Texas Senator Suggests Tapping PSF

DALLAS — The chairman of the Texas Senate Finance Committee on Tuesday proposed a constitutional amendment to take $2 billion from the $25 billion Permanent School Fund to help soften proposed reductions to state aid for public education.

Sen. Steve Ogden, R-Bryan, said Texans should have the opportunity to decide whether to use the money from the PSF, which currently provides triple-A enhancement for $49.3 billion of general obligation bonds issued by Texas school districts.

“In defense of this, once again, we’re asking the people of the state of Texas what they want to do with their money,” he said. “They might say no. But I don’t think it’s wrong to give them a choice.”

Sen. Kevin Eltife, R-Tyler, said the PSF should be protected because the enhancement it provides allows local districts to obtain low interest rates on the bonds they issue.

“This is bad public policy in my opinion,” he said during Tuesday’s committee deliberations.

Ogden’s proposal came after 9 of the 15 members of the elected State Board of Education, which oversees the PSF, offered the $2 billion as a one-time way of protecting education jobs.

“In the spirit of Rosie the Riveter, we are ready to roll up our sleeves and do our part to meet the current funding challenge and support those on the 'front line’ of our public schools,” the nine board members said in a letter. “We know our schools cannot provide the best education for our students without quality teachers and up-to-date instructional materials.”

The letter, signed by board vice chairman Bob Craig, R-Lubbock, was delivered April 15 to Gov. Rick Perry, Lieut. Gov. David Dewhurst, and House Speaker Joe Straus, R-San Antonio.

The $2 billion would save 40,000 teaching jobs, Craig said, and ensure full funding for state instructional materials allotments. 

“It is our hope that this will also help alleviate the need for school districts to raise local school district property taxes to meet this need,” he said.

However, a conservative bloc on the education board opposes the proposed amendment.

David Bradley, R-Beaumont, called the proposal “idiotic” and said the letter did not reflect an official position approved by the board.

“Mr. Craig is acting in a rogue capacity,” Bradley said.

Bradley said the $6 billion rainy-day fund should be tapped before touching the PSF.

Dewhurst said he appreciated the offer, but maintained that the school fund should not be touched.

“I want to protect the fund’s current endowment,” he said. “I want us to find ways to maintain or increase the current fund balance for our schoolchildren.”

The PSF receives royalties from state mineral leases, including onshore and offshore oil and gas production. Interest from the permanent fund goes into the Available School Fund, which is used to purchase textbooks and other basic school needs.

The Texas House has approved a two-year budget that reduces state aid to local education by $7.8 billion from current spending.

There is no comprehensive Senate budget yet, but the Senate Education Committee has proposed adding $6 billion for public education to the House plan.

The House has approved state spending of $164.5 billion over fiscal 2012 and 2013. The various Senate proposals total almost $180 billion.

The current biennial budget totals $187 billion.

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