Texas state legislators will face the daunting issues of water, school finance and taxes as they convene January 11 in Austin.

School finance, hotly debated for the past two years but with no resolution, offers the biggest challenge, say representatives David Swinford, a member of the select committee for school finance, and Rick Hardcastle, chairman of the House Agriculture Committee.

Both were on hand at the recent Texas Commodity Symposium, held in conjunction with the Amarillo Farm and Ranch Show, to update Texas High Plains farmers on likely legislative activity.

“With any other issue, we face an up or down vote,” Hardcastle says. “But with school finance, we face multiple challenges. We have to look at reforms, finance, tax reductions and income. And if any one area has problems that need addressed and we make a reform that affects all other areas. We'll always have school reform issues.”

The complexity of school finance reform, he says, demands a “lot of negotiations. For instance, we'll consider a sales tax and a business tax as possible means of increasing income. No one tax will work. We also know that not all schools need all the reforms. That's where we'll start and we'll negotiate from there.”

Swinford says several specific problems face legislators as they tackle an issue that has defied resolution during the last regular session and special sessions since.

Increasing property taxes will not be an option for increased funding. He also says schools have an adequacy problem. “We have to consider unequal systems,” he says. “For instance, schools of the same size but one with a 90 percent Anglo population and the other with a 40 percent Hispanic population (where English may be a second language) may have different needs. Each school must be funded adequately to allow students to pass testing requirements.”

He says funding based on school population also poses problems. “Some school districts can raise taxes by 1 cent and increase funding significantly. Others can raise taxes by $1 and raise little. Our constitution requires equal and adequate education.”

Swinford says school funding is similar to running a school bus. “If a bus transports five students instead of 50, the cost is the same. The same goes for a classroom. If the class includes 20 students or five, the cost for the teacher is the same. We need to figure the cost of education for one child.”

Swinford says rural residents have a right to have a school in their communities versus transporting children 50 miles.

“This will be a fight,” he says.

“But we all agree on one thing,” Hardcastle says. “We have a good school system and we have the opportunity to make it better. It needs changes; it needs (to be) tweaked, but the one thing we all agree on is that if we can't make it better, we should just quit and go home. Everyone has a different idea of how to make it better.”

And then come the water bills.

Hardcastle says legislators likely will file from 20 to 40 bills dealing with some aspect of water use.

He predicts historic use and the rule of capture will generate serious debate. “Agriculture uses more water than any other entity in the state, including municipalities, so we have the most to lose.”

Rural Texas also has less representation than metropolitan areas. Rural Texas controls 70 percent of the state's land but urban areas have 70 percent of the population. Hardcastle says only three members make a living from agricultural interests, although many have some ties to farm or ranch endeavors. And 37 of 120 members live in rural counties.

But even with what appears to be an imbalance rural Texas retains a strong voice, Hardcastle says.

“We have 73 members who represent some rural interests and agriculture accounts for 10 percent of the state's gross product. No other industry can make that claim, so agriculture is important.”

Rural communities may need a good chunk of that clout as the legislature wrestles with how issues such as inter-basin transfer will affect them. “Inter-basin transfer will stimulate a major discussion,” Hardcastle says. “Allow it or not?”

He says the issue has been placed into the hands of water conservation districts in much of the state. “But about as many people don't like water districts as are adamant about keeping them. Some water marketers see water districts as a way to help sell water.

“We have to figure out ways to protect rural water rights while meeting long-term plans for the state's water resources,” he says. “Growth of the state population requires that we manage water. Inter-basin transfer will be necessary to supply cities.”

He says rule of capture, a long-held principle of Texas water law, likely will be up for debate. “That's always going to come up,” he says. “The court has upheld rule of capture but it is still not part of the state constitution. If the legislature had made it constitutional 10 or 15 years ago, it probably would not be an issue, but they did not, so folks can go after it.”

Other ag issues also face legislators.

“We have budget concerns,” Hardcastle says. “Extension and research funding is important. We have to fund those. Also, the animal health commission must conduct BSE testing (along with other disease and health-related inspections) and that's a $2.5 million budget item. That doesn't sound like much, but small items add up.”

Tax incentives also may emerge. One way to fund budget shortfalls, Hardcastle says, is the do away with special incentives.

“The easiest way to pass school finance reform may be to just do away will all exemptions. But some of the biggest exemptions occur in agriculture and we have to keep those to keep land values up.”

Just about any one of the estimated 5,000 bills that will be offered in the legislature has potential to affect agriculture and rural Texas, Hardcastle says. “So watch what goes on in Austin.”

e-mail: rsmith@primediabusiness.com