San Angelo Summit Previews Legislature's Fight Over Public School Funding in 2017

Public school finance was at the top of the agenda at the 13^th annual West Texas Legislative Summit held by the San Angelo Chamber of Commerce Thursday.

Texas public schools are funded by property taxes with supplements from the state. About 60 percent of the state expenses are for public education.

When the state legislature cut property taxes in 2006, many school districts in Texas could no longer maintain the funding-per-student enjoyed pre-cut. The state legislature set aside $6 billion per year to subsidize districts impacted by this. Over the years, as tax bases grew, many school districts obtained parity with the 2006 per-student funding levels, and their piece of the state subsidy called Additional State Aid for Tax Reduction, and often referred to as ASATR (pronounced ‘ass-a-tar’), went away.

However, today, the state still subsidizes some 200 school districts reliant on ASATR to an aggregate amount of $300 million per year.

In 2011, the state told those remaining districts that ASATR would be eliminated September 1, 2017.

That has some school districts screaming, particularly districts in high growth areas where tax bases cannot keep up with growth. Frisco ISD and smaller districts in the rapidly growing northern edges of the DFW Metroplex, as well as Lubbock, are among them.

At the Summit yesterday, Rep. Trent Ashby of Lufkin asked Sen. Charles Perry, who represents Lubbock and San Angelo in a 51-county, mostly rural district, how Lubbock Cooper and Frenship, two fast-growing school districts in his home turf, were fairing financially.

“Fast growth districts don’t have the funding to keep up with the growth of students,” Perry said.

Later, Perry said that ASATR could account for a third or more of some school district’s funding.

Eliminate what’s remaining of ASATR, Perry suggested, and some school districts will be forced to make large property tax increases. Currently in Texas, school districts can increase school property taxes up to 13 cents per $100 for the maintenance and operating portion of the tax.

To raise those taxes, school districts are required by law to obtain voter approval through what is called a Tax Revenue Election, or TRE. Midland ISD and Frisco ISD are both aiming for a 13-cent increase in TREs later this year to replace ASATR funding.

On a $355,000 home, the tax increase will amount to $444 per year.

Here is a Frisco ISD information video on the proposed tax rate increase:

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Dr. Jeff Bright, Assistant Superintendent for Business and Support Services for the San Angelo ISD, said San Angelo is not facing this problem. San Angelo ISD made a difficult decision in 2011 to eliminate ASATR. He called it a “bold and not necessarily popular decision” by the San Angelo ISD Board of Trustees because it involved increasing property taxes and eliminating a portion of the Homestead Exemption.

“Since then, we’ve held the line on spending," Bright said."We’d love to pay $50,000 per year starting salaries for teachers like they do in San Antonio or the Metroplex, but we hold the line. We won’t do it. Our board has said we need to have a balanced budget, and we need to live within our means.”

Bright said San Angelo ISD is in great financial health today and he doesn’t anticipate a tax rate increase this year.

For Sen. Perry, however, he faces a large number of districts throughout West Texas who will likely be devastated by the elimination of ASATR. These districts, because of the ups and downs of local funding due to oil field booms and bust, will never be able to reconcile their budgets. Thus, Perry seemed to be considering advocating making ASATR permanent for these remaining districts during the next session.

If he does try, the rural senator will likely find allies with the urban senators representing suburban districts experiencing high growth, like Frisco.

On the other hand, a question was brought up as to whether retaining ASATR was fair to all districts.

Bright wants ASATR to expire so that San Angelo ISD and the other 800 school districts who are no longer receiving subsidies can benefit from a $300 million annual aggregate increase in public school funding.