On Tuesday, the House Select Committee on Economic Competitiveness released its formal report containing recommendations for ensuring Texas remains the nation’s most desirable destination for relocating or opening up new businesses.

Speaker Joe Straus (R-San Antonio) formed the committee in October 2017 in response to concerns that the 85^th Texas Legislature pursued a number of legislative proposals that resulted in Texas dropping precipitously in the rankings of America’s Top States for Business.

“Texas has long enjoyed a booming economy and staggering job growth. Our economic strength has been predicated on a number of factors: high oil prices, geography, the tax and regulatory environment within the state, and the can-do attitude of millions of Texans,” Straus explained when he announced the committee. “However, there are forces, if left unchecked, that could derail the success our state has enjoyed.”

The committee conducted several hearings and weighed testimony from 42 prominent and influential witnesses from the business, law enforcement and local communities. The committee documented several findings related to education. Most notably, the report underscored the important role public schools play in ensuring the educated workforce necessary to sustain businesses operating in today’s economy. The following passage is taken directly from the committee’s report:

Public education teaches students basic skills before entering the workforce and fosters innovation. Policymakers must deal with school finance, examining not just the amount of money allocated for education, but how we distribute it — and how we can better incentivize public educators and institutions. The governor’s recently proposed 2.5 percent cap on property tax revenue will be detrimental to school funding since school districts receive 40 to 60 percent of property taxes across the state. The Texas House passed a 6 percent cap during the 85th Legislature, but the measure was killed by the Senate; this new proposal will severely reduce school resources unless more funding is appropriated by the legislature.

House Bill 21 of the 85th Legislature would have increased the state’s share of school funding and reduced the need for higher property taxes — easing the burden on homeowners — but the legislation died after being altered by the Senate. After all, how can the challenges facing the future competitiveness of the state’s workforce be addressed if Texas turns its back on its public school system, or does not address its method for allocating resources to public schools?

The importance of local control for school districts was stressed with the explanation that local control granted from the state is important for hiring staff and providing a safe campus for students. Educators want their graduates to meet the specific needs of where their district is located, which makes local control imperative for creating curriculum and making decisions about how to meet those needs. Testimony also demonstrated the need for presenting high school students with information about technical programs, rather than only promoting four-year universities. Public schools must address the needs of students with disabilities, but programs to help them transition to the workplace and speech, occupational and physical therapies are consistently underfunded.

Based upon these observations, the committee included a number of proposals specifically related to public education. From the report:

Recommendation: The legislature must prioritize funding for public education that is regularly adjusted to account for growth in population and inflation. Policymakers should closely examine the effectiveness of public education expenditures to ensure that dollars are used to maximize student success, and ensure the state’s academic accountability system increases the performance of schools and students.

• In response to declines in state tax revenue, the 82nd Legislature reduced entitlement funding for public education by $5.4 billion. While subsequent legislatures have increased funding for public education, the majority of funds have been used only to cover costs created by the growth in the number of students.
• Adjusted for increases in population and inflation, state spending on public education has decreased by nearly 16 percent since 2008. At the same time, there has been an increase in the number of students who are classified as “economically disadvantaged” and are therefore more expensive to educate.
• As the majority of new funding provided by the legislature simply addresses population growth, there have been few opportunities to invest in programs that have proven to increase academic achievement — such as technical career education, science, technology, engineering and mathematics or STEM courses, dual-credit offerings, and bilingual education.
• As the state’s share of public education funding has declined, the burden on local property taxes and recapture payments has grown, eliminating any opportunity for local property tax rates to be reduced. About 54 percent of all property taxes paid in Texas are collected by school districts. Therefore, the fastest and most effective way to reduce the property-tax burden is for the state to pay more of the cost of public education.
• Many of the school finance formula weights and allotments — such as the Cost of Education Index or Transportation Allotment — have not been updated or adjusted for the effects of population and inflation in more than two decades. Increases in state funding should be tied to regular adjustment of these weights, combined with the elimination of funding elements that are inefficient or no longer represent the diverse needs of Texas’ public education system.
• The legislature must increase funding for special education programs and Early Childhood Intervention programs so that children with disabilities can successfully enter pre-kindergarten programs, while also providing more reliable funding for programs that help students with disabilities transition to the workplace.

Committee Chairman Byron Cook (R-Corsicana) submitted the report Tuesday. It will be presented to the 86^th Texas Legislature, which is scheduled to meet in January 2019. You can read the full report here, courtesy of the Texas Tribune.