Texas School Coalition President Kyle Lynch provided testimony to the Texas Senate Education Committee on May 24, 2022 in regards to school finance and the implementation of HB 3 (86R) ad HB 1525 (87R).

Mister Chairman and members of the Committee.  My name is Kyle Lynch, and I am the Superintendent of Seminole ISD out in West Texas. I’m also the President of the Texas School Coalition.  

When HB 3 was passed in 2019, it guaranteed a minimum 3% gain for almost all school districts.  Since then, however, the rate of inflation has reached 9%.  Rising costs of living have eaten up the teacher salary increase and schools are struggling to keep up—especially when it comes to retaining quality teachers in this job market.  

Additionally, quite a few districts qualified for that 3% minimum gain through a Formula Transition Grant, which expires in fall 2024. That means between 125 and 150 traditional school districts and charter schools are currently headed for a fiscal cliff that could cause a reduction in funding.

Here is the reality facing districts:  Revenue coming in is stagnant, but our expenses are increasing. We have to pay more to fuel up our buses, keep quality teachers, and meet student needs.  Unlike cities and counties, schools do not  receive an automatic increase in revenue as property values climb.   

We support the property tax rate compression enacted by HB 3. But once a district hits the floor for how low their rate can go, then increased property values only result in increased recapture—not increased revenue for our students, regardless of how much more local property taxes are paid within our community.  

All the while, the burden of recapture is growing. (Reference Handout) Property tax relief temporarily helped to reduce the growth of recapture a little, but since that time, recapture has grown by 22%.  In the current year, statewide recapture payments will exceed $3 billion for the first time ever.

There is a solution that would address all of these issues: an increase to the Basic Allotment.  

If the Basic Allotment were increased to match the rate of inflation since 2019, it would be increased by $600 to $6,760 in the current school year.  And while an increase to the Basic Allotment will mitigate the fiscal cliff for Formula Transition Grant districts like mine, we would still face future funding decreases.

Every $100 increase to the Basic Allotment would mean roughly a $100 million annual reduction in recapture statewide.  

Public schools need a legislative solution that will ensure we can retain quality staff and meet the needs of the students we serve.  We look forward to working with you on those solutions and I thank you for your time

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