Lawmakers end year with questions over "Ghost of Budgets Past"


by MARK WIGGINS / KVUE News and photojournalist DAVID GARDNER

Bio | Email | Follow: @MarkW_KVUE

Posted on December 21, 2012 at 8:02 PM

Updated Friday, Dec 21 at 8:21 PM

AUSTIN -- It was a heated clash over a school finance budget passed more than a year ago.

A constitutional amendment passed in 2011 allowing the School Land Board (SLB), chaired by Texas Land Commissioner Jerry Patterson, to send money from state investments directly to the Available School Fund (ASF).

In August, the board voted instead to reinvest, leading some house members to accuse Patterson of shorting them $300 million they had counted on from the SLB for schools.

At a hearing before the Texas House Committee on Appropriations Thursday at the State Capitol, Patterson said there was never a promise.

"You made it discretionary, the voters approved it and it remains discretionary," Patterson testified. State Rep.

Sylvester Turner (D-Houston) countered, "It was not discretionary on this end."

"In my view there was no promise to transfer more than the $500 million we had already transferred. I don't doubt that that is your perception," Patterson told Turner during a separate exchange. "I have a fiduciary obligation to this fund and we are actually exceeding the payout that that fiduciary obligation would result."

"I respect that," Turner said. "And I have a fiduciary relationship to the 4.5 million school kids who took a $5.4 billion dollar cut."

"Now they have a $300 million hole that they've got to fill. So this makes the problem worse, not better," Progress Texas Executive Director Matt Glazer told KVUE Friday.

The liberal activist organization has hounded Patterson over the issue for months, accusing Patterson, a Republican, of adding to the school finance woes.

Patterson's office responded earlier this year dubbing the organization "slacktivists," resulting in a fierce exchange of statements and press releases from both camps.

"If we want to start planning for the future, if we want to start having a 21st Century economy, 21st Century jobs and infrastructure for the State of Texas, let's start putting money in health care, education, having the water we need and the resources we need," said Glazer. "And until conservative lawmakers get serious about that, then I don't trust that they have the best interests of Texas at heart."

"This is a constant battle," Patterson said Friday. "Has been for 75 years, between the legislature who wants more money now and another viewpoint that says we'll give you some, but we want to keep some to grow this permanent school fund so it will be here 50 years from now, and not just for us."

Patterson says SLB investments are earning an average of 12 percent return, significantly higher than both the Permanent School Fund (PSF) and the state's Economic Stabilization Fund (better known as the "rainy day fund"), and maintains that spending less money now could mean more later. He suggests drawing needed education dollars from the rainy day fund would be more fiscally prudent, but has become politically hazardous.

"It's easier for the legislature to tap the fund that nobody knows anything about than it is to tap the fund that everybody talks about on a very frequent basis," Patterson said.

At Thursday's hearing the commissioner vowed to put a vote for a $150 million disbursement to the ASF on the SLB's agenda next month, explaining it's the most the SLB could release and still cover 100 percent of investments subject to call.

"In the words of the movie Cool Hand Luke, 'What we have is a failure to communicate,'" Patterson said. "And I probably bear some blame for that, but I have a fiduciary duty to the permanent school fund."

"There's money out on the table that we've collected the revenue to fix these problems, and whether or not there's going to be a sense of urgency to actually do that is going to be up to the current leaders and the new freshmen and sophomores that have come in," said Glazer. "What we can't do is continue to plan for these failures."

It's perhaps the final act in the battle over school funding from the 82 Texas Legislature. The next round will begin when the 83rd Texas Legislature convenes January 8.

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