Among all the issues the Capitol crowd turned their focus to this week, school finance and taxes are the most pressing.

With the Supreme Court ruling that the current school finance system is unconstitutional, a post-primary special session is a virtual certainty.

Speaker Tom Craddick laid out his concerns with the current system. In recent years there has been a 26.47 percent increase in teachers salaries, compared to a 61.31 percent increase in general administrative expense. Less than 50 percent of education spending goes to the classroom. Gov. Rick Perry has called for at least 65 percent of school spending to go for classroom expenses, which Craddick supports. Half the graduates going to college require remedial courses. Lastly, there are 700,000 students who Craddick said are not effectively taught English.

Craddick wants to look at those issues, as well as at November elections for school boards, a uniform start date, and end-of-course exams.

Any tax restructuring, he added, should require voter approval for tax increases for local enrichment.

Additionally, Craddick wants to see more transparency in school finances.

"Today, we have no idea where the dollars in my school district are being spent," he said. "We need to be able to, as individuals in this state, to pull up and find out what the school districts are spending, where that money goes, and also we need accountability in the system."

Lt. Gov. David Dewhurst endorsed a number of reforms, which like Craddick’s, are virtually unchanged from previous special sessions. Dewhurst endorsed a pay-for-performance plan for teachers, as well as a broad, low-rate business tax. While some have called for a tax structure that would support higher spending, Dewhurst cautioned against it.

"What’s happened by not raising taxes is our economy’s growing," he said.

Taxes, revenue and spending caps
Tax issues obviously took center stage at the orientation. In one panel, Sen. Tommy Williams (R-The Woodlands); Rep. Jim Keffer (R-Eastland); Scott McCown, executive director of the Center for Public Policy Priorities; and John Fund, a editorial page staffer, discussed tax policy. Williams started by comparing California with Texas. He noted that states without income taxes have less government than those that have income taxes.

Keffer said that if the franchise tax cannot be made fair, it should be abolished. McCown explained the concept of "meaningful discretion" as it applies to property taxes and called for more government revenue. Fund told attendees that the existing Texas tax system has its advantages. He noted that in every state where voters had a real choice on a tax shift, they rejected it because the voters believed the tax increases would be permanent but the tax cuts would go away over time.

The orientation also had a panel on the ever-controversial issue of revenue and spending caps. Williams, Travis County Auditor Susan Spataro, and economist Barry Poulson with the University of Colorado and Americans for Prosperity, discussed state and local caps on spending.

Williams told participants there is more than adequate growth in the sales tax to fund state government. He also said the main cost driver in state government is Medicaid. He did not see raising taxes as the solution to Medicaid growth, however. "We cannot raise taxes fast enough" to cover the growth in Medicaid, Williams noted.

Spataro spoke for the Texas Association of Counties about the problems county governments face. She noted that more than 95 percent of county revenue comes from property taxes, whereas cities also have other revenue sources such as sales taxes. A cap on property tax revenue, she said, would burden counties more heavily than other units of government.

She also noted that one reason for revenue growth is state mandates.

"I don’t think there’s any county commissioner in Texas who likes raising taxes," she said.

Spataro told attendees that expenses relating to the justice system make up a large portion of county budgets. She added that the mandate for indigent criminal defense is straining county budgets. In Travis County, she said, indigent defense makes up 48 percent of the civil and criminal court budget.

Poulson said Texas’ tax limit on state government, one of the country’s first, is also one of the least effective because it applies only to non-dedicated state revenue.

He advocated limiting all levels of government to inflation and population growth with an automatic election if government wants to exceed that level. Poulson called taxpayer approval the ultimate form of taxpayer accountability and local control and gave examples where the voter approval requirement encouraged units of government to become more efficient and scale down projects.

School choice
Perhaps the most effective panel of the day occurred on the topic of vouchers or school choice. Philanthropist James Leininger’s speech was personal and from the heart. He talked about his own decision to support school choice.

Perhaps the most effective panel of the day occurred on the topic of vouchers or school choice. Philanthropist James Leininger’s speech was personal and from the heart. He talked about his own decision to support school choice.

Leininger described how he first got involved in education policy when he found employees at his manufacturing company who could not read. But trying to work with the system did not produce results. He then described several success stories from the private choice program. Every student, he said, graduated from high school, with the vast majority going on to college. But he also put a human touch on his story by describing the requests that he would get for emergency scholarships from students in physical danger because they would not join gangs.

Railroad Commissioner Michael Williams talked about his own experience with school choice. Williams’s parents, teachers in the Midland Independent School District, chose to send their son to a private Catholic school, he related. "My parents made a choice that many parents want to make," William said.

The state’s first African-American railroad commissioner gave three pieces of advice to school choice proponents: first, make the case throughout Texas; second, the key to winning the school choice argument is at the coffee table, not the Capitol; and finally, speak in bold terms, not pastels.

Former University of Texas Professor Jay Greene made the academic case for school choice, saying the best studies on the issue involve a randomly selected group of students in choice programs and the traditional system.

Green said all such random assignment studies have shown positive test score improvement for the recipients of a voucher and seven of the eight are statistically significant. He also said academic research shows that school choice improves scores even for those students who remain in traditional public schools.

Brock Gregg, representing the Association of Texas Professional Educators objected that school choice would require all taxpayers to fund religious schools, which could lead to state regulation of those schools. Gregg, saying "You get what you pay for," encouraged greater funding of public schools.

Pay for performance
In the upcoming special session, Sen. Florence Shapiro (R-Plano) said the Legislature will be looking at providing incentives to promote teacher excellence.

In the upcoming special session, Sen. Florence Shapiro (R-Plano) said the Legislature will be looking at providing incentives to promote teacher excellence.

"Teacher quality and student achievement are inextricably linked and connected," said Shapiro, a former teacher. She advocated differential pay and competitive salaries to attract higher quality teachers to teach in the public school system and said educator preparation and mentor programs are also important.

Richard Kouri of the Texas State Teachers Association said the state experimented with merit pay program for teachers. In 1984, the Legislature passed HB 72 with the objective to keep good teachers in the classroom. After nine years the program was discontinued because "it was incredibly divisive," Kouri said.

On Jan. 12, the Houston ISD Board of Trustees approved a plan for a local pay-for-performance program.

Superintendent Abe Saavedra promoted the plan, which would pay up to $3,000 a year more for teachers whose students show improve test scores.

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