Equity Center Radio

Equity Center Radio | December 18, 2009 | An Interview With Judge Scott McCown, “the Edgewood Judge”

You can email your questions about school finance and equity for answer on the air to ECRadio@EquityCenter.org.

The Internal Revenue Service informed the Texas Education Agency that it will update its regulation to allow bonds to be guaranteed up to 500 percent of the cost value of the Permanent School Fund as of today.

“This IRS ruling increases our capacity to back school district bonds by hundreds of millions of dollars. It will help school districts to build new buildings for generations to come. It will also help school districts keep tax rates down because this will save them money,” Commissioner of Education Robert Scott said.

The Permanent School Fund currently has a cost value of roughly $23 billion, which includes assets managed by State Board of Education and TEA, as well as the General Land Office. To date, the fund was able to back bonds up to 250 percent of the lower of its cost or value. Today’s action and legislation enacted by the Texas Legislature in 2007 will permit the State Board of Education to increase the capacity by up to 100 percent, contingent on the PSF maintaining a AAA rating.

“I am pleased with the decision by the IRS to increase our state’s bonding capacity for the Permanent School Fund,” said Sen. Florence Shapiro, chair of the Senate Education Committee. “This is something I have been working on for some time – starting with the passage of SB 389 in the 2007 session to increase the multiplier, and again this year with SB 1255. This change will now bring much needed facilities funding options to schools across the state.”

The agency was forced to close the Bond Guarantee Program on March 11 when turmoil in the stock market caused the value of the PSF to fall dramatically, reducing its capacity to back bonds. The program has been closed ever since.
With today’s ruling, the agency expects to re-open the program as soon as possible, which means TEA could be evaluating applications from school districts for bond guarantees as early as late January.

To permit the guarantee of school bonds by the Bond Guarantee Program, TEA must reopen the application process for Texas school districts.

When the PSF backs a school district bond it gives the bonds the equivalent of the highest rating available, AAA. The higher the bond rating, the better the interest rate a district receives when it sells its bonds. A lower interest rate can save districts millions of dollars.

Since its inception in 1983, the Bond Guarantee Program has backed more than $83 billion in bonds.

Equity Center Radio | An Interview With Joe Smith of TexasISD.com Hosted by Ray Freeman

Joe Smith

Equity Center Radio | Dr. Jerry Roy, Superintendent of Lewisville ISD, Talks About School Finance and Deficit Spending

Dr. Jerry Roy

Dr. Jerry Roy joined Lewisville ISD as Superintendent of Schools on June 1, 2001. Prior to coming to LISD, he served in Goose Creek CISD for a total of 28 years, as a teacher, coach, assistant junior high and high school principal, Director of Personnel, Executive Director of Personnel Services, Acting Superintendent and Superintendent from 1995-2001.

Dr. Roy received his bachelor’s and master’s degrees from Eastern New Mexico State University and his doctorate from Baylor University, where he was named a Selected Distinguished Alumnus in 1996. He has served on the Texas Commissioner of Education’s TASA Cabinet of Superintendents and has also served on the University Interscholastic League Legislative Council, as well as many other professional organizations.

Roy is a three-time nominee for Texas Superintendent of the Year and was named the Region XI Superintendent of the Year for 2006.

He discusses Lewisville Independent School District’s deficit which will be exceed 18 million dollars next year; and the causes of this red ink, the distresses upon the District, and the resulting need to lay off staff and reduce major spending.

The District is planning on having a Tax Ratification Election (“TRE”) next September. In Dr. Roy’s view, even with a successful TRE, the District will not do more than stay level, not improve its delivery of instruction. A sorry commentary on the current system of funding education in the State of Texas. Dr. Roy calls the effect upon his District “Draconian.”

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