Editorial: Illogic on DISD Reveals School Funding Hole

January 7, 2010

Texans in some parts of the state have long known that our school funding system is screwy. But Dallas school district taxpayers are becoming aware of that fact up close and personal.

As this newspaper recently reported, the Dallas Independent School District is now considered a "property wealthy" district. The designation means DISD gets to share some of its property tax revenues with "property poor" districts.

The way Texas’ share-the-wealth approach to school funding works is that the state determines how much property wealth each district is entitled to per student. If a district has enough property wealth to go beyond that, it must send some of its annual revenues to Austin for redistribution.

For years, the state has not wanted a big urban district like Dallas to be designated "wealthy." Once it earned that distinction, people w ould know for certain what a crazy school funding system we have. How does it make sense that a district with an overwhelming majority of its students from low-income families also has to share its "wealth" with the state?

Well, that’s where we are now, even though other property-wealthy districts with similar student demographics have been in this situation long before Dallas. And Dallas had to transfer only about $13 million to the state last year, while a district like Highland Park has given the state close to $1 billion over 15 years. But the fact that the state’s second-largest district had to share wealth exposes the flaws in a system that relies so heavily on property taxes.

The way to remedy the problem is for the state to pick up more of the tab for schools. These schools, after all, are the state’s constitutional responsibility.

To its credit, the Legislature has been trying to do that recently, and no one can expect this shift to happen overnight.

For one thing, moving away from the property tax would require leaders to ask each of us to pay for schools through expanding the business tax, broadening the sales taxes or even considering a limited income tax. Those changes aren’t going to happen in the current political and economic climate, so no long-term fixes are ahead.

But there are ways the state in the short-term can continue putting more money into schools, thereby lessening reliance on the property tax. One way is to consider closing tax loopholes that some businesses receive. We’re glad House Speaker Joe Straus has asked the House Ways and Means Committee to investigate that possibility before the 2011 session.

Dallas is not the first district to show that we have a flawed school finance system, but it takes the flaws to a new level. May this reality prompt Austin into action. &l t;br />