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coming from local property taxes and a negligible contribution from the federal government. The Robin Hood system, which collects “excess” money from rich districts and redistributes it to poorer onesworks only if there is excess money. In tight times, the system pits districts against each other in a fight over scarce resources. Most experts agree the Texas system is reasonably equitableproperty-poor districts don’t end up with too much less than property-rich districts. But equity doesn’t mean much if everyone is doing equally badly. When it comes to school finance, the Lege seems to be having trouble doing the math. All legislators will tell you they want Texas schools to be the best in the country. Most say they want to slash the property taxes that are the chief source of school financing. Many think they can do both without raising new taxes. To make these figures add up somehow is presumably the job of the Select Joint Committee on Public School Finance, appointed by Governor Rick Perry last spring to ready fellow legislators for a school finance special session. But the prospects for a special session are getting dimmer, as the Joint Committee discovers what any good math teacher could have told them all along: You don’t get more money by taking money away. Last spring the governor led the public to believe that a special session to resolve school finance was a foregone conclusion. In recent months, however, his enthusiasm has waned, and it’s easy to guess why. Though unlikely to spur another walkout, school finance reform could be every bit as ugly as redistricting, and this time divisions won’t fall predictably along party lines. The majority of legislators, including most Republicans, represent the nearly 90 percent of school districts that benefit from Robin Hood. “The governor fully expects to call a special session in April,” says Kathy Walt, Perry’s press secretary. But first he wants to be sure members in the House and Senate “agree on the general approach” to reforming school finance. That agreement could be a long way away. \(Perry may also be hoping to keep an ugly and potentially embarrassing special session out of public view until after the March primaries. Thanks to legislative redistricting, in many districts primary elections are the only ones that matter. And if the Lege can wrap school finance up, however clumsily, before summer, voters may not remember The school funding system’s heavy reliance on local property taxes means there will always be a money gap between rich and poor districts. With its higher property values, Plano ISD can always raise more, and at a lower tax rate, than El Paso. Before the state started equalizing funding more than a decade ago, the richest districts raised and spent up to 700 times what the poorest could muster. So call it Robin Hood or call it what you like, as long as property taxes fund the schools, the state will have to make up the difference between rich and poor. At the same time, there’s every incentive for legislators to end Robin Hood. Manyespecially the new wave of suburban Republican freshmencampaigned on a promise to do just that. The system has always been unpopular with rich districts, and a lawsuit against the state, started by wealthy Most experts agree the Texas system is reasonably equitable. But equity doesn’t mean much if everyone is doing equally badly. districts, claims the system takes away local discretion to raise and spend taxes as they see fit. Meanwhile, the property taxpayers who fund the system are sick of rate increases. And while property tax relief has largely been cast as a Joe-Taxpayer issue, it also represents a huge tax cut for businesses; about 60 percent of local property taxes are levied from commercial rather than residential property. If legislators are serious about eliminating Robin Hood, they’ll have to replace local property taxes with some state money. That means those dreaded two words, “new taxes” an option so many loudly rejected on the campaign trail in 2001. In the three-way tug-of-war between schools, taxpayers, and business, every legislator will have to hammer out his or her own devil’s bargain. So legislators “hope for” a session. They “expect,” “understand,” and “trust” that their governor will call one. But perhaps privately many have their fingers crossed, hoping it’ll all just sort of blow over. be the best example of the sort of pipe-dreaming going on at the Lege these days. Grusendorf, who co-chairs the House side of the Joint Committee, proposes an expanded system of standardized testing, to be carried out online. While costs for such a program are likely to be high, Grusendorf also supports cutting property taxes up to 80 percentleaving the state with almost $13 billion to make up from somewhere. Grusendorf doesn’t envision generating this money by new taxes, suggesting the state can instead scrounge the money up through some simple “tax restructuring.” This sort of wishful thinking isn’t uncommon around the Capitol at the moment. But most aren’t too precise about what sort of restructuring they have in mind. Some hard-line no-tax conservatives still pin hopes on “non-tax revenue”lottery money, state fines and fees, and return on state investments. The comptroller’s office estimated non-tax revenues would hit $7.8 billion in the next biennium. That’s hardly chump change, but you’d have to be stupid to rely on it as a major source of school funding. None of these revenue sources will keep pace with the rising costs of education. Lottery earnings are notorious for flagging over time, as lottery players get bored and discouraged. continued on page 16 12/19/03 THE TEXAS OBSERVER 5