McCown: School Funding Solution Shortsighted

In a letter to the legislature posted at the Center for Public Policy Priorities earlier this week, guru of education justice Scott McCown called the first school funding bill radical and urged the legislature to be not so shortsighted.

According to McCown, the legislature is attempting to retreat from ‘recapture’ or the so-called ‘Robin Hood’ formulas that have for the past decade somehwat equalized the abilities of rich and poor districts to raise money for schools.
McCown doesn’t say that the logic of the entire West Orange Cove initiative has been heading this direction ever since the wealthier school districts of Texas banded together and filed the lawsuit that created the court mandate for this special session on school funding.

But we can say it: because the impoverished neighborhoods of Texas could see this coming, they tried to intervene. One distressing pattern in this round of struggle is the refusal of the Texas courts to take the intervenors more seriously, thus granting a kind of tacit permission for the turn now being taken. Under these circumstances we have a right to worry whether Texas has begun an historical reversal of the Robin Hood principles in school funding reform.

The situation is not improved by news reports that headlined recent court decisions as explicit rejections of Robin Hood principles. Those headlines may have created expectations that Robin Hood reversal is what the legislature is supposed to be doing.

McCown stays the optimistic course by arguing that any retreat from Robin Hood equality will surely be rebuked by the courts. But we wonder if legislators have a sense that court politics ain’t likely to return to the logic that Judge McCown brought to the bench when he was reviewing school funding cases. Judicial trends cannot be isolated from their political environments. And we have a right to wonder if the forces for progressive education policy will be able to stage a movement meaningful enough to compel the logics of elected judges.

McCown’s important letter is archived below:

April 20, 2006

Re: House Bill 1

Dear Representative:

Supporters describe HB 1 as the bare minimum to satisfy the Texas Supreme Court, a “Get-Out-of- Dodge bill.” In fact, HB 1 is a radical change in the law, more of a “Rob-the-Dodge-Bank” bill.

HB 1 is a Radical Change in the Law
HB 1 compresses the property tax rate from $1.50 to $1.33. It continues the current law guaranteed yield at $27.14, meaning that for every penny of property tax, the state guarantees a local school district $27.14 per student.

HB 1 then takes the radical step of eliminating recapture above $1.33, dramatically increasing the revenue gap between rich and poor school districts. For example, Highland Park Independent School District could raise $127 more per student merely by going to a tax rate of $1.34, and $2,163 per student by going to a tax rate of $1.50. In contrast, 820 school districts could only raise $27.14 more per student at $1.34, and only $461 more per student by going to $1.50. On average, the wealthiest 10% of the districts could raise $841 more per student at $1.50.

Limiting Recapture Will Hurt Your Schools and Communities.
As a matter of good policy, you want to keep all school districts in the herd tethered together. If you assign a small number of school districts exclusive rights to lush pastures with green, high grass, once the pastures assigned to the other districts no longer yield enough for their herds, they will be unable to get the political support needed for more money for better pastures. Without money for schools, their communities will suffer. Economic development flows to districts that can have great schools at low tax rates rather than those districts forced to suffer with mediocre schools at high tax rates. Recapture is good policy because it makes our individual interest our common interest, thereby ensuring fair and adequate school funding for all.

The Law Doesn’t Require Limiting Recapture
Nothing the Supreme Court has ever said requires the Legislature to limit recapture. The Court found recapture to be constitutional in Edgewood IV and speaks of it as an important feature of the system in its latest ruling in West Orange-Cove II. Supporters of HB 1 argue that the Court raised a concern about the amount of recapture. Not so. The Court discussed the amount of recapture only as a factor in determining whether districts have meaningful discretion, meaning something like 10% tax capacity for supplementation.
As long as districts have meaningful discretion, the amount of recapture is of no legal concern. West Orange Cove II at 81. Indeed, if you strip the provisions limiting recapture from HB 1, but still compress the property tax rates by 15 cents or so, thereby giving districts meaningful discretion, the amount of recapture falls automatically and is of no legal concern.

In Fact, Limiting Recapture Will Get You in Trouble with the Law.
The Court has cited recapture favorably as maintaining the very marginal equity in the current system. West Orange-Cove II at 72. Under HB 1, however, in the words of the Supreme Court, first written in Edgewood IV and just repeated in West Orange-Cove II, limiting recapture “destroys the efficiency of the entire system.” West Orange-Cove at 73 and 84-85. If the Legislature provides vast amounts of unequal supplementation for rich districts thereby destroying the efficiency of the entire system, the poor districts must go back to the Supreme Court and ask it to close the schools.

What to Do
You should compress property tax rates. However, the very same bill that compresses property tax rates should also raise the guaranteed yield and the equalized wealth level (the point at which recapture begins) in a way that 1) reduces the revenue gap between the rich and the poor as much as you can afford, and 2) takes as many districts out of recapture as you can afford.

Interpreting the Governor’s Call
If the Governor’s call allows consideration of HB 1, which limits recapture, then it allows raising the guaranteed yield and the equalized wealth level. All three regulate the same thing. Conversely, if you cannot raise the guaranteed yield or the equalized wealth level under the Governor’s call, then you cannot limit recapture.

Don’t Be Short-Sighted
Those of you not in the House pre-Edgewood probably cannot imagine how inadequately and unfairly the Legislature funded schools. Your predecessors had to fight hard for what little money they got for their schools. Whatever you estimate your school districts might temporarily gain under HB 1, if you limit recapture, thus returning the law to the pre-Edgewood era, in the future they will get nothing. Unless our individual interest remains our common interest, the wealthy 10% will eat the high, green grass, and the rest will eat weeds, if they eat anything at all.

Any Calendar Rule that Limits the Ability of the House to Express Its Will Must Be Defeated
Any Calendar Rule that prohibits you from amending HB 1 to strip out the recapture limitation, raise the guaranteed yield, or raise the equalized wealth level must be defeated if the will of the House is to prevail. We urge you to do right for Texas.

Sincerely yours,

F. Scott McCown
Executive Director
Center for Public Policy Priorities (CPPP)

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