Texas Senate OKs $563 million for schools, retired teachers

Aug. 15--With two days left in the special legislative session, the Texas Senate early Tuesday morning approved 25-6 a bill to pump an extra $351 million into the public education system over the next two years -- a $1.5 billion cut from what the House had proposed.

Tuesday morning's vote sends the watered-down version of House Bill 21 into conference committee where Senate and House members will continue negotiations that began over the weekend. Both chambers have been deeply divided on how much money should be spent on public schools and how to pay for it.

"It's meant as a bridge to get us to next session," said Senate Education Chairman Larry Taylor, R-Friendswood, who presented HB 21. "The $1.8 billion that came out of the House -- that was an unrealistic number based on that we've already done our budget."

The Senate's version of HB 21 creates a $150 million hardship grant program for school districts that are about to lose certain state funding in September. It also would pump $41 million into small school districts and $120 million to cover charter and school district construction costs.

On Monday, the Senate added to the bill a provision to create a $40 million grant program for public schools that provide innovative services for students with dyslexia and autism -- similar to a priority bill (HB 23) in the House. The Senate also folded into the bill a $212 million proposal that was in the original version of Senate Bill 19 and similar to one in HB 20 to reduce health insurance costs for retired teachers.

"As I promised, this $563 million funding package will help our retired teachers and address some of the most critical issues facing our schools without tapping either the Rainy Day Fund or the Foundation School Program," Lt. Gov. Dan Patrick said in a statement.

Sens. José Menéndez, D-San Antonio, and José R. Rodríguez, D-El Paso, told Taylor that they were concerned that urban school districts would be getting very little money under the bill.

The Austin school district, for example, which is expected to make $534 million in recapture payments back to the state next school year to help property-poor school districts, would get nothing under the Senate's version of the bill.

"If we weaken House Bill 21, we will miss an opportunity to improve public education in Texas and we'll also continue to push more of our burden onto local property taxpayers," Rodríguez said.

Less money in HB 21

The Senate has been unwilling to spend large sums of extra money on public schools without first studying how to make wholesale fixes to the state's beleaguered school finance system. Before considering HB 21 on Monday, the Senate waited until the House tentatively passed Senate Bill 16, which would create a 15-member commission to study the state's school finance system and make recommendations to the Legislature next legislative session.

The Senate Education Committee on Friday stripped $1.5 billion from the House's version of HB 21, removing a major provision that would have boosted the base amount of money all public schools get per student from $5,140 to $5,350.

The extra money would have decreased recapture payments that property-rich school districts must pay to the state to help subsidize property-poor school districts by $389 million over the next two years.

The Senate also stripped from the bill more money to educate students with dyslexia and who are learning English. Menéndez and Rodríguez tried unsuccessfully to restore both provisions into the bill.

More than 1,500 school district officials have signed a letter to the Senate supporting the House's version of the bill.

How to pay for HB 21?

The Senate wants to pay for HB 21's $563 million price tag through delaying payments to Medicaid managed care organizations in the upcoming biennium to the 2020-21 biennium. The House has steered away from using Medicaid to pay for education bills during the special session because the program is underfunded by more than a $1 billion.

Sen. Juan "Chuy" Hinojosa, D-McAllen, said he was concerned that the Medicaid method of financing was forcing the state to accumulate more debt.

"What I see happening now, we have approximately $1.2 billion in Medicaid that we're having to make up next session," he said. "We're playing catch up."

Other lawmakers were also concerned that HB 21 was a one-time infusion of money into schools and the Teacher Retirement System that isn't guaranteed next legislative session.

Taylor said on Monday that the House has agreed to using the Senate's method of paying for HB 21, but Jason Embry, spokesman for House Speaker Joe Straus, R-San Antonio, said that the House will consider using Medicaid "if the Senate will do something meaningful to help public education."

The House had wanted to delay payments to school districts in the upcoming biennium to the 2020-21 biennium to pay for the original version of HB 21. The House has also proposed tapping the state's $10 billion rainy day fund to lower retired teacher health insurance costs.

Senate Republicans on Monday reiterated their opposition to using the rainy day fund, saying it's not a permanent method to fund schools and that the fund is meant for emergencies.

"My intention is to go with the method of finance that we have here before us," Taylor said.

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