, purposely or not, to extract more taxpayer money. The courts have said that when districts reach a tax rate limit, we have a de facto statewide property tax, which is illegal. Therefore, the state must constantly bribe districts to reduce tax rates with more state money. Meanwhile, property values continue to rise, reducing the state share, giving an excuse for local officials to raise rates back where they were.

Fact No. 10: School districts are encouraged to tax at the maximum possible rate. The greater the local tax rate, the greater the state subsidy to local districts.

Currently proposed legislation would make this even worse, guaranteeing future biannual "buy downs" of local tax rates with state money.

Fact No. 11: School officials are encouraged to categorize children. This is because districts get more money for bilingual education than for regular education.

Unfortunately, current legislation does little to solve the problems outlined above.

Ultimately, the only solution is for the state to define a satisfactory educational system as one that provides enough teachers and classrooms and materials to teach capable children the basics, including English immersion.

We already more than achieve such a level of funding. We just need to use it better.

Byron Schlomach, who holds a doctorate in economics, is the chief economist for the Texas Public Policy Foundation, a non-profit research institute based in Austin.