Academic and financial accountability are well-established features of the Texas public school system. Each year, the State of Texas rates every campus and school district on academic performance of its students, primarily on the basis of standardized test results, and it rates every district on its financial performance and health. If accountability is appropriate for local schools, surely it also is appropriate for the State itself. What grade should the 81st Texas Legislature receive for its work in public education during the 2009 legislative session?

A fair grade for the 81st Legislature is a B-, maybe a C+, with a couple of important qualifications that could require re-grading. However, the State has set the stage for an F in 2011, unless there are significant changes in public education funding at the State level.

First, a word about the authors’ grading system. The 74th Legislature in 1995 earned an A and set a benchmark for education policy by which other sessions are measured. The State, led by Governor George Bush, had a clear vision of its role in education policy and used that vision to consider specific bills. The four-part approach was simple but effective: (1) the State would set clear and measurable goals and expectations for schools; (2) the State would provide local schools and communities with maximum flexibility to achieve these goals, because the same approach does not work in all situations; (3) the State would provide districts with reasonable resources actually linked to the goals schools were expected to achieve; and (4) there would be measurement and accountability for how well schools did or did not achieve the State’s goals and expectations. The legislature completely revised the Texas Education Code and eliminated many pages of outdated laws and requirements, and restored substantial flexibility and responsibility at the local level.

At the other grading extreme, the 79th Legislature in 2005 earned an F for public education policymaking as the most divisive and unproductive session on record. In a third special session, literally days before a Texas Supreme Court decision would have started shutting down many schools, the legislature passed House Bill 1, which provided some temporary relief to local districts with funding, but did not resolve the fundamental weaknesses in the State system for funding public schools. The 79th Legislature locked in significant funding disparities between districts, in some cases a difference of $20,000 or more per classroom, even though the districts are required by State law to provide the same services and reach the same performance objectives. Perhaps as important, the pendulum began to swing back toward a more top-down approach to education policymaking; since 2005 the legislature has added back to the Texas Education Code more pages of requirements than were eliminated in 1995.

The 81st Legislature’s work in public education fell somewhere between the extremes of 1995 and 2005. In some areas, the legislature made positive movement in the right direction, such as its effort to reduce the over-reliance of the accountability system on standardized tests. Of course, most of the details relating to accountability were left for the Texas Education Agency to work out through rulemaking, so the ultimate effect on education policy remains unclear at this time. In other areas, the legislature missed an opportunity to make significant improvements, such as providing full-day prekindergarten to needy children and providing students with multiple pathways to high school graduation. It did not appear that the legislature had a clear vision of what things should be done well at the State level and what things should be handled best at the local level, so it tended to veer on an issue-by-issue basis from micromanagement on one extreme to over-generalization without clear expectations on the other extreme. Without a clear articulation of the State’s role and local communities’ role in education policymaking, the legislature cannot earn an A.

The one area of most concern about the State’s 2009 actions affecting public education policy is funding. The American Recovery and Reinvestment Act (ARRA), signed on February 17, 2009 and commonly known as the federal stimulus program, appropriated roughly $3.25 billion for Texas to spend to improve elementary/secondary and higher education. These funds could only be used for three purposes: (1) to restore shortfalls in elementary/secondary funding; (2) to restore shortfalls in higher education funding; and (3) to distribute the remainder to public schools based on their number of poor students. Unfortunately, the ARRA did not define “shortfall.” In essence, the 81st Legislature created a shortfall in elementary/secondary funding by reducing State funds for this purpose, using federal funds to fill the newly created “hole,” and using the State funds that were freed up by this budget maneuver for other purposes. State general revenue for elementary/secondary education was reduced from $35.7 billion for the 2008-2009 biennium to $31.9 billion for the 2010-2011 biennium, a reduction of $3.8 billion. Further, the reliance of the State’s funding system on local property taxes was increased by about $300 million over the biennium.

Since federal ARRA funds are anticipated to be one-time funds, unless re-appropriated by Congress, the State has created a potential budget hole of about $5 billion in funding for public education when the 82nd Legislature convenes in January 2011. This will be the amount necessary to replace the one-time federal funds and to cover growth in the number of students in Texas; it does not include the cost of any program improvements, teacher salary increases, or other cost increases.

Outside of public school funding and accountability, the 81st Legislature enacted a number of other measures, some of which are designed to provide some additional flexibility to school districts. Some measures of note include regulatory relief provisions contained in Senator Dan Patrick’s bill, Senate Bill 300. A few of the state’s many unfunded mandates—requirements triggering increased costs for school districts that lacked any accompanying state funding for compliance—were either modified or eliminated. Among these were mandatory school bus evacuation training, which was repealed, and the public posting requirements for job vacancies, which was modified to allow for online notices as an alternative to bulletin board and other more traditional publication methods. The frequency of the waiver application requirement seeking an exception to the state-mandated maximum class size (22-1) was reduced from once per semester to once per year. S.B. 300 also releases districts from the obligation to reduce electricity consumption by five percent per year, opting instead to encourage districts to develop a long-term energy plan focused on the reduction of both electricity consumption and associated costs.

On the other hand, the state did mandate a teacher salary increase. The Legislature mandated that school districts increase teacher pay by a minimum of $800 per school year or a higher amount determined by a legislatively-imposed formula. Although increased pay for Texas’ school teachers is certainly a worthwhile end, significant questions remain regarding the future impact of these mandated increases and their effect on school district budgets.

Despite these and other changes in the law, the issue that has and will continue to dominate education legislation in Texas remains how public schools are funded. How the next Legislature deals with the structural deficit created in 2009 will be the single biggest budget challenge in 2011. If the 82nd Legislature successfully handles the problem in a way that enables schools to continue raising expectations for and performance of all students, it will earn a high grade. If the 82nd Legislature is not able to handle this problem successfully, it is likely to earn a failing grade, and the grade for 2009 will have to be revised.

So, school is in session. Will the Texas Legislature pass in 2011?

David Thompson and Philip Fraissinet are partners in the firm of Thompson & Horton LLP. The firm represents schools, institutions of higher education, local governments, and private businesses with public law, public policy, and employment law interests.