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Tribune spreads myth of underfunded Texas schools

By   /   December 22, 2016  /   News  /   No Comments

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SCHOOLED: While Texans pay half of their local property taxes to schools, voters get little information about the full cost of bonded indebtedness.


The Texas Tribune has been trying to convince its readers that the blame for their sky-high property taxes belongs to the Legislature and not the school districts that are actually setting those tax rates.

Tribune Executive Editor Ross Ramsey insists that school districts are collecting higher taxes in order to offset less funding from the state.

His contention is dead wrong. On a per-student basis, state funding has dropped $339 over the last decade, according to Ramsey’s own numbers, but the local increase has been $990, three times the amount of that reduction.

The large majority of the increase has nothing to do with offsets. That should be the end of his argument right there.

Now, Texas school districts do get 41.4 percent of their funds from the state, while the national average is 46.4 percent, according to the statistics from the National Education Association. But that doesn’t mean the state is underfunding its schools.

For one thing, that gap would be a couple points closer if money redistributed through the “Robin Hood” system were properly accounted as a state tax.

Ramsey brings state Rep. Jimmie Don Aycock — the House Public Education Committee chairman and a classic open-wallet Republican — into the argument, to mutter darkly that lawmakers will suffer the consequences if they don’t approve even more spending to relieve the oh-so desperate school districts. The chickens, he writes, “will eventually come home to roost, especially if those school officials tell their voters about the problem” of stingy lawmakers.

For years the media have been telling Texans they’re stingy with school funding. For some reason, Texans believe them, despite the evidence in front of their eyes in the form of shiny palatial campuses, stadiums and gyms across the state.

Those excellent facilities are actually what sets Texas apart, and what causes much of the misunderstanding.

Texas is right in the middle of the pack in per capita K-12 education funding — 26th out of 50 states (we’ll exclude Washington DC), according to NEA stats. On a per-student basis, it’s a little lower, as the state’s population skews young.

But Texas is just 5 percent lower than the national average in per capita school funding, and if you adjust for cost of living, it’s actually a bit above average.

What sets Texas apart isn’t the total amount of resources dedicated to schools, or which level of government levies the taxes — it’s where that money gets spent.

Texas spends way more than average on school facilities, while spending way less than average on what takes place in the classroom.

The statistics that one often sees in newspaper reports on the supposed stinginess of our system — these numbers that put Texas 39th or 44th or something in some manner of school spending — are generally calculated from “current expenditures,” a category that excludes infrastructure and debt. And that’s where Texas spends big.

Texas ranked 10th in capital outlays in 2012-13, the most recent year for which the NEA has data. When you combine the high infrastructure spending with the low classroom spending, you end up back in the middle.

However, Texas isn’t fully paying for all of that infrastructure yet. Around the state, districts have run up obscene debts, thanks to the peculiar incentives of the state’s school financing system.

Take the two basic tax caps that every homeowner is familiar with — the $1 per $100 of valuation to support school operations, and the $0.50 per $100 to pay off school bonds. Virtually all of the school districts across the state reached their operations cap long ago, meaning the only real discretion they have, the only money they get to play with, is in school bonds.

Add in the fact that those bonds are relatively cheap, thanks to a state guarantee that dates to 1983, and you get a debt explosion.

From 2006 to the present, total school bond debt in Texas has gone from $40 billion to $74.9 billion outstanding. That debt will require $119.3 billion to repay.

By comparison, Texas spends $61 billion on K-12 education a year.

The only other state that even comes close to Texas’ debt-heavy approach is South Carolina; the two states have double the national average in per student debt, and are 29 percent higher than the runner-up, according to Census data.

Ramsey bases his entire argument on the percentage of total school funding supplied by the state and the districts themselves. He notes that state support has actually increased over the last decade, but not as fast as student population, which is correct.

“In 2008, the state took responsibility for 44.9 percent of the total cost, or about as much as the local districts spent,” he writes. “Now, the locals are paying 51.5 percent to the state’s 38.4 percent.”

The relative percentages are nearly meaningless. We could point out that when you combine all state and local government spending, Texas spends the fourth highest percentage of its budget on education, out of all the states.

That doesn’t mean Texas spends a lot on education; it actually means Texas spends less on other things. A ratio just tells you one thing’s size compared to another; it doesn’t tell you anything about its actual size.

This number does: 15 years ago, Texas schools spent $26.2 billion from all sources — state, local, and federal — while in 2017, Texas schools will spend $26.2 billion just from property taxes.

The tremendous growth in local property tax collection has been driven by a booming real estate market — new construction and property value appreciation have been strong for a decade. Ramsey puts the growth in property value taxable by schools at 67.2 percent from 2005 to 2014, from $1.22 trillion to $2.03 trillion

This allows schools to levy higher taxes every year without increasing tax rates. But the burden felt by taxpayers grows all the same. That’s what’s got people complaining, not abstract ratios.

Somehow, the voters by and large haven’t realized the contradiction in complaining about property taxes while approving school bonds.

When you vote for spending, you vote for the taxes to pay for that spending, either now or later. Politicians may promise reform, but nothing changes the math.

RELATED: Midland tests notion that rich schools are always better

The booming housing market also makes it easy for school districts to sell their bonds to voters with a catch-all justification of “growth.” The voters rarely catch on to the disproportion between 200 new students, say, and $200 million in debt.

In 2016, voters around the state approved 86 of the 114 school bond measures put before them, according to the Bond Review Board. The ones that were rejected tended to be smaller issues, perhaps because the numbers are more relatable in small towns.

Whatever the reason, out of $7.5 billion in new school debt put before them this year, Texas voters approved $6.9 billion.

That’s $11 billion or so in new property taxes due, no matter how much you shout at the county assessor.

Contact Jon Cassidy at [email protected] or @jpcassidy000.


Jon Cassidy was a former Houston-based reporter for Watchdog.org.