Public education advocates sound alarm on ‘broken’ school financing system

Fighting the compounding pressures of the Covid pandemic and decreasing enrollment numbers, public education advocates have been working hard to address the impact of Texas’ financing system on the chronically underfunded Austin Independent School District.

Texas School Coalition Executive Director Christy Rome met with a joint subcommittee of City Council, Travis County and the AISD Board of Trustees late last month for an update on current trends in recapture figures, which in 2021 amounted to $710,604,433 in property taxes returned to the state.

“We are sending more to the state in recapture than we are taking in property taxes to run the city,” Mayor Pro Tem Alison Alter said. “Fixing school recapture and funding in the state of Texas is the single most important thing we can do in our city to affect affordability and equity. There’s almost nothing else that would have as big of an impact on as many people.”

The Texas Legislature established the state’s recapture system in 1993 with intentions to redistribute money from property-rich districts to poorer areas, earning the program the nickname Robin Hood. Since then, it has become one of the state’s largest funding sources, totaling $2.96 billion in 2021.

“The bad news is that recapture is not really benefiting poorer school districts in our state; it is benefiting the state treasury,” Rome said. Because formulas calculated from figures like enrollment and district size cap the budget allotted to a given district, an increase in tax revenue does not correlate directly with an increase in funding. Furthermore, a lack of transparency over the movement of money within the state’s budget means that this income does not necessarily go back to funding public education.

“What we saw happen during this last legislative session was that (the state) appropriated a certain amount of funding for schools, and it turned out recapture districts collectively paid $1.4 billion more in than expected,” Rome said. “But it didn’t go to schools, because we didn’t see any increase in funding.” 

“Right now, we rank squarely in the quarter bottom in per-student spending, and we have 10 percent of the country’s students,” Alter told the Austin Monitor. Alter co-founded Just Fund It TX in 2018, helping to push reform through the 2019 Texas Legislature that reduced the trajectory of recapture by several billion dollars.

“(House Bill 3) was a step that was significant and involved real money,” Alter said. “But we have now gone through a pandemic and our students are struggling. We need to be able to provide them the resources they need to make up for learning loss, and we have to retain teachers, which will require funding.”

Organizations like Just Fund It Texas and the Texas School Coalition hope to see further reform in the future, but say it will be an uphill battle of raising awareness to get there. An obvious solution would be amending the entitlement formula itself, which hasn’t been updated to accommodate rising costs of living and education since the 1990s, Rome said. Efforts to improve levels of transparency surrounding the state budget are also on the table.

“We think this is where change and reform comes from, when those who are paying the taxes understand where their taxes are going,” Rome said.

“There’s a level of awareness that needs to happen both in Austin and across the state,” Alter said. “The future and education of our children is not a partisan issue.”

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