One of the Texas Legislature’s biggest priorities this session is to determine the fate of House Bill 3, a finance bill that increased teacher salaries, funded pre-Kindergarten programs and decreased tax rates.
The bill, considered to be a transformative Texas education bill by the Texas Education Agency, originally passed in 2019 — roughly a year prior to the Covid-19 outbreak.
Now, nearly a year into a pandemic that has some teachers educating students from their living rooms, the financial future of Texas education is uncertain.
For Brandon Rottinghaus, a Texas politics professor at the University of Houston, that begs the question: Can the Texas Legislature make good on promises from HB3 from last session?
“This is the million-dollar question, almost literally, for the legislature in 2021. This is an expensive proposition, the sticker price on the fiscal note for HB3 will reach into the double-digit billions, possibly up to $14 billion,” Rottinghaus said. “This is a challenge in normal times, and an even greater challenge when you’ve got an uncertain economy and a crater in the budget that has to be filled.”
That crater is the budget hole caused by Covid-19. To top it off, more students are being pulled out of schools, thus hurting school district finances as funding is partially decided based on school population and attendance.
The attendance problem
The school districts that would feel the most financial pain from decreased attendance would be those in urban and rural areas, where there isn’t much budget flexibility.
However, the TEA said last year that school districts may not be held accountable for daily attendance numbers for the first two six-week reporting periods, with some conditions. Instead, that would be replaced with projected numbers based on past years.
But some financial experts like John Diamond, director of the Center for Public Finance at the Baker Institute for Public Policy at Rice University, are uncertain how Covid-19 will affect the number of students pulled out of schools.
“In general, what we do know is schools are going to have less funding,” Diamond said. “The question is, how much? How much of that will be offset by federal emergency programs or state emergency programs?”
Diamond guessed that urban schools have seen the largest population declines, though he didn’t have hard data on the subject as data is lacking due to the infancy of the situation.
Deep pockets?
With that in mind, Rottinghaus said state lawmakers are convinced they can make good on financial promises made in HB3.
District budgets are being considered for the next two years, something that will depend on the state budget. And while common expectation might be that Covid-19 has wrecked finances, Texas’ pocketbook might not be as hard-hit as first expected in the beginning of the pandemic.
“If (the legislature) will continue that funding (from HB3) to fund school districts, that would be a great thing for Texas,” said Ken Gregorski, superintendent with Katy Independent School District.
In January, Texas Comptroller Glenn Hegar said that the state was looking at a $112.5 billion biennial budget, per the Texas Tribune, and was facing a $1 billion shortfall in its current budget. That’s compared to figures as high as a $4 billion shortfall earlier in 2020.
The TEA recommended a roughly $65.3 billion budget, a 2% increase from the previous biennium, said Senator Carol Alvarado, who represents district six, a swath of city that covers North and East Houston. Alvarado highlights education in her work.
“We’re going to continue to look for new funding sources. Hopefully we can dip into the rainy-day fund like we did before,” Alvarado said. “We have about $10.7 billion in the rainy-day fund. There’s a little cushion there if we need to allocate something there to keep things like HB3 intact.”
Other bills
State lawmakers have filed over 300 education-related bills for this legislative session, covering everything from allowing concealed handguns on school campuses to providing mental health services and education.
Other bills concern school finances, such as HB586, which proposes schools may borrow money from the Texas Public Finance Authority for certain expenses. It would also grant authority to issue bonds.
Though there are a vast number of bills being put through the legislature, only about a sixth of them will become law, Rottinghaus said.