The Fellow Behind the Tree

A business-dominated commission may help Texas out of its school funding mess.
by | January 2006

Texas lawmakers punted last year on the issue of overhauling the state's school finance system, failing to come anywhere near agreement throughout the regular legislative session and a pair of special sessions on the topic. They'll need to try again this year, with the state Supreme Court having imposed a firm deadline; if legislators don't pass a plan by June 1, schools won't open in the fall. To help them out, Governor Rick Perry has appointed a commission to address the question of how to organize the state tax system to pay for the court's demands.

At first glance, that may sound like a pointless exercise. At least 37 states have launched tax commissions or studies since 2000. Most have been charged by governors with coming up with some broad tax reform plan, but few have succeeded; mostly they come up with measures broad enough to ensure opposition from the most important interests in the state. Recall the late U.S. Senator Russell Long's comment: "Tax reform means 'don't tax you, don't tax me, tax that fellow behind the tree.'"

Does that mean the whole exercise is pointless? Not necessarily. "Even though they may not come up with any recommendations that will pass," says Robert Ebel, of the Urban Institute, "they help the governors and the legislators rule out some of the really silly stuff, and that's important."

The Texas commission probably won't come up with any school finance scheme that legislators haven't already considered and rejected. But it will provide an organized forum for an important constituency--the state's major corporations--to work toward consensus.

Perry drew some criticism for stacking the commission with campaign donors from the business sector. But that may have been a smart move. The state court is insisting that Texas shift its school funding away from property taxes, and in the end, an increase in business taxes may be the only feasible option. "I think the purpose of the commission is to try to get internal agreement and a stamp of business approval on a proposal," says Scott McCown, of the Center for Public Policy Priorities.

Texas was the only state that actually lowered its school funding levels during the past school year. Even under a revenue-neutral plan- -which is what Perry wants--the "fellow behind the tree" is going to have to pay more. The point of his commission is to give that fellow a vehicle for accepting it.