Texas lawmakers, group to offer bills to fund equalizing school facilities.

DALLAS -- A Texas Senate committee and an education association plan to introduce bills that could unleash more bond issuance and help equalize school construction funding when the state legislature convenes in January.

But they are waiting to finalize the details of the legislation until the Texas Supreme Court issues a decision on whether to uphold all or part of district court Judge Scott McCown's ruling affecting more than 1,000 state school districts.

About a year ago, McCown ruled that Texas' latest share-the-wealth school finance law was constitutional as far as it went in helping shift property taxes from rich to poor districts for operations and maintenance funding.

But McCown said that the state legislature needed to come up with a better plan for equalizing school construction or capital improvements funding by Sept. 1 of next year, or he would halt education bond issuance.

To comply, state leaders appointed a Senate Interim Committee on Public School Facilities to come up with a plan to present to the Texas legislature while other groups also worked on alternative solutions.

"Regardless of what the court does, we will have to address the school facilities funding issue," said Teel Bivens, a state senator from Amarillo, who is the chairman of the Senate Interim Committee. "But I will wait until the court decision to have the bill drafted."

Bivens and other sources said most people are speculating that the Supreme Court will release its opinion later this year before the Texas legislature convenes on Jan. 11.

Sources said the judges wanted to wait until after the Nov. 8 election before making what would be a fourth Texas Supreme Court ruling on the decade-old school finance controversy.

"They must have it written. They have never taken this long before," said Chuck Kobdish, an attorney with McCall, Parkhurst & Horton, a Dallas law firm that represents hundreds of districts in the state. "Usually, three or four months is long enough." The appeal hearings were held in May.

This fall the Senate Interim Committee recommended a plan that would provide supplemental funding for school districts wanting to build or renovate facilities. Essentially, the plan would guarantee a tax base of $280,000 per pupil for the facilities financing system and would cost an estimated $178 million to $261 million for the 1996-97 biennium.

"The state has a responsibility to help local school districts pay for building classrooms just as it helps districts pay for educational programs," Bivens said in a prepared statement this fall. "This plan will address the basic needs of local school districts and satisfy court mandates requiring facilities funding."

In simple terms, Bivens said the state would pay a portion of a school's debt service for construction and capital improvement relative to their wealth.

"This is the ... most effective way to do it," he said.

Kobdish agrees that the plan appears feasible. "The committee did about as well as they could under the circumstances," he said. And "the members are knowledgeable and powerful senators. Anything they support will be taken seriously."

However, Fredric Weber, an attorney with Fulbright & Jaworski, a Houston law firm that also represents hundreds of school districts, said many unanswered questions remained, including whether money spent for school facilities would affect state aid for school maintenance and operations.

Weber also said the guaranteed yield payment is not weighted, and as a result would not take into account factors such as growth rates and construction costs.

On the positive side, Weber said: "The property-poor districts would be able to issue more debt because they could borrow against guaranteed yields in the future."

Others have more strenuous objections and have countered with proposals of their own. Craig Foster, executive director of the Equity Center, which represents about 300, or about half, of the low-wealth school districts in the state, said that fewer than 100 school districts could immediately take advantage of the proposal recommended by the Senate Interim Committee.

Foster said the committee's proposal fails to provide poor school districts with funds to catch up to wealthier district and correct urgent school facilities repair and expansion needs.

"The Senate Interim Committee on School Facilities has drafted a program to equalize funding for school facilities through a separate guaranteed yield system, which will improve the ability of many districts to meet their future construction needs and existing debt service," an Equity Center report said. "Yet the proposal does not deal with the fundamental problem that has deepened over the years."

Instead, the Equity Center is recommending that the state legislature submit a proposal to Texas voters that would call for the issuance of $1 billion in bonds to help repair unsafe and inadequate facilities in low-wealth school districts.

Foster said the center is now gathering information from districts and plans to lobby state legislators after the reports and photos are compiled.

"These pictures are going to shock the legislators," he said. "There are lots of our districts that have leaking roofs, that have pails in the classroom, that have wallboard falling off and have restrooms with broken toilets, sinks, and urinals."

Foster said the Equity Center will draft the legislation for introduction when the Texas legislature convenes in January. It would call for a $1 billion state general obligation bond issue, to be guaranteed by the Texas Permanent School Fund, to be repaid over 15 years.

"It's not a lot of money in a $16 billion system," said Foster, who predicted good legislative support.

Others, however, expressed strong doubts. "It's unrealistic," Kobdish said. "I would be very surprised if it passed. The political and economic realities are that it would be a hard sell."

Weber agreed. "Money will be tight this session," he said. "It will be difficult to get it passed if the state has to spend money for it."

Meantime, the Equity Center and other members of a coalition of Texas school groups is making additional recommendations to equalize school facilities and equipment funding.

The needs appear to be significant. In a recent survey, the Texas Education Agency said $1 billion in new buildings was needed to ease overcrowding and substandard classroom space. At the same time, an additional $1.7 billion was identified for libraries, gyms, laboratories, and to replace scores of portable classrooms.

In the past, the state has not given direct funding for facilities, except for a $50 million emergency assistance program approved several years ago.

"The $50 million was a drop in the bucket," Foster said.

He estimated that several hundred school districts in Texas could immediately benefit from an emergency repairs and improvement program if voters approved the $1 billion bond issue.

The school facilities proposals are some of the latest developments in the 10-year-old controversy and legal battle over school finance reform in Texas.

The Legislature has tried to draft several laws to distribute state funds more equitably to school districts, but they have continually been appealed to the courts.

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