Demographics is destiny. So is education, or the lack of it. Together they will determine our future—an obvious truth that hardly needs to be stated, except it is apparently not obvious to the state’s current political leadership. Rick Perry, David Dewhurst, and Tom Craddick have fashioned a system of financing education that does not even allow the public schools to keep up with inflation and imperils their ability to raise future revenue. This has occurred at a time when schools must grapple with the consequences of transformational demographic change. Texas is essentially in a race against time to educate at-risk students, and our leaders have added to that risk.
First, the demographics: Between 1950 and 1960, Texas’s population grew from 7.7 million to 9.5 million, an increase of 24 percent. This was the era of the baby boom, and almost all of that growth, 94 percent, was natural: more births than deaths. The remaining 6 percent was attributable to net migration: more people coming into the state than leaving it. Who, then, could have foreseen what lay ahead? In the intervening years, net migration has exploded. Between 1990 and 2005, Texas added more than 6 million people, and the growth was almost equally divided between natural increase and net migration. Domestic migration outstripped international migration in the nineties, but since 2000, the opposite has been true. This reversal underlies the sudden emergence of illegal immigration as a major political issue.
The implication of these numbers is clear: Inexorably, Texas is becoming a Hispanic state. Although natural increase remains a significant component of overall growth, much of it can be attributed to the Hispanic birth rate. In the nineties, the Hispanic population here grew by 53.68 percent, the Anglo population by just 7.61 percent. Anglos ceased to be a majority of the state’s population in 2005, although they still outnumber Hispanics by some 3.2 million. This will not last. Between 2000 and 2040, Texas’s Anglo population is projected to grow by a mere 4.2 percent, while the Hispanic population will grow by 77.6 percent. If net migration continues at the rate of the past fifteen years, Texas will become a majority Hispanic state by 2030.
These tectonic shifts in the state’s population are generally understood by most Texans, in large part due to the work of Steve Murdock, the former state demographer, whom President Bush tapped to head the U.S. Census Bureau earlier this year. So are the challenges they present. The median household income for Anglos at the turn of the century was $47,162, but it was only $29,873 for Hispanics. Because children from low-income families drop out of high school at twice the rate of children from middle-income families, closing the income gap is essential if Texas is going to avoid a grim future of an uneducated workforce and soaring crime rates. The high school completion rate for Hispanic students (59.6 percent in 2000) lags far behind that of African Americans (77 percent) and Anglos (82.4 percent).
Here is what an indifferent leadership and Legislature have wrought. Schools used to be funded through a basic per-pupil allotment enhanced by funding for special programs, such as gifted and talented, special education, bilingual education, and compensatory education. The Legislature typically increased the basic allotment when money was available. The formulas remain on the books, but they no longer matter. Now every school district gets its “target revenue,” which is equal to the amount it received per student in the 2005—2006 school year, when lawmakers revised the school finance system, cut property taxes, and reformed the state’s business tax. The target revenue has been augmented by a few special grants that are similar to earmarks: a high school allotment, a teacher pay raise, and so on. But the target revenue remains fixed at the ’05—’06 level.
In the meantime, the cost of fuel, utilities, and insurance has skyrocketed, but the state provides no new money to pay for it. The state has a new merit-pay plan for teachers, but districts that choose to apply for it must also provide matching funds. Meanwhile, needs are increasing, and the school-age population is harder to educate, mainly because of language difficulties. The new school finance law does allow school districts to raise their tax rates by up to 4 cents, which will provide additional revenue, but any further tax increases must be approved by a vote of the people. This is a potential straitjacket from which some districts—especially those in areas that attract retirees from other states—may not be able to escape at a time when aging baby boomers have no stake in the schools. The system appears to be designed to create failure. One hopeful sign to the contrary is that Craddick favors a tweak that would allow schools to receive more revenue.
Some school districts do benefit from rising property values; they take in more money at the same tax rate—that is, if they happen to be located in high-growth, affluent areas. Lawmakers frequently wring their hands at the rise in values, which shrinks the effect of the property tax cuts they’ve promised, and they threaten to reduce the cap on appraisal increases below the current maximum of 10 percent. I doubt this will ever happen, though, because the biggest beneficiaries of the rise in property values are the state treasury and, by extension, the members of the Legislature who get to spend the revenue. The more money that school districts raise locally, the less the Legislature has to chip in and the more lawmakers have to spend on their own pet projects. But if appraisal caps are unlikely to become law, the same cannot be said for revenue caps, which would limit increases in spending. Speaker Craddick has already indicated his intention to press for revenue caps next session.
The dismal story of negligence by our state leaders contrasts sharply with the reasoned, matter-of-fact perspective of U.S. Secretary of Education Margaret Spellings, the force behind the federal No Child Left Behind law.