• by María “Cuca” Robledo Montecel, Ph.D., and Albert Cortez, Ph.D. • IDRA Newsletter • September 2003

Dr. Albert CortezDr. María “Cuca” Robledo Montecel, Ph.D.In the final days of the 2003 Texas legislative session, policy watchers shook their collective heads. On the one hand, people were thankful that some bad policy was set aside. On the other, they were disappointed that the state body lacked the political will, and in some cases the leadership, to do what was needed to improve Texas schools.

The Texas Context

As the Texas Legislature began its final deliberations, observers proclaimed that it was a session that fell short in many areas. Facing a multi-billion-dollar shortage in revenue, many law-makers left themselves limited options by committing to no increase in state taxes.

Education at both the grade school and higher education levels was subjected to significant cuts, as were other programs such as child health insurance – issues significantly impacting Texas children and families.

And finally, the new conservative political leadership in the state’s House of Representatives further compounded the challenge by engaging in bitter partisan battles that caused a dramatic flight by liberal and moderate legislators in the latter days of the session, bringing legislative activity to a standstill for a critical four-day period.

The larger-than-expected budget shortfall also caused the session to take an early negative bent, with bitter battles waged over the size and targets of state budget cuts. Major non-education issues included insurance (tort) reform and an unusual attempt to re-draw U.S. congressional boundaries within two years of the last major re-alignment (rather than the once-per-biennium normal cycle).

These issues bitterly divided the state legislature along partisan lines and spilled over into most other areas being considered. Against this hostile and contentious backdrop, little substantive change was possible.

This article provides an overview of key education issues faced by the legislature, including public school finance, the use of public money for private schools, school holding power, access to instruction, and access to higher education. IDRA’s position on these and other key education issues are further outlined in the March 2003 issue of the IDRA Newsletter as well as on the IDRA web site, www.idra.org (Robledo Montecel and Cortez, 2003).

Public School Finance

Anxious to flex their new power in the opening days of the session, many conservative Texas legislators who have opposed the state’s equalization of school funding rammed a proposal through the public education committee. It would have eliminated the existing public school funding system and established committees to develop an alternative funding system.

But when many legislators came to realize that close to 900 of the state’s 1,000-plus school systems benefited from the so-called “Robin Hood” feature of the school funding system, the move to discard the existing public school funding plan quickly lost momentum. No alternative funding proposal surfaced until the last weeks of the session.

After months of efforts to garner sufficient support, the House leadership re-surfaced a modified school finance plan that provided an additional $150 per ADA (average daily attendance) in state funding to all school districts for each year of the next biennium. The ploy to sweeten the pot was designed to dampen school leaders’ opposition to the original House plan.

Unfortunately, the trade-off also called for sunsetting the current funding plan in 2005. Efforts to modify the House proposal to ensure comparable or greater equity in any new system were turned back, and the bill was adopted by the Texas House of Representatives in late April. The Senate rejected the House plan in favor of a different proposal crafted under the leadership of Lt. Governor Dewhurst.

The Dewhurst plan also called for major revisions to the Texas public school finance system. In this plan, the existing three-tiered funding system would be replaced by a new two-level plan. Tier 1 provided approximately $4,300 per pupil and was to be funded, in part, by a new 75¢ state property tax.

The second tier was similar to the current Guaranteed Yield system in that it would guarantee every school district a total of $32 per penny of local enrichment tax effort. For example a school district whose property tax base yielded only $4 per penny would be provided an additional $28 in state aid. A wealthier district that produced $28 per penny of local tax effort would be provided an additional $4. In contrast to the current system, school districts whose property wealth produced more than the $32 guaranteed level would be allowed to keep the extra revenue rather than surrendering the excess un-equalized revenue to the state to help pay for the overall cost of education in the state, as is the case in the existing funding plan.

The proposal required adoption of a constitutional amendment re-instating a statewide property tax, which is currently prohibited by the Texas constitution. If the state property tax was approved by the majority of Texas voters, local school property taxes would be reduced as the state assumed a larger portion of local school costs.

The Dewhurst plan also called for an expansion of the sales tax base by including certain services currently exempted from state sales taxes and the dedication of certain revenues to support public education.

In contrast to the House plan that essentially eliminated the current funding system but provided no specific alternative, the Senate plan modified the finance system, but maintained many of the critical equalization features, including tax limits and recognition of district and special population costs. The significant differences between the two plans and major tension between House and Senate leaders resulted in a legislative stalemate; no major plan was passed during the regular legislative session.

To help local schools cover some of their rising costs, the legislature did appropriate an additional $110 per student for each year of the upcoming biennium. A special session is expected to be convened, possibly in the winter but more probably in the spring of 2004, after special legislative committees have had opportunities to develop possible alternatives.

Using Public Tax Money to Fund Private Schools

The debacle on school finance was mirrored in efforts to divert public money for private schooling. Although voucher proponents were salivating at the notion of having some of the state’s political leaders openly supporting their cause, little headway was made on the issue after an initial flurry in the early weeks of the session.

A House education committee plan to force 11 of the state’s largest school systems to participate in a “pilot” voucher plan met with serious early opposition but was eventually adopted by the House Committee on Public Education on a 5-3 vote.

Although the initial plan called for unlimited student participation, efforts to make it more palatable to local school leaders led to incorporation of amendments that limited the amount of revenue that could be diverted to no more than 5 percent of a district’s budget. The amended version also limited the number of students that could be funded to no more than 3 percent of a district’s students.

The so-called pilot voucher program would have initially diverted more than $250 million of state funding into private schools in Texas. After the 2005 school year, the program would have been expanded to include any school district in which the majority of local school board members voted to participate in the state voucher activity.

The early success of voucher proponents quickly lost momentum as coalitions of public school organizations and community-based advocacy groups expressed their concerns with the plan. These efforts resulted in significant opposition to the measure in both the House and Senate as legislative members began to recognize implications associated with adoption of those proposals.

Even with the later revisions, most Democrats and many Republican members expressed reservations about the plan, leading voucher proponents to withhold their proposal from a vote by the full House membership. Even if the House’s school voucher proposal had been adopted, stronger opposition to the plan was expected to surface in the Senate, with final passage deemed doubtful.

Later efforts to append pilot voucher provisions onto other House plans were turned back. Undeterred, even before the close of the regular session, voucher proponents vowed to resurface the issue during the anticipated special session on public school finance.

In related efforts, voucher proponents also attempted to promote the use of state funding for what have come to be called “virtual charter schools” – used to describe education efforts that proposed to use technology to deliver instruction in non-school settings. In this variation of diverting public funding to private education ventures, the state would have been required to provide funding for students receiving home schooling, either directly or by reimbursing parents for purchasing computer hardware and software developed and sold by private vendors.

State funding for virtual (online) charter schools was also proposed. Support for these proposals came from voucher proponents as well as private sector groups who recognized the benefits of state adoption of such plans. All of these efforts to divert public money to non-public schooling were eventually rejected, but only after extensive debate and significant pressure on legislators from the pro-voucher camps, efforts effectively countered by a coalition of groups committed to keeping public money concentrated in public schools.

School Holding Power

Despite early optimism that the Texas legislature would finally get around to significantly improving the way it counted and reported dropouts, very little was actually accomplished during the 2003 session. Although the state did modify its procedures in order to more closely track the National Center for Education Statistics (NCES) dropout procedures, no changes were made to the process used to categorize different pupils for dropout counting purposes.

As a result, Texas will continue to exclude as non-dropouts students who have supposedly transferred but for whom no enrollment information is received. It will also continue the current practice of excluding pupils who say they are enrolling in GED programs and students who have earned all their credits but were denied a diploma because they failed the exit level TAAS. None of these students will be counted as dropouts.

Because the state will continue to use its extensive number of “leaver” codes to diminish the actual number of dropouts reported, and since NCES accepts whatever data is provided by the state (using its own state-level definitions), adoption of NCES procedures is not a significant improvement.

While some members considered introducing legislation that would have improved the state’s dropout counting process, strong opposition to more accurate dropout procedures surfaced from state administrator’s groups, school board organizations, and some legislators more concerned with protecting the image of schools than acquiring better dropout data on behalf of students.

During deliberations over the plans, opponents expressed concern that schools would be “punished” by having their accountability ratings downgraded if true estimates of local dropouts were developed. Some noted that opposition may have been weaker if more accurate counts were simply generated but not used for accountability purposes. However, advocates noted that lack of accountability would make such numbers essentially useless for school improvement purposes.

Even as new reports surfaced documenting the widespread abuse associated with Texas dropout reporting procedures, the state continued to avoid improving its dropout counting procedures. Until local communities refuse to accept the obvious manipulation of dropout data, nothing will be done to address the issue, and the state will continue to suffer millions of dollars in lost revenues.

More importantly as long as knowing the real status of our students is not a state policy reform priority, thousands of students will continue to be lost – not only from schools – but also reflected in losses in tax revenue and income that comes from decreased levels of education in Texas residents.

Access to Instruction

Early in the legislative session, a few conservative legislators announced their intent to abolish the Texas requirements related to bilingual education and English as a second language (ESL) instruction for students who are identified as being limited English proficient (LEP). But strong opposition surfaced and included a cross-section of groups such as the Texas Association for Bilingual Education, the Mexican American Legal Defense and Educational Fund, and LULAC. The strong objections voiced by many Hispanic leaders to efforts to weaken state programs serving English language learners no doubt contributed to an eventual decision to leave current requirements unchanged.

The continuation of policies that recognize the need to provide specialized instruction for children enables Texas to remain among those states that still require schools to address the unique language-related needs of students in the process of learning English, providing an alternative to xenophobic policies in states such as Arizona, Massachusetts, and California.

In a related development, however, the state education agency – facing reduced staffing created by legislative cuts in the state agency budget – recommended that bilingual and ESL monitoring visits be reduced from three- to five-year intervals. Some local districts’ desire to reduce state compliance oversight, taken in tandem with some legislators’ push to reduce state monitoring efforts led to the adoption of policies that may reduce the extent of state monitoring of compliance with program requirements.

Given the anticipated reduction in state oversight, the role of communities in ensuring local compliance with state and federal requirements will become even more important. Though the state may be more limited in its efforts to protect the rights of LEP children, advocates should note that the Office for Civil Rights also has jurisdiction in this area and should be contacted if violations in requirements related to the education of language-minority children are suspected.

Access to Higher Education

Although proponents of reforms in higher education approached the current session with high hopes, budget cuts to most institutions caused most advocates to focus on retaining much of what had been acquired during past sessions. Despite efforts to hold the line, institutions of higher education suffered from across-the-board cuts (7 percent) as well as targeted cuts in selected higher education programs.

In contrast to past sessions where policies to expand the number of minority pupils were a priority, little was heard about the status of the state coordinating board’s plan for “closing the gap,” which had been the focus of extensive discussion prior to the 2003 session. Ironically, preliminary data on progress made toward the coordinating board’s goals had revealed that the state was already lagging behind in achieving its five-year targets, strongly suggesting that more or different strategies would be required.

Rather than expanding its efforts, proposals to “cap” the percentage of pupils ensured admissions into Texas’ major universities under the state’s Ten Percent Plan were introduced and seemed headed for adoption. Senators West and Van De Putte raised last minute opposition as they were concerned with the possible impact of the senate proposal and the lack of public hearings on the issue. This led to a filibuster, resulting in the rejection of that proposal in the closing hours of the 2003 session.

Rather than increasing financial aid and student support programs, legislators spent more time debating proposals to increase course requirements, increase student tuition and fees, and otherwise limiting , rather than expanding, student access. Shortage of state monies, coupled with a need for the infusion of new revenue into state-funded institutions contributed to adoption of new provisions that provide expanded local discretion for state colleges and universities to increase local tuition without state approval.

To their credit however, state lawmakers did create a new group to monitor the impact of those increases on university access. In contrast to past sessions, higher education lost more than many sectors dependent on state funding.

Post session analyses of higher education cuts indicated, however, that not all institutions suffered equally. The University of Texas and Texas A&M University systems suffered proportionately smaller cutbacks compared to other state-funded colleges and universities.

Though the recent U.S. Supreme Court decision on affirmative action will allow Texas colleges to expand efforts to increase their diversity, the cuts in higher education funding may inhibit the efforts of many to increase diversity of their students and staff.

Reform in an Era of Budget Shortages

Given the importance of the state context in policy reform efforts, researchers have noted that adoption of large-scale education reforms was always much more difficult when state monies were limited. Though speaking of school finance reform, that observation is no doubt applicable to many other education issues.

In three decades of monitoring legislative developments, IDRA has noted that access to additional revenue facilitates state transitions to new funding systems and also supports the pairing of desired changes with additional funding in order to ease or facilitate instructional, administrative or other reforms.

Texas’ unprecedented improvements in education over the last decade were no doubt supported by substantial increases in general levels of funding for education. More importantly, increased kindergarten through 12th grade funding also supported increased levels of school funding equalization, which in turn, flowed badly-needed revenue to poorer schools. Texas’ school finance reforms also targeted resources to pupils with special instructional needs.

This additional equalized funding allowed historically under-funded schools to upgrade their teaching staff and related teaching support systems and was the real engine that drove the increases in student achievement reported in much of the national media.

During that time, Texas institutions of higher education also benefited from increasing revenues, including funding delivered through the state’s South Texas Initiative, which targeted significant increases in state funding for institutions that historically received less than their fair share of higher education revenues. Spurred by growth in revenue, many of these same institutions were the pace-setters in statewide efforts to increase both the number and diversity of students enrolling in Texas colleges and universities.

In contrast to that era, the current Texas context is characterized by major revenue shortfalls. Efforts to increase state revenues by increasing taxes on current sources, including sales taxes, have met with some understandable resistance, given the regressive nature of this tax.

Unfortunately the resulting cuts in service (such as cuts in education and children’s access to health care), though expedient over the short term, may have serious long-term consequences. State leadership in searching for creative and effective solutions to the current budget crisis has been sorely lacking.

The Need for Diversifying State Revenue Sources

Though currently mired in concerns over diminishing revenues, Texas is really suffering from the effects of an antiquated tax structure. Unlike most states that fund state services from three sources including sales taxes, property taxes and state income taxes, Texas currently taps only two of the sources – sales and property taxes.

Over-reliance on this limited revenue base tends to over-burden the two revenue sources, leading Texas to have the dubious distinction of having among the highest local property taxes and sales tax rates in the country.

While booming economic times and ever-increasing real estate values had allowed the state to overcome such limitations, skeptics had predicted that state leaders would someday have to confront the state’s out-dated revenue structure. Whether political leadership will emerge to create the public will to do what is clearly needed, however, remains a question.

Until these larger policy challenges are confronted, Texas may continue to band-aid its educational programs, until as in eras past, the systems require major surgery. Unfortunately demographers note that in order to avoid social and economic declines in the upcoming decades, investment in education will be required today. The window of opportunity, though still open in Texas, became notably smaller as the 2003 session was gaveled to its close.


Robledo Montecel, M., and A. Cortez. “Public Education Reform Priorities in Texas: IDRA Perspectives,” IDRA Newsletter (San Antonio, Texas: Intercultural Development Research Association, March 2003).

María “Cuca” Robledo Montecel, Ph.D., is IDRA’s executive director. Albert Cortez, Ph.D., is the director of the IDRA Institute for Policy and Leadership. Comments and questions may be directed to them via e-mail at feedback@idra.org.

[©2003, IDRA. This article originally appeared in the September 2003 IDRA Newsletter by the Intercultural Development Research Association. Permission to reproduce this article is granted provided the article is reprinted in its entirety and proper credit is given to IDRA and the author.]