Voters OK more money for schools
Amendment raises cap agency can give from endowment
AUSTIN — Texas schools could receive hundreds of millions of dollars in new funding after voters on Tuesday approved a measure changing the way the state's public school endowment distributes money.
The constitutional amendment, which passed easily in Tuesday’s statewide election, is the latest in a string of reforms that lawmakers pushed for this spring amid revelations of mismanagement of the state’s $44 billion Permanent School Fund. Those include findings by the Houston Chronicle that the fund has paid out less to schools over the past decade, adjusted for inflation, even as its size has swelled and fees to outside managers have grown.
Under the measure, the land board will now be able to send up to $600 million per year directly to schools, doubling its current cap. Schools received $1.24 billion in 2018, or about 2.8 percent of the endowment.
Buck Wood, an Austin lawyer specializing in school finance, said the measure was needed but does nothing to address long-term flaws, especially with the land board’s governance.
“We've gotten ourselves into this situation, and I'm not sure how we're going to get ourselves out,” he said.
The move does not guarantee a windfall. In past years, the board has opted not to send money directly to schools, though it contributed to the School Board of Education, which also manages the fund. Land Commissioner George P. Bush committed to direct payments of $300 million in 2018 and 2019 amid conflict with education officials.
Billions of dollars that Bush and his predecessors have invested have gone to companies run by friends, business associates and campaign donors, according to the Chronicle’s investigation. An effort this spring to strip the land board of its investment power failed to get a hearing in the House. Other measures that passed call for more oversight and mandated collaboration between the land board and the board of education, which have historically been at odds.
In September, the land board sent nearly $4 billion held in cash to the board of education to invest, as ordered by the Legislature. The two boards have also begun negotiating a joint annual meeting, and the board of education has submitted candidates for two new land board members, a move
meant to prevent conflicts of interest.
“I think when you see it in the context of everything else that the Legislature did this last session, it's a net gain,” Tom Maynard, who chairs the board of education’s Permanent School Fund
committee, said of Tuesday’s amendment.
Lawmakers have said separately they want to consider additional funding increases when they reconvene in 2021, and directed the Texas Education Agency this spring to study how much the endowment should ideally be disbursing each year. Similar funds in other states often aim for 5 percent of a four-year market average,
which, in Texas, would have meant $720 million more to schools last year.
The education agency declined on Wednesday to comment on the study but is in the process of designing it and hiring an outside consultant. Bush’s office did not immediately respond to a request for comment.