Schools sued over the unequal funding formula, but the Texas Supreme Court upheld the policy.
“Our Byzantine school funding system is undeniably imperfect, with immense room for improvement. But it satisfies minimum constitutional requirements,” Justice Don Willett wrote.
State Rep. Dustin Burrows, R-Lubbock, says lawmakers need to stop abusing the districts, noting that the state penalty, which started as a 25 percent funding reduction, now tops 37 percent.
Four rural school systems in his district were penalized more than $32 million last year: $808,724 for Idalou ISD, $747,612 for New Deal ISD, $837,694 for Roosevelt ISD and $820,766 for Slaton ISD.
Burrows introduced HB 565 to equalize small- and large-district funding statewide.
Barry Haenisch, executive director of the Texas Association of Community Schools, said several districts are within a few square miles of meeting the 300-square-mile threshold. “A couple of square miles is costing them a half-million dollars every year,” Haenisch told Watchdog.org.
Julee Becker, superintendent of Slaton ISD, said the penalty is creating a teacher shortage there as instructors move on to bigger, wealthier districts.
The base salary for a Slaton teacher is $32,000 annually versus $43,000 in Lubbock, she told KAMC News.
The Texas penalty is predicated on the notion that smaller districts are less efficient. Among the 300 Texas districts that impose the highest allowable local property tax rate, the majority are smaller districts.
“When they launched this [penalty] in the 1970s, politicians wanted consolidation, so they tried to starve out the smaller districts,” said Ray Freeman, executive director of the Equity Center, a nonpartisan education research and advocacy group based in Austin.
Though school districts are creations of the state, Texas lawmakers have not taken direct steps to shut down the smaller ones.
“If you’re going to allow districts to exist, you need to fund them,” Freeman argues.
Smaller districts may lack economies of scale to provide a full range of specialized and high-tech classes, but their administrative cost ratios tend to be lower than larger K-12 systems, which are typically unionized.
Haenisch pointed out that one Panhandle school administrator serves as superintendent, principal, substitute teacher and even fill-in bus driver.
“Most small districts are running at maximum efficiency because their limited number of students requires them to make critical decisions on every dollar received. This is especially true with personnel,” he said.
Large urban districts ring up bigger overhead with multiple layers of non-instructional staff.
San Antonio Independent School District, for example, floated $450 million in additional debt last year and raised its taxes to the maximum rate – even as the urban system has multiple campuses on the state’s “inadequate” list.
In Port Aransas, meantime, that small beach town’s school district took a $703,000 hit from the state penalty.
“That’s 10 percent of our budget,” noted Superintendent Sharon McKinney, who bridled at the idea that consolidation is always more efficient.
Major public education issues that could affect Cy-Fair ISD are expected to be at the forefront of the conversation when the state Legislature convenes for the 85th legislative session Jan. 10.
In the last few months, a historic Texas Supreme Court decision critiqued the school finance system, test glitches this spring caused delays in the release of statewide standardized test scores and new talking points have emerged for school choice. State Sen. Paul Bettencourt, R-Houston, said these three issues are likely to consume this legislative session.
“There is no question that those three topics are recognizing the obvious—that Texas taxpayers are all interested in improving the state education system,” he said.
Meanwhile, CFISD officials are gearing up for major decisions in these areas and are sharpening their advocacy efforts.
“There needs to be a recommitment to universal public education,” Superintendent Mark Henry said. “It is the backbone of democracy, and the further we get away from believing all children should have the opportunity to succeed, the closer we get to having an unstable country.”
Cy-Fair ISD gears up for legislative session in 2017Finance reform
Teresa Hull, associate superintendent of governmental relations and communications, said school finance remains at the top of CFISD’s legislative priorities.
“We can’t do anything without being adequately funded and making sure we have support from the state,” she said.
In the 2016-17 school year, CFISD projects to receive $377.3 million of its $894.6 million total funding from the state. That is roughly $35.5 million less than the previous academic year and almost $50 million less than in the 2014-15 school year, despite the addition of students.
In May, the Texas Supreme Court responded to a lawsuit involving two-thirds of Texas school districts, including CFISD, which argued the state’s funding scheme did not fulfill the constitutional requirement of providing suitable support or maintenance of public schools. The Supreme Court said the existing funding scheme was constitutional, but also “Byzantine” and in need of reform.
Some lawmakers, including Lt. Gov. Dan Patrick, said the decision put an end to debate on school funding. However, public school officials still call for reform in this upcoming session.
Stuart Snow, associate superintendent of business and financial services for CFISD, said he would like to see two changes to funding in the next session.
“One is to develop a school finance system that is systematically transformed to one that is less complicated and one that is equitable,” he said. “And two, legislators [should be] funding schools at a level that exceeds the minimum standard and that includes changing technology and programs that are mandated by the Legislature.”
Snow said it would be challenging to pass the comprehensive change he believes is necessary just by working in the confines of the upcoming session.
“In order for [legislation] to be comprehensive and transformational in nature, I believe it needs to be a system that has been developed and studied over a long period of time,” he said.
Snow and several other school district finance officials have been meeting since November to create a suggested framework for a funding scheme. The group’s findings are still in progress and are not ready to be released, he said.
Cy-Fair ISD gears up for legislative session in 2017 Ray Freeman, the deputy executive director of the Equity Center, a statewide school finance and research advocacy organization, said inefficiencies imbedded in the funding scheme make it detrimental to public education.
“An efficient system means it is devoid of waste,” he said. “Until we get rid of things with no basis in cost, we won’t have an efficient system in public schools.”
These inefficiencies include the provision for target revenue, which dictates that districts will receive the same level of funding as they did more than 10 years ago, regardless of whether the district has changed in size or needs.
Freeman said this specific provision will reportedly cost Texas $350 million next year and is not based on any justified cost. He said any solution must start with removing noncost-based provisions.
Patrick charged the Senate Education Committee, of which Bettencourt is a member, to study performance-based funding, another proposed solution for improving the school-funding scheme. Bettencourt said state funds should reward districts for high performance.
“I think we are taking a look at how you incentivize people for good behavior and not reward people for poor performance,” he said. “There should be a big push for financial accountability.”
One methods for holding schools accountable, standardized testing, could also be revamped this session.
STAAR testing has experienced numerous challenges in the past year. In April, Texas Education Commissioner Mike Morath announced that technical difficulties caused more than 14,000 exam results to be lost. None of the affected tests came from CFISD.
As a result of the errors, the Texas Education Agency announced in August it would be fining the STAAR testing administrator, Educational Testing Service, more than $20 million. This breaks down into a fine of $5.7 million and a directive to invest $15 million more in online testing system enrollment, shipping, online testing, precoding, scoring and reporting. This past academic year was the first in ETS’ four-year contract to administer STAAR tests.
The mistakes have led to a discussion among legislators about what to do going forward. Some legislators are calling for STAAR’s abolishment entirely. State Rep. Jason Isaac, R-Dripping Springs, said schools should be given the choice of standardized tests used elsewhere in the United States and not be hampered by one with so many flaws.
The Texas Commission on Next Generation Assessments and Accountability focused on this topic in its meetings over school accountability this summer. It was tasked with finding solutions to these problems and present recommendations to Gov. Greg Abbott by Sept. 1. Some recommendations include using year-round computerized testing and aligning state standards with national ones.
Linda Macias, associate superintendent for curriculum, instruction and accountability, said it is important for CFISD to fix the problems brought about by STAAR testing.
“Certainly we are not opposed to testing as we have to be held accountable for our student’s learning, but it is how those tests are administered, how they are used,” Macias said.
The two priorities Macias identified are aligning testing subjects with federal requirements and allowing local control over nonfederal requirements, such as social studies and writing.
Cy-Fair ISD gears up for legislative session in 2017School rating systems
Another key element of accountability revolves around the new rating system for public schools that is set to go into effect in the 2017-18 school year.
Cy-Fair ISD gears up for legislative session in 2017In the 2015 legislative session, House Bill 2804 passed, introducing an evaluation process that would more specifically identify differences between schools and the quality of education they are providing. Although this system is set to go into effect next year, CFISD officials said they are hoping legislators will do away with it in the upcoming session and maintain the existing rating system.
As it stands now, the new system will designate an A-F grade for both individual campuses and districts, replacing a system that marked schools as “met standard” or “improvement required.”
District officials and trustees have both expressed concern over the proposed A-F grading system. CFISD trustee Bob Covey said the system would devalue communities, and grades could possibly correspond more to student wealth than performance.
“I think there is an interesting correlation between ‘A’s equaling affluence and ‘F’s equaling free and reduced lunch,” he said.
Covey said he would like to see legislators repeal the law entirely.
School choice funding State legislators will also consider legislation surrounding school choice—a concept based on the idea that students at failing public schools should have the ability to attend school elsewhere, typically at private or charter schools.
Debate focuses on the best way to fund school choice. Bettencourt said a number of options will be considered.
“There is everything from the $100 million in the pilot program on tax credit scholarships all the way up to full blown education savings accounts,” he said.
In 2015, Bettencourt introduced legislation to establish tax credit scholarships. These scholarships would be funded by donations from businesses and distributed by nonprofit organizations through grants. Businesses that participate would receive a tax credit for their donations. The bill passed the Senate but did not make it out of the House.
“It is a way to bring new money into the system,” Bettencourt said. “I think it would be very popular. If you can donate money to a nonprofit and get money back for it, who wouldn’t?”
States such as Nevada and Arizona offer education savings accounts. These accounts take the average amount Texas spends per student—roughly $8,500 in Texas—and puts it into an account that a student or parent can spend on educational costs, including private school tuition or homeschool curriculum.
Thomas Ratliff, vice chairman of the Texas State Board of Education, estimated it could cost Texas an extra $4.7 billion not already spent on education.
Public school officials said legislative efforts to expand school choice will take money away from public schools.
However, Stephen Novotny, executive director of Cypress Christian School, said he believes parents should have the right to use state funds to pay private school tuition should a public school not be the right choice for their students.
“We advocate for freedom of choice for Texas parents,” Novotny said. “If the state has designated a set amount of dollars to educate their child in a public school, the parent should have access to those dollars the school is no longer using.”
Bettencourt hailed school choice as families’ ways to find the best education.
“We want public education to do a good job, but we also need to recognize that we have charter schools, districts of innovation, homeschoolers, parochial and private schools,” he said.
Henry said regardless of any specific debates, the Legislature should focus on creating positive educational experiences for students at all levels.
“Everything that goes on in Austin will be about providing opportunities for all students, not just some students,” Henry said.
School finance equity begins by eliminating inefficiency
Our inefficient public school funding system results in significant lost funding to the majority of districts and an increased burden on their taxpayers. It may be a cliché, but it remains true: there are no free lunches — someone always pays.
Our basic system is geared to reflect differences in the cost of providing educations across the state. The statutory objective is that all districts willing to exert the same tax effort would be able to provide appropriate educational opportunities of similar quality for all children. This principle is the foundation of the Texas Supreme Court’s first school funding decision and was reiterated in the most recent decision: Districts must have substantially similar revenues per pupil at similar levels of tax effort.
Along the way, this principle was lost. “Band-aids” and “quick fixes” took the place of good policy decisions. Our system became increasingly complex and inefficient, unreasonably favoring some while detrimental to all others.
When a district receives funding that is not based on actual, state-recognized costs, every other district and its taxpayers are forced to foot the bill — either through higher taxes or lost opportunities for their children. In non-privileged districts across the state, taxpayers are taxed at higher rates and still receive less funding for their children. Texas loses when we fail to use the State’s resources in responsible, efficient and productive ways that benefit all Texans and their children.
Our system provides hundreds of millions of precious and limited taxpayer dollars every biennium that serve no cost-based purpose. For example, our system has a “temporary, transitional” hold-harmless provision that has been in effect since 1993 — starting its 24th year. It is now permanently in law and has a formula that makes it grow, even though it is not related to any known cost. Another funding source called the early agreement credit is based, incredibly, on whether a district signs a piece of paper before or after a certain date — again, not reflecting a known cost.
Target Revenue, another hold-harmless provision, guarantees districts the same funding levels they had more than a decade ago, regardless of current needs. This no longer applies to most districts, but for some, it provides big money. This biennium alone, Target Revenue will cost taxpayers nearly $600 million. Although this coming school year is set in statute to be its last, there is already a move to continue the funding into the future.
This is funding by habit, not by cost. Not by need. We used to do it, so we must continue to do it.
These and other inefficiencies result in many districts receiving tens of thousands of dollars more per typical classroom of 22 children not justified by a greater need, even when taxing at rates below the state average. In some cases, the advantage is over $100,00 per classroom. This waste is borne by taxpayers in other districts whose children do not benefit.
Before we can even begin to decide whether these districts need these additional funds to meet state standards, we must first make the hard decision to eliminate the inefficiencies that have become imbedded in the system today. After that, whatever funds are legitimately necessary must be provided in a responsible way — and they must be provided to all Texas children, not just some.
It’s time to step back and look at the system objectively. We cannot continue making funding decisions solely based on district runs; instead, we must address the cost-based needs associated with educating kids with different educational needs and the cost-based needs of varying districts. An efficient and productive funding system is one based on cost and devoid of waste. We cannot afford to have it any other way.
We are hopeful the conversation will start here in the coming legislative session. The result should be a system that makes sense to everyone and benefits each taxpayer and child across the state in a fair and equitable way.
The Big Conversation Members of the Senate Education Committee and a room full of interest groups agreed at a panel meeting Wednesday that Texas should drastically change how it allocates more than $40 billion to the state’s public schools. They disagreed on where to go from there.
Ray Freeman, deputy executive director of the Equity Center, representing property-poor school districts, offered: “You’ve basically gotta blow it up.”
As the Tribune’s Kiah Collierwrites, “the fault lines that will define efforts to improve the state's system of funding education came into sharp focus” at the meeting. Conservatives are looking “for a system of benchmarks that would tie state funds to how schools perform, not primarily how many students they enroll,” Collier writes, while representatives from poor and smaller schools “argue lawmakers should close the wide gaps between districts before using money to reward or punish districts.”
The panel is tasked with issuing a set of recommendations on the school finance system ahead of the next legislative session in 2017.
The fault lines that will define efforts to improve the state's system of funding education came into sharp focus Wednesday as a Senate panel began studying how to improve the "efficiency" of public schools in Texas.
The 11-member Senate Education Committee and a hearing room full of education professionals, lobbyists and school and minority advocates generally agreed that the Legislature should scrap the way it divvies up the more than $40 billion of state money now spent on public schools.
“You’ve basically gotta blow it up,” said Ray Freeman, deputy executive director of the Equity Center, which represents property-poor school districts.
There was little such agreement, however, on what to do instead.
Conservative lawmakers, expressing exasperation with suggestions that the state isn't spending enough on schools, have begun searching for a system of benchmarks that would tie state funds to how schools perform, not primarily how many students they enroll.
Educators and advocates from small schools and poor districts fear the stage is being set to sacrifice struggling schools on the altar of "efficiency" and argue lawmakers should close the wide gaps between districts before using money to reward or punish districts.
“Looking at the numbers, you know, 2015 was the most money that the state of Texas has ever spent in the history of the state on a per-student basis and we still have people coming and complaining we’re not spending enough, and it’s just so frustrating,” said state Sen. Van Taylor, a Plano Republican. “When’s enough enough?”
Lt. Gov. Dan Patrick instructed the panel to re-examine school finance before a Maystate Supreme Court decision that upheldthe school finance system as constitutional but urged lawmakers to overhaul a process it described as flawed and byzantine.
In what could be the only hearing on the issue, Wednesday's meeting gravitated toward the points of friction that have long bedeviled such explorations.
School officials, Latino groups and some Democrats on the panel questioned the GOP focus on efficiency, saying ranking schools by academic and financial performance is fraught with inaccuracy and inequity unless the state first closes vast funding gaps among districts or increases funding for schools.
“I believe it would be very difficult to fairly and accurately create and maintain a system in which all districts would be adequately measured, compared and grouped, and I believe previous attempts to create these comparison groups have been unreliable at best,” said Johnny Hill, assistant superintendent for business, financial and auxiliary services for Lake Travis schools who testified on behalf of the Fast Growth Schools Coalition and the Texas Association of School Business Officials.
But the panel’s Republican members said finding a way to tie funding to performance needs to be explored now.
“It’s all about productivity,” said state Sen. Larry Taylor, the Friendswood Republican who chairs the panel. “And I don’t think we’re looking at cutting any spending, but we’ve got to do as well as we can with the money we have.”
Officials from several companies, and one university researcher, testified about ranking systems they have developed to compare the money schools spend to student academic performance. They argued that public education overall would improve if lower-performing school districts were required to mimic the best practices of the most efficient school districts.
Some lawmakers and educators pushed back, saying it would be unfair to place the same expectations for academic and financial performance on smaller, poorer districts with needier students than larger, wealthier ones with less poverty.
State Sen. José Rodríguez, D-El Paso, said he wasn’t sure how lawmakers could feasibly require a tiny district like Fort Davis in West Texas to mimic the practices of a larger, better-funded district. It has had to cut its UIL program because of lack of funding, he said.
The education panel will publish official recommendations ahead of the 2017 legislative session.
Area educators and representatives from state agencies called upon lawmakers Thursday to retool Texas' public education funding system into one that is equitable for everyone.
"You can't cheat the children. ... You've got to fix the structure," said Wayne Pierce, executive director of the Equity Center, a statewide school finance research and advocacy organization in Austin.
State representatives and senators from East Texas, Houston, Dallas/Fort Worth and other areas met Thursday at Longview High School for the Texas School Funding Public Education Summit. The event was organized by Jay Dean, who recently was elected as the state representative for Gregg and Upshur counties, to give lawmakers an opportunity to learn more about the state's education funding system as they prepare for the legislative session that begins in January.
"Education funding is an issue that affects the entire state, but — as we heard today — funding varies by where you are," said Dean, who takes office in January.
On Thursday morning, Dan Casey of Moak, Casey and Associates presented an overview of the state's funding system. Schools are funded by local property taxes, state and federal revenues.
State and local funds are determined by the Foundation School Program, which is administered by the Texas Education Agency. The program provides school funding per student and has variables such as the Robin Hood formula, in which revenue from "property-wealthy" districts is redistributed to "property-poor" districts.
However, the state uses a complicated funding formula that places a higher value on some children than others when allocating funds to districts.
As Pierce said in an afternoon session, the funding formula has created a $3,264 difference in the value of a child between the highest- and lowest-paid schools in terms of state revenue per what is called "weighted average daily attendance."
Children in the top 5 percent of the state are valued at $9,021, while those in districts in the bottom 5 percent are valued at $5,757, based on the state's funding formula.
Pierce said that in finding the system to be constitutional earlier this year, the Texas Supreme Court determined that school districts have substantial equal access to "similar revenues" per pupil. However, Pierce said he didn't believe anyone else would say such funding disparities between school districts actually guaranteed access to "similar revenues per pupil" when the difference equates to tens of thousands of dollars a year.
"(The Texas Supreme Court) put 100 percent of the weight on our Legislature. The Texas Legislature has the toughest job. They have to fix this on their own with no support from the courts," he said.
Pierce advocated for a simpler funding formula that would equalize the wealth, noting that "you cannot say that one child is valued more than another."
Pierce said Texas has a good funding structure, but over time, the state has added to it to make it complicated. He advocated for eliminating hold-harmless clauses that "eat up available resources."
Catherine Clark with the Texas Association of School Boards also advocated for a simpler funding system that would replace the state's two-tiered funding formula with a single-tier system; however, TASB's proposal includes a hold-harmless clause to help ensure that districts do not lose revenue. TASB's single-tier formula allows for recapture above a designated amount.
Clark said she hoped lawmakers left Thursday's meeting with a sense of urgency that they might not have felt before.
"I hope they realize there really is a need to fix things," she said.
Dean said the state Legislature must tackle education funding either in its regular session in 2017 or in a special session, making it all the more important for lawmakers to get a basic understanding of the issue, as they did Thursday in Longview.
"This is a hot-button issue that we are going to be facing; at the same time, we have reduced revenues because of the oil and gas industry," he said.
Longview ISD Superintendent James Wilcox said he is not confident that education funding can be fixed in the 2017 session alone, but he said he was glad the school district could provide at least a starting point for lawmakers to learn about the system.
"I hope the experts we had here today gave them a better understanding so that when they get to Austin in January, they'll be better prepared when this topic comes up," Wilcox said.
TEXAS IS PUMPING MONEY INTO PRISONS FASTER THAN SCHOOLS
Texas' financial investment in jails and prisons has grown dramatically faster than its spending on education.
From 1979 to 2013, money spent on prisons in Texas grew by 850 percent, according to a study by the U.S. Department of Education. Back in '79 and 1980, the state spent nearly $15 million on education compared to just over $600,000 on correctional facilities. In 2012-13, education dollars hovered just below $42 million while spending on prisons grew to nearly $6 million.
U.S. Secretary of Education John B. King Jr. said the research shows how misguided this country's priorities are.
“For far too long, systems in this country have continued to perpetuate inequity. We must choose to make more investments in our children’s future," he said in a statement. "We need to invest more in prevention than in punishment, to invest more in schools, not prisons.”
Public school districts in Texas have sued the state multiple times for decades arguing that the way it funds schools is unconstitutional. In May, the Texas Supreme Court ruled that the state's system meets the state constitution's bare minimum requirements. That same month, the National Education Association released its annual ranking of how much states pay per pupil and Texas ranked 38th in spending just at under $9,000 per student, about $3,000 less than the national average.
Wayne Pierce, executive director of the Equity Center, a nonprofit that advocates for school districts in the state, told the Texas Tribune that public education is a preventive measure to stop poverty, which saves taxpayer dollars in the long run.
“Texas has chosen to fund public education at low levels for decades, and the result is that we’re increasing the amount of poverty and the high cost of incarcerating young adults,” Pierce told the Trib.
The U.S. Department of Education's study echoes that statement and its authors say statesshould increase investment in education to improve career outcomes for at-risk children and youth.
The findings also seem to conflict with "The Texas Model" of prison reform. Through a series of measures like increased use of drug treatment and pre-trial diversion programs, the state's inmate population decreased from 173,000 people in 2010 to 168,000 in 2013,The Washington Postreported. By 2016, the inmate population dropped to just over 143,000. The numbers do not include local and federal inmates; according the the Bureau of Justice Statistics, the total amount of inmates in lockups across Texas in 2014 was 699,300.
Marc Levin, director of the Center for Effective Justice at the conservative think tank Texas Public Policy Foundation, told the Tribune yesterday that lawmakers need to address tough sentencing guidelines and expand drug treatment courts to reduce the cost of incarceration.
Texas spending on prisons and jails is the highest in the nation, a new federal study concludes, and has grown about five times faster than the state's rate of spending growth on elementary and secondary education over the past three decades. But the state still spends significantly more on its schools than its prisons.
A new analysis of federal data released last week by the U.S. Department of Educationfound that Texas corrections spending increased by 850 percent between 1989 and 2013, while the rate of funding for pre-kindergarten to grade 12 education grew by 182 percent. In the 1979-80 fiscal year, for example, Texas spent $14 billion on education and almost $604 million on corrections. In 2013, it spent about $41 billion on schools and $5 billion on incarceration (in constant 2013 dollars).
On average, growth in spending on prisons and jails in other states tripled the rate of growth in funding for public K-12 education over the same period, the report found.
The wide disparity in Texas is caused by the state’s harsh sentencing laws and the strict enforcement of non-violent offenses, which have quadrupled its incarceration rate, the report asserted.
“Budgets reflect our values, and the trends revealed in this analysis are a reflection of our nation’s priorities that should be revisited,” said U.S. Secretary of Education John King Jr. in a statement. “For far too long, systems in this country have continued to perpetuate inequity. We need to invest more in prevention than in punishment, to invest more in schools, not prisons.”
Advocates for reforming both the nation's schools and criminal justice found ammunition for their arguments in the report. Education advocates said the data analysis shows that lawmakers’ should make efforts to cut the incarcerated population and divert funds to the Texas education agency so schools can be adequately funded.
“Texas has chosen to fund public education at low levels for decades, and the result is that we’re increasing the amount of poverty and the high cost of incarcerating young adults,” said Wayne Pierce, executive director of the Equity Center, a nonprofit group that advocates for more 700 school districts across Texas. “If we would concentrate more on public education as a preventive measure to stop the tide of poverty, we would be able to spend less and save more in the long run.”
Public school funding has long been an issue in Texas, and hundreds of school districts have filed numerous class action lawsuits against the state dating back to 1984. The latest casechallenging the constitutionality of Texas’ school funding system — brought by more than two-thirds of the state’s school districts — ended in May. The state Supreme Court ruled the system is constitutional but urged state lawmakers to implement "transformational, top-to-bottom reforms that amount to more than Band-Aid on top of Band-Aid." The lawsuit came in response to the $5.4 billion budget cuts lawmakers approved in 2011, which school districts say left them with unfairly distributed funding.
"[The court] criticized the system, but they didn’t put teeth in their decision," said Pierce, who represented more than 440 low- and medium-wealth school districts in the case. “It was a tremendous surprise and disappointment.”
Texas ranks 38th in per-pupil spending, according to 2016 numbers from the National Education Association. It spent an average of $8,998 per student this school year, more than $3,000 below the national average. As of the 2014-2015 school year, there were 5,215,282 students.
State Sen. Larry Taylor, R-Houston, who chairs the Senate’s Education Committee, could not be reached for comment.
While Texas has made strides curtailing its once explosive prison population growth, experts said it still hasn't addressed long-lasting structural problems.
The number of men and women held in state prisons and jails peaked at 173,649 in 2010,according to the Bureau of Justice Statistics at the U.S. Department of Justice. The state currently has about 150,000 inmates. It pays an average $20,000 each year per inmate.
State Sen. John Whitmire, D- Houston, who heads the Senate’s Criminal Justice Committee and is the longest-serving member of the Legislature, said his highest priority for the 2017 legislative session “is going to be pretrial release and services because most people in local jails cannot pay for bail.” He said some are even being forced to plead guilty because they cannot afford it.
“There're too many individuals in our county jails who don’t belong there because they are poor,” he said. “We’re just wasting millions upon millions of taxpayers' dollars.”
In Houston jails, for example, three-quarters of the people haven’t been tried in court. He said monitored pretrial release for non-violent offenders is an alternative.
Whitmire has also called for expanding prison education programs at the Windham School District, which he said would allow inmates to learn marketable skills, boosting their chances of finding employment after their release and reduce the recidivism rate. But Whitmire voted for steep budget cuts in 2011 that forced the statewide prison education system to eliminate more than 250 full-time positions and reduce its program. He told the Tribune that the school district was “wasting money" and that lawmakers were not seeing results at the time.
Marc Levin, the director of the Center for Effective Justice at the Texas Public Policy Foundation, a conservative think tank based in Austin, said a reducing the inmate population would allow the state to redirect funds to needed programs. He emphasized that tackling the sentencing guidelines and expanding drug treatment centers courts are crucial moves lawmakers should take.
“What it’s about is holding people accountable, but putting them behind bars doesn’t mean they’d far less likely to pay restitution, and it’s going to be a burden on taxpayers,” he said.
Disclosure: The Texas Public Policy Foundation has been a financial supporter of The Texas Tribune. A complete list of Tribune donors and sponsors can be viewed here.
Correction: An earlier version of this story credited a Texas state agency for a prison statistic that came from the U.S. Department of Justice.
Call for state budget cuts includes plenty of exemptions
AUSTIN – In what has become a biennial rite of summer, Texas' top three officials on Friday directed state agencies to plan on spending 4 percent less in the next two years, even though legislative leaders already are predicting the next budget will be at least that much larger than the current one.
The directive from Gov. Greg Abbott, Lt. Gov. Dan Patrick and House Speaker Joe Straus comes as the state is expected to start next year's budget process with $10 billion less to spend because of lagging oil and gas revenues.
Between that and the ongoing pressure from many Republican leaders to reduce taxes again, the tension between cutting and growing spending already has lawmakers and interest groups in Austin calculating their next moves, even as some of the state's biggest costs – including border security, child protective services, health care and mandatory school funding – are exempt from cuts under Friday's directive.
"It's a positive sign that state leaders recognize the need for more smart investments in (Child Protective Services), education and mental health. But if we want Texas kids to be healthy and on track to succeed, the state should not reduce funding for the health, early childhood development, and other effective interventions critical to children's success," said Stephanie Rubin, CEO of Texans Care for Children. "We hope the governor and legislators make investments in our children and families the priority next session."
"Limited government, pro-growth economic policies and sound financial planning are the key budget principles responsible for Texas' economic success," states the Friday letter from Abbott, Patrick and Straus. "It is imperative that every state agency engage in a thorough review of each program and budget strategy and determine the value of each dollar spent."
In 2015, the Legislature approved $209.1 billion in the current two-year state budget, 4.3 percent above the previous spending plan. And while that budget was heralded as conservative by Republican leaders and fiscal-conservative groups, the appropriations of state funds grew 7.1 percent, faster than population growth plus inflation – a metric frequently cited by conservative groups already arguing for smaller budget growth in 2017.
"Low tax, low spend states perform better than high-tax, high-spend states. To cut the tax burden on Texans from previous spending excesses, the Texas Legislature should build on the momentum of last session by passing a historic second consecutive conservative budget," said Talmadge Heflin, a former chairman of the budget-writing House Appropriations Committee who now is director of the Center for Fiscal Policy at the Texas Public Policy Foundation, a leading conservative policy group in Austin. "Doing so will provide the state with, at most, a spending increase of $9.4 billion to cover basic public necessities while prioritizing spending and cutting the tax burden on Texas taxpayers so that they can reach their full potential."
Tough session ahead
Eva De Luna Castro, a longtime budget analyst with the Center for Public Policy Priorities, a policy organization that takes a more liberal stance on social services and spending than Heflin's group, said the directed cuts have become a way for state officials to dampen expectations going into a budget-writing year. It also "helps make room for other priorities that they may put at the top of their budget proposals," she said.
"They're doing it more because they are worried that the next session is going to be tough," Castro said. "They're going into the next session with almost $10 billion less in room to work with, so maybe they're giving themselves a little more breathing space to deal with."
While initial reaction from agencies to the budget-cut directive ranged from eye-rolling to complaints that tighter and tighter spending is only exacerbating a downward slide in some key state services, state officials and GOP policy analysts insisted that those who are complaining are missing the point: Every state dollar that is spent should be justified every two years.
"Agencies should always help us identify opportunities for savings. We need to move away from the idea that every budget starts at current levels and simply grows from there. We will look across the budget to determine which programs are serving their intended purpose and producing results," said Senate Finance Committee Chairman Jane Nelson, R-Flower Mound, whose committee helps write the budget.
Under the Friday directive, the stated purpose of which is partly "to restrain the size of government," many programs may escape that review.
Exempt are such items as statutory funding for the Foundation School Program, border security initiatives, debt service, pension and benefit requirements for state employees and funding for Child Protective Services.
It also exempts funding needed to maintain current benefits and eligibility in Medicaid programs, the Children's Health Insurance Program, foster care, adoption subsidies and permanency care assistance – all will beadjusted to account for projected population growth.
Most legislative leaders predict school funding will be discussed, but, perhaps, only as a part of the continuing push to further cut property taxes. The Texas Supreme Court ruled earlier this year that the state's school finance scheme was flawed but constitutional, which may give lawmakers clearance to leave it alone.
Even if it is exempted from cuts, education funding should go under the microscope, said Wayne Pierce, executive director of the Equity Center, a Texas research group advocating for the elimination of inequities in education spending.
"We should look within the state's funding structure to see what things are in there that aren't necessary," Pierce said. "If you have an expenditure of public funds and you can't say this goes to effect that particular cost throughout the system, then you shouldn't be doing it."
Despite Texas Supreme Court ruling, the fight over public school finance continues
Wayne Pierce was the 37-year-old freshman superintendent of a tiny school district east of Temple when his mentors convinced him to join a lawsuit bucking the state.
He was green, scared and, frankly, clueless about what was happening at the state level as he juggled new and daunting responsibilities of running a school system with some 800 kids. Relying on people he trusted most, he decided Rosebud-Lott Independent School District would lock arms with other school districts and take Texas to court fighting for money he hoped would flow through his schools and into his classrooms.
He didn’t know he was joining a legal battle that would wind up at the state Supreme Court a few years later, and again and again years after that. School districts have dragged the state of Texas to court seven times since the mid-1980s, arguing in a seemingly endless loop for more money that goes something like this: lawsuit, Texas Supreme Court ruling, action by the Legislature, wait to see what happens, repeat.
More than 30 years later, Pierce still is fighting.
“The reason we’re still in court like this is because the Legislature never fixes the underlying causes of what leads people to go to court in the first place,” says Pierce, now executive director of the Equity Center, the largest school finance research and advocacy organization in the country. “(Legislators) don’t fix school funding because it’s something they think needs to be done. Otherwise, there wouldn’t be a trial. They, ‘fix schools’ or do what they do because the Supreme Court forces them to do something.”
Not this time.
The Texas Supreme Court on Friday declared the state’s school finance system meets “minimal constitutional requirements.” While hardly a resounding endorsement of the Texas education system, the high court expressed its reluctance to get involved in policies better set by the Legislature but stressed lawmakers should work on improving the system.
Ensuring the money used to educate 5.3 million public school children meets the needs of districts rich and poor is anything but settled as the more than 600 school districts and education gurus who sued lick their wounds and figure out how to turn the legal defeat into a possible win in the 2017 legislative session.
In spite of the high court’s ruling, Texas’ decades-long struggle with education funding shows no sign of abating. Hours after the court ruling, Republican and Democratic lawmakers sounded ready to take the justices up on their urging to fix it.
The myriad challenges facing public schools are well-documented: Growing numbers of low-income, non-English-speaking students who need more attention; the gulf between rich districts and their poor peers fighting for scraps to hire quality teachers and afford modern technology; growth of charter schools and a home-schooling movement that undercut traditional education funding; the struggle to rewrite the narrative - sometimes voiced by the very lawmakers who control the state’s purse strings - that public schools are failing while being expected to excel on state tests; pressure from Republican leaders to cut the property taxes that fund the local share of school districts’ costs.
None of those, experts say, compares to the political courage it takes to make people unhappy tearing up a patchwork system they say protects some districts more than others.
“Making hard choices is seldom the best political road to travel, given that someone will not be happy,” Pierce says. “Also, it has gotten complicated over time because, instead of making a real fix when it was simple, and of course, hard, it just gets more complex and less easy to know the right thing to do.”
The current state of education funding in Texas has left more teachers taking money out of their pockets to pay for materials and fewer tools or technology in the classroom, said Zeph Capo, president of the Houston Federation of Teachers union. The shortage of funds makes it harder to cut through the poverty, childhood trauma, special needs or lack of language skills that make some students a challenge to teach, experts say.
“People need to walk into our schools and, unfortunately, will see the need all over our kids’ faces,” said Capo.
Texas ranks low among states for education spending, coughing up $9,561 per student this year compared to the national average of $12,251, according to calculations from the National Education Association, which represents teacher unions across the country. On average, Texas spent two dollars more per student this school year than the previous one, a figure the Texas State Teachers Association calls “shameful” for a state ranked Texas 38th in the nation for education funding.
From education experts on the right, left and everywhere in-between, the reason Texas cannot get education funding right boils down to a lack of political courage to make significant change instead of patchwork repairs.
“Anything that you do that is destructive, you’re going to have people mad at you. Politicians don’t like to have people mad at them,” says Ken Grusendorf, a former Texas state representative and director of the Center for Education Freedom, a right-leaning think tank. Speaking from experience, he adds, “it’s a lot easier to try to try to make everybody happy.”
The conundrum of Texas’ education financing is enough to put most people to sleep. Few in the state fully understand the funding formulas that weigh students with special needs as deserving of additional education dollars, that assumes various funding levels for districts based on their urban to rural settings, and a multitude of additional factors complicating the final calculations. It is far more complex than writing a check to give each school the same amount of money per student.
The majority of dollars that finds its way into the classrooms, school buses and libraries of Texas’ schools largely comes from a mix of local property taxes and state revenues, and is the touchiest issue of all.
The state’s wealthiest areas benefit from robust property tax collections from housing or commercial property, injecting millions of dollars into their local school systems while poorer districts, often with a greater number of challenging students, struggle to make ends meet.
“So long as you use a Band-Aid approach to solving the problem, I think you’ll have continued litigation,” Grusendorf says. “They’ve been various size Band-Aids, but they’ve all been Band-Aids.”
Applying bandages to a layer of existing bandages has failed to fix the flawed system, experts say. One such repair, coined “Robin Hood,” requires the wealthiest districts to hand money back to the state to give to poorer school systems, a fix that shifts pressure off the state and onto financially healthy districts clamoring to keep locally-raised money in-house.
Take the Houston Independent School District, which could for the first time give the state an estimated $165 million because it is considered property wealthy despite the fact that three-quarters of its students are considered economically disadvantaged.
This year, it will cost $47 billion to fund Texas’ public schools, far more than it takes to finance entire state governments elsewhere in the country. Add nearly $5.8 billion in construction projects like football stadiums or additional classrooms and $3.2 billion in interest payments on bonded debt, Texans are footing the bill for $56.6 billion this school year in state and local property tax funding.
Meanwhile, the state’s student population is growing by more than 70,000 per year, according to the Texas Education Agency, akin to adding a new Fort Worth school district every year and demanding the state keep pace while lawsuits from school districts clamor for more money.
The governor and those in the Texas Legislature have the power to break the cycle, but the political realities look dim as financially conservative lawmakers strive to keep promises to keep taxes low and watchdog government spending, says Clay Robinson, spokesman for the Texas State Teachers Association and a longtime political observer who has watched the lawsuits over the years. The result is smaller patchwork solutions, he said.
“Even under Democrats, the Legislature has always needed a nudge. Under the Republican majority, they needed a shove,” he says.
In many cases, school districts are an impediment to solving funding problems because they do not trust the system or are afraid to lose the upper hand, says Scott Hochberg, a former southwest Houston state representative who left the Legislature a respected expert on education funding.
“No wealthy district wants to give up an advantage that it has,” he says. Legislators, school board members and other leaders often are unwilling to force wealthy districts of influential people willing to contribute to their political campaigns to give up ground, nor are they willing to commit sufficient state funds to bring the rest of Texas to the same playing field, says Hochberg who lectures on the topic.
“It’s similar to the question of why certain sports leagues have salary caps when others don’t,” he said. “The ones that don’t, the owners that can spend more want to continue to have that advantage.”
The Texas Supreme Court may have ruled the state’s education funding system is constitutionally sound, but 30 years later, the once novice superintendent Pierce struggles to see an end to the fight.
“I’m not green, I’m brittle,” he says. “I’m not scared anymore. It’s a battle that needs to be fought.”
The Texas Supreme Court on Friday issued a ruling upholding the state’s public school funding system as constitutional, while also urging state lawmakers to implement "transformational, top-to-bottom reforms that amount to more than Band-Aid on top of Band-Aid."
But without a court order directing the Legislature to fix specific provisions in the system, school groups worry that lawmakers will either do nothing or something outside the box.
“Our Byzantine school funding ‘system’ is undeniably imperfect, with immense room for improvement. But it satisfies minimum constitutional requirements,” Justice Don Willett wrote in the court’s 100-page opinion, which asserts that the court’s “lenient standard of review in this policy-laden area counsels modesty.”
There were no dissenting opinions; Justices Eva Guzman and Jeff Boyd delivered concurring ones.
"Good enough now ... does not mean that the system is good or that it will continue to be enough," Guzman wrote. "Shortfalls in both resources and performance persist in innumerable respects, and a perilously large number of students is in danger of falling further behind."
Friday’s ruling is the second time the state’s highest civil court has upheld the state’s school finance system. Since the 1980s, school districts have repeatedly sued the state in an attempt to increase public education funding, and have often prevailed. The latest case, brought by more than two-thirds of Texas school districts, is the seventh time such a case has reached the state Supreme Court.
“This is an historic ruling by the Texas Supreme Court, and a major victory for the people of Texas, who have faced an endless parade of lawsuits following any attempt to finance schools in the state,” Attorney General Ken Paxton said in a statement Friday. "We have said all along that school financing must be debated and shaped by the Texas Legislature, not through decades’ worth of ongoing litigation in the court system, and I’m pleased the court unanimously agrees."
Houston lawyer Mark Trachtenberg, who represented 88 property-wealthy school districts in the case, said the ruling "represents a dark day for Texas school children, especially given the Legislature’s repeated failure to adequately fund our schools.”
A recent study by the National Education Association found that Texas ranks 38th in the country in per-pupil public-education spending.
Wayne Pierce, executive director of the Equity Center, which represented more than 440 low- and medium-wealth school districts in the case, said the high court has “pretty well given a blank check to the Legislature and the only question now is if Legislature steps up and does the right thing or if they take this as an opportunity to further hurt the system.”
“I think they’re going to have to do something, but will it be enough? I doubt it,” said Pierce, asked about whether he thinks lawmakers will increase funding.
“Will this [court decision] be used to not fix public education but go out on some tangential rabbit trail? I think that’s probably more likely,” he said. “If this decision has a silver lining, it’s around a huge, black cloud.”
But some Democratic and Republican state lawmakers on Friday called for action on the issue.
"While I applaud and agree with the Texas Supreme Court’s ruling, make no mistake: This is not the end of this journey, but the beginning,” said state Rep. Jeff Leach, R-Plano. "The duly elected Texas Legislature – not the courts – has the immense responsibility to work to reform, improve and strengthen education in Texas."
"For far too long, the state has been neglecting its responsibilities, failing to pick up its fair share of the school finance tab, and pushing the costs down to overburdened local taxpayers,” said state Rep. Donna Howard, D-Austin.
More than 600 Texas school districts sued the state after the Legislature cut $5.4 billion from the public education budget in 2011.
Their lawyers argued the state's method of funding public schools was unconstitutional on a variety of grounds — that the Legislature had failed to provide districts with sufficient funding to ensure students meet the state's increasingly difficult academic standards; that big disparities had emerged between property-wealthy and property-poor school districts; and that many school districts were having to tax at the maximum rate just to provide a basic education, meaning they lacked "meaningful discretion" to set rates. That amounts to a violation of a constitutional ban on a statewide property tax.
In a 2014 ruling, Travis County District Court Judge John Dietz — a Democrat — upheld all of those claims, siding with the plaintiff school districts.
He also ruled against two other parties in the lawsuit that did not represent traditional school districts, directing them to seek relief from the state Legislature.
After a trial that lasted more than three months, Travis County District Court Judge John Dietz ruled in February 2014 that the state's school finance system is unconstitutional.
In early 2012, a group representing parents, school choice advocates and the business community — Texans for Real Efficiency and Equity in Education — filed a suit alleging that the current school finance system is inefficient and over-regulated. The Texas Charter Schools Association also sued the state, arguing that a cap on charter school contracts and charters' lack of access to facilities funding was unconstitutional.
In Friday's ruling, the state Supreme Court upheld Dietz’s ruling relating to the fairness coalition and charter schools association but struck down the rest, meaning that all plaintiffs essentially lost out on any injunctive relief.
But Robert Henneke, general counsel for the Texas Public Policy Foundation, a conservative think tank that backed the so-called efficiency intervenors, painted an optimistic picture of the ruling.
“The court thoroughly rejected the notion that the amount of funding into the system is what is constitutionally required,” he said. “While the court defers to the Legislature to make policy, I think the court’s opinion made clear that there is need for reform and, globally, much broader than mere funding and finance.”
During oral arguments Sept. 1, state lawyers asked the court to dismiss or remand the case to a lower court so it may consider changes lawmakers recently have enacted to the state's school finance system. Last year, the Legislature increased public education funding by $1.5 billion — snubbing a $3 billion House proposal — and authorized another $118 million for a high-quality pre-kindergarten grant program that Gov. Greg Abbott championed.
Before issuing his ruling, Dietz reopened evidence for a four-week period so that he could consider changes made by the 2013 Legislature, which restored about $3.4 billion of the $5.4 billion in public education cuts made in 2011 and changed graduation and testing requirements.
Abbott, who was serving as attorney general at the time,appealed Dietz's ruling directly to the all-Republican state Supreme Court.
On Friday, Abbott called the ruling "a victory for Texas taxpayers and the Texas Constitution." He added that the decision "ends years of wasteful litigation by correctly recognizing that courts do not have the authority to micromanage the State's school finance system."
Meanwhile, the Center for Public Policy Priorities, a left-leaning think tank, called on the Legislature to “make meaningful investments in our schools so that all Texans have the chance to live up to their full potential.”
Andteacher groups bemoaned the decision.
“It is a sad day when the state’s highest court decides that doing the least the state can do to educate our children is enough,” said Texas State Teachers Association President Noel Candelaria.
Sheryl Pace, a school finance expert at the business-backed Texas Taxpayers and Research Association, said the court decision surprised her given the sheer number of school districts suing. She stressed that the decision does not preclude state lawmakers from making changes to the school finance system, which the court described as deeply flawed.
“I do think this frees up the Legislature so that they can address school finance if they want to,” she said. “There won’t be an injunctive deadline being held over their heads.”
Whether state lawmakers will actually do so is another question, though, she said. Last year, an effort to overhaul the school finance system failed, with opponents arguing the Legislature should wait for the state Supreme Court ruling.
Student enrollment at Humble ISD is projected to increase by more than 10,000 students in the next six to 10 years, prompting district officials to make plans for building new campuses.
Six new campuses are needed in HISD by 2022—three elementary schools, two middle schools and one high school—primarily in the southeast quadrant of the district near Atascocita, HISD Superintendent Guy Sconzo said.
“My first year here was in 2001, and there has not been a year since that we haven’t grown,” Sconzo said. “Accelerated would be an understatement. It was like an explosion occurred, and it lasted through the [Great Recession]. For the past couple of years our growth has been around 1,200 to 1,300 students per year, and it’s starting to pick up again.”
‘The last frontier’
HISD’s population is expected to rise from 40,500 to about 52,000 students by 2025, according to a study by demographic firm Population & Survey Analysts. Residents are moving to the area to take advantage of access to the George Bush Intercontinental Airport, undeveloped land and jobs in downtown Houston or the Port of Houston, Sconzo said.
“I’ve heard [Northeast Houston] referred to as the last frontier in Houston,” he said. “It’s a very attractive quadrant of the city.”
However, the projected influx of new students does require district officials to stay on their toes. HISD board President Robert Sitton said there are already temporary buildings and overcrowding problems at several campuses in the district.
“If we don’t build another high school, specifically in the Atascocita area, then Atascocita High School and Summer Creek High School will have 4,500 students [each] when they’re built for 3,200 students,” he said.
Much of the future growth is expected to take place along West Lake Houston Parkway between Beltway 8 and Will Clayton Parkway, where several of the campuses will be built, Sconzo said.
High School No. 7, projected to open in 2022, will be built on the border of the Lakeshore community off West Lake Houston Parkway. Two other campuses—Elementary No. 28 and Middle School No. 9—will be built nearby in The Groves, a master-planned community near West Lake Houston and Madera Run parkways. The schools will open in 2017 and 2018, respectively.
“We’ve heard from the market researchers who are saying the east side of town is the new west side,” said Nicole Zimmerman, project manager for Crescent Communities, the development company that built The Groves. “I don’t know if I’d go that far, but with changing market dynamics and the price of oil going down, the northeast side [of Houston] is poised for a lot of growth.”
Financing new schools
Before the district’s board of trustees calls for another bond election, it has $155 million in authorized bond funds from an election in 2008 to purchase property for the six new campuses, build three schools and have money remaining toward the construction of a fourth school, Sconzo said.
Beginning in August 2017, one new school is slated to open each fall for six years, pending a future bond election that needs to be called by the board. Legally, a district cannot start that process until there is money in the bank, Sconzo said.
“We have to have a successful bond referendum in 2018 in order to open the doors on Elementary 30 in 2021 and High School 7 in 2022,” he said. “I say that definitively, but the board will make the ultimate decision, and the community.”
The future bond referendum is also expected to address aging facilities.
“This year we hired PBK Architects to do a full facility study from the rooftops to the flowerbeds of every facility in our district,” Sitton said. “We’ve asked them to give us a playbook for the future to see if we need to do any renovations on schools, wing additions or possible rebuilds because we know we have some aging facilities. That’s going to be a huge part of the next bond election.”
After new schools are constructed, the additional operating costs put more strain on the district’s annual budget. Start-up operating costs for new campuses areroughly $1.7 million for a new elementary school, $3 million for a new middle school and $7 million for a new high school, Sconzo said.
“The operating cost of new facilities, on top of the ever-escalating cost of building facilities, really causes financial challenges for school districts primarily because of the way the funding system is established in this state,” he said.
More than 600 school districts in Texas, including HISD, joined a school finance lawsuit in 2012 in hopes the system would be overturned and ruled inequitable and inadequate.
“[Sheldon ISD is] funded at a level approximately $1,500 more per student per year,” Sconzo said. “Tell me what’s the difference between educating a child in Sheldon and Humble?’”
If the state Supreme Court rules in favor of the districts, the state legislature will be charged with fixing the school finance system, said Wayne Pierce, executive director of the research and advocacy nonprofit Texas Equity Center. A decision is imminent.
“There are several things [in the finance system] that aren’t cost-based and deliver money at whim and mostly favors wealthier districts,” Pierce said. “In Harris County, there are two districts at the maximum tax rate of $1.17: Humble ISD and Sheldon ISD. If Humble ISD were funded at the same level Sheldon is, they would have $18 million [more].”
Regardless of financial challenges, district officials plan to diligently execute future campus openings, Sconzo said, with campuses needing to be at 140 percent capacity before another opens.
“If you open a new campus earlier than that, you open the new campus with such a small student population, it really is inefficient,” he said. “As you respond to growth, what’s really important is who are the teachers working with the children.”
School districts across the state, including Conroe ISD, have begun planning for a legislative mandate that could cost millions of dollars.
The mandate, which goes into effect for the 2016-17 school year, requires districts to install cameras in special education classrooms if a parent requests them. It is just one of many unfunded mandates over the last few legislative sessions that are putting a strain on local school districts.
The state Legislature has been requiring districts to pay for unfunded mandates for decades, said Amy Beneski, director of governmental relations for the Texas Association of School Administrators.
“We get asked a lot, ‘Well, y’all got additional funding from the Legislature—why is that not enough?’” Beneski said. “It’s [not enough] because we have to implement a lot of things they do that they don’t provide funding for.”
Perhaps the most substantial unfunded mandate passed by the Legislature this summer was Senate Bill 507. The bill, authored by state Sen. Eddie Lucio, D-Brownsville, requires school districts to provide cameras in special education classrooms for any parent of a special needs child who requests them. Districts must also store and record audio and video for up to six months.
Conroe ISD, which has 60 campuses, believes the mandate could cost the district more than $1 million simply because of requirements for storage and keeping the information secure, said Chris Hines, deputy superintendent of operations for CISD.
“I understand the intent, but it has a lot of ramifications and complications in terms of the cost and technology to make it work,” he said. “I don’t think any organization is exempt from that—you make a decision for a good reason and find out later on there is a cost for implementation.”
State Rep. Patricia Harless, R-Spring, said the Legislature has tried to be more cognizant of the costs to districts in recent years.
Harless said she has voted against bills that required unfunded mandates of districts and even carried bills to alleviate unfunded mandates, such as legislation to increase the gas mileage reimbursement for school buses and reimburse election costs when districts were required to have a uniform election date.
“I hope we continue to go down the path that we don’t pass those along to school districts,” Harless said. “I do think it is shortsighted of us when we do [that] when we don’t understand the cost.”
The state’s instructional materials allotment, which went into effect in 2011 after it was approved by the Legislature, also has effects on CISD. Several years ago, the state moved to a system in which each district received money per pupil for textbooks versus purchasing books and shipping them to districts based on what they ordered.
“When I think of unfunded mandates, [the IMA] is not so much an unfunded mandate, but something that’s not adequately funded,” Hines said. “The reality is, even though we receive quite a bit of money, it doesn’t go far enough. Previously, I might have purchased a $75 math book and the state sent it to me and it lasted eight years,” he said. “Now to get that book I pay $15 a year.”
Hines said CISD designs its budgets based on what the district anticipates its real costs to be every year.
“When we know something comes into place we plan ahead, but sometimes it is hard to put a number to it,” he said. “That’s where you’re at a disadvantage because you don’t know the real cost until you do it.”
Although unfunded mandates from the Legislature cost districts millions of dollars every year, they might be dealing with a more significant issue in terms of the overall state funding formula.
“Unfunded mandates are a small part of a much larger problem,” said Wayne Pierce, executive director for Austin-based education nonprofit Texas Equity Center. “It’s a very significant part, but the problem is much broader than just unfunded mandates.”
Rather than funding each mandate, Pierce said Texas needs to do a complete overhaul of education funding to make it more equitable and adequate for school districts across the state.
“It would be a huge mistake—when the state does some mandate—for [the state to] calculate it out for districts and send everybody that amount because [the funding would be] outside the system,” he said. “It needs to be systematic. It needs to go through the system.”
Unfunded state mandates costing Spring, Klein ISDs
While hundreds of school districts across the state await the results of a state Supreme Court case that could change Texas education financing forever, Spring and Klein ISDs have begun planning for a legislative mandate that could cost the districts millions of dollars this school year.
The mandate, which requires districts to install cameras in special education classrooms, is just one of many over the last few legislative sessions that are putting a strain on local school districts.
The state Legislature has been requiring districts to pay for unfunded mandates for decades, said Amy Beneski,director of governmental relations for the Texas Association of School Administrators.
“We get asked a lot, ‘Well, y’all got additional funding from the Legislature—why is that not enough?’” Beneski said. “It’s [not enough] because we have to implement a lot of things they do that they don’t provide funding for.”
Strain on the schools
Prior to beginning of the 84th legislative session this year, KISD was already budgeting for about $11.6 million in costs related to unfunded legislative mandates. The costs range from $2.6 million for dyslexia support staff and materials to $800,000 for energy-efficient light bulbs.
Although only about 2 percent of the district’s overall budget, the $11.6 million is equivalent to the salaries of about 200 teachers, said Thomas Petrek, associate superintendent of finances for KISD. Petrek said the district explains the strain of the mandates to legislators every session.
“In our position statement, we say that, ‘If you’re going to require us to do something and we don’t have the money for it, well then you need to provide the revenue stream to pay for these mandates,’” Petrek said.
SISD Chief Financial Officer Ann Westbrooks said the mandates can be difficult to fund, especially during a recession. A mandate from the Legislature that requires the district to keep elementary schools at a 22-1 student-to-teacher ratio was a challenge for the district in 2011-12 after the state cut more than $5 billion in education funding.
The district filed waivers in the 2011-12 school year to keep elementary school classes at a 23-1 ratio, which saved the district $2.4 million that year.
Westbrook said the district will have to find $2.5 million in its budget this year to fund another recent mandate. Legislation passed in 2013 required districts to contribute an added 1.5 percent to the salaries of employees for whom the district does not provide Social Security benefits.
“That [is] $2.5 million that comes right off the top of our budget, which means that cannot go toward things, such as updating our technology, infrastructure or making maintenance and renovation improvements,” Westbrooks said.
Beneski said the unfunded costs to the district do not always come from mandates. In some cases, the state fails to keep up with its funding formulas—such as the transportation allotment, which has not increased since 1984.
State Rep. Patricia Harless, R-Spring, said the Legislature has tried to be more cognizant of the costs to districts in recent years.
Harless said she has voted against bills that required unfunded mandates of districts and even carried bills to alleviate unfunded mandates, such as legislation to increase the gas mileage reimbursement for school buses and reimburse election costs when districts were required to have a uniform election date.
“I hope we continue to go down the path that we don’t pass those along to school districts,” Harless said. “I do think it shortsighted of us when we do [that] when we don’t understand the cost.”
Perhaps the most substantial unfunded mandate passed by the Legislature this summer was Senate Bill 507. The bill, authored by state Sen. Eddie Lucio, D-Brownsville, requires school districts to provide cameras in special education classrooms for any parent of a special needs child who requests them.
“I will tell you from friends I know[who] have kids in some ofthese special needs classes: They are beat up on a daily basis,” said Harless, who voted for the bill. “[The] cameras would be beneficial in that classroom for the teacher, for the student and for the school for protection.”
Although SISD and KISD officials said the bill’s requirements will not kick in until the 2016-17 school year, the costs could be significant. KISD officials said if every special needs classroom in the district added cameras, it could cost the district more than $1.6 million a year.
Beneski said school districts understood the need for the bill to help protect students and teachers, but they also requested money to pay for the requirement.
The bigger issue?
While unfunded mandates from the Legislature cost Spring and Klein ISDs millions of dollars every year, the districts might be dealing with a more significant issue in terms of the overall state funding formula.
“Unfunded mandates are a small part of a much larger problem,” said Wayne Pierce, executive director for Austin-based education nonprofit Texas Equity Center. “It’s a very significant part, but the problem is much broader than just unfunded mandates.”
Pierce said both Spring and Klein ISDs are underfunded compared to the top half of the state’s school districts. Rather than funding each mandate, Pierce said Texas needs to do a complete overhaul of education funding to make it more equitable and adequate for school districts across the state.
“It would be a huge mistake for—when the state does some mandate—[the state to] calculate it out for districts and send everybody that amount because [the funding would be] outside the system,” he said. “It needs to be systematic. It needs to go through the system.”
SISD and KISD are two of 600-plus school districts involved in the ongoing state education financing lawsuit against the state at the Texas Supreme Court.
KISD Superintendent Jim Cain said the districts believe the state’s education financing system does not provide equitable or adequate funding to every school district. Cain said placing unfunded mandates on top of the state’s funding shortage places a strain on the districts.
“If that continues year after year, that places a tremendous burden on the local school district,” he said. “I respect that you have people in Austin who are trying to make it all work, but maybe the best thing to do—instead of continuing to put Band-Aids on the system—is to really take a look at starting from scratch and building the system to reflect 21st century circumstances.”
STATE EDUCATION FINANCE LAWSUIT UNDER REVIEW BY TEXAS SUPREME COURT
More than four years after the Texas Legislature cut state education funding by $5.4 billion during the 82nd legislative session, hundreds of school districts fighting the state’s education funding formula began to have their cases heard by the state Supreme Court on Sept. 1.
The lawsuit features six different plaintiff groups with more than 600 school districts represented across the state. Cy-Fair ISD is among more than 80 districts represented by attorney David Thompson.
Wayne Pierce, executive director for Austin-based education nonprofit Texas Equity Center, said the Legislature added $1.2 billion to the base allotment for education funding for the next biennium in the 2015 legislative session. However, education has yet to reach funding levels prior to the 2011 cuts.
Despite the drop in state funding, Pierce said overall revenue for Texas school districts has risen 1.5 percent per year as a result of rising property taxes since the cuts in 2011.
“The state has not come back to the [funding] levels it was at back in 2010-11, and when you add inflation and the enhanced economy we have, they’re really getting by on the cheap compared to even what it was [then],” Pierce said.
State Rep. Patricia Harless, R-Spring, said the state was facing a roughly $27 billion deficit during the 82nd legislative session. The education cuts were among many tough choices the Legislature made in addressing the deficit.
“You never want to cut education, but it was a time where we had to cut everything,” Harless said. “I think we’ve worked hard to make up the cuts that we’ve done in the past.”
Depending on the court’s ruling, Pierce said Gov. Greg Abbott could call a special session next year to address the issue, which would likely come some time after the March primaries in mid-May or June.
Harless said she does not know how the equity problem between school districts could be fixed as high-growth school districts like CFISD get $5,600 per student from the state while small districts can receive between $12,000 and $20,000 per student.
Meanwhile, 1,000 people continue to move to Texas daily, putting more students in classrooms.
“The only way to solve it is to consolidate the smaller school districts,” Harless said. “It’s hard to get a state representative to say, ‘Let’s go consolidate two rural schools in my district.’ Because those school districts are the largest employers in those little towns. I don’t know how you ever solve the equity part of the finance system when you have situations like that.”
TEXAS EDUCATION COSTS MOSTLY PERSONNEL, LITTLE ROOM FOR DISCRETION
AUSTIN — The school finance case started up again this past week, going before the highest civil court in the state. Hundreds of school districts are suing Texas, alleging that the way schools are funded is inadequate and inequitable. They're not getting enough money, and it's not well spread around, they say.
School districts have to contend with rising costs like any other sector of business. Most of the state money, experts in the field said, is going to teachers and campus costs — and much is lost to an outdated way of figuring out costs.
Chandra Villanueva, with the Austin progressive think tank called the Center for Public Policy Priorities, said that there are three issues increasing costs.
"The three main cost drivers for education are: the quality of teachers, the standards in place and the type of student you're educating," she said.
The higher the quality the teacher, the higher the pay, she said. By standards she means the amount of testing and curriculum that is put in place. Getting tests together to find out how well students are doing is a costly process. And the type of student being educated has to do with the children who may have special needs or need extra attention because of their background.
Wayne Pierce, the executive director of Equity Center, another think tank that specializes in school finance, noted that 80 percent of basic educational costs goes to salaries and benefits. According to 2012-13 data, supplies and materials accounted for 9 percent.
That proposal to buy new computers or iPads for the classroom holds barely a candle to the cost of paying your educators.
"The vast majority of it goes to campus based" costs, Pierce said. "People talk about administration, but a nickel on the dollar goes to administration."
Schools are paying teachers, and teachers are seeing only modest raises, around 2 to 3 percent. And a lot of times health insurance costs that teachers share eats up any new money, Pierce said.
A superintendent recently told him "Used to, when you figured your state and local funding you would have a little room for special projects … now it takes all the money just for the basics," Pierce said.
Michael Barba, with the Texas Public Policy Foundation, agreed that labor costs take up the vast majority of school expenditure.
Barba highlighted that formulas for funding are in part based on the Cost of Education Index, sort of like the Cost of Living Index. The education index is responsible for distributing about $2.5 billion every school year, he said.
The formula hasn't been updated since the late '80s, he said. Some districts don't get the adjustment they would get if the formula were updated.
"If it's an inefficient cost driver, that's something that we're really opposed to," Barba said. "We can't say we just need more money."
Barba also highlighted labor laws and told an anecdote about a superintendent coming from a Midwestern state with plenty of unions, and even though Texas isn't unionized, the super said plenty of requirements that would be union requirements are already baked into law.
Each dismissal process thus ends up adding $80,000 to the cost, Barba said.
People aren't sure what might happen with the current school finance trial.
Some suggested the justices might wait until after the primaries so that their decision doesn't become political fodder. Others thought a ruling might come in the next few months.
The judges could say the state is doing fine, or say it needs more funding, or rework the way schools are funded altogether. In the last case, the Legislature could have a massive job ahead of it.
Local school districts weathered their share of $5.4 billion in cuts statewide by lawmakers in 2011, but they still face residual effects even as some 600 of them had their day in court Tuesday.
"Where we're still feeling the hit is going to be with personnel," Gladewater ISD Superintendent J. P. Richardson said, explaining the cuts fell on teachers who provided intervention for students in lower grades who were struggling with math or reading. "This year, we've been able to add back the reading part of it. But, again, we still don't have the math."
Gladewater is one of 443 school districts forming the biggest of six sets of plaintiffs suing the state over the 2011 school funding cuts.
In August 2014, District Judge John Dietz ruled the funding system unconstitutional in the lawsuit. The judge determined that schools don't have enough money to properly educate all students. He said funding is distributed unfairly, and districts are improperly restrained from raising the revenue they need.
Gov. Greg Abbott, then attorney general, appealed the ruling to the Texas Supreme Court.
Justices heard arguments Tuesday and aren't expected to rule until possibly next year.
Richardson estimates that the 2011 cuts translated to a $2.4 million loss in Gladewater ISD.
The district had about 380 employees.
"Now, we're down to around 310 employees," he said. "It's been hard on districts. I know it's been hard on Gladewater."
Per-student spending in Texas school districts averages $9,559, according to The Equity Center, which organized the 443 districts as the Texas Taxpayer & Student Fairness Coalition.
That's the 38th lowest per-student investment among all states.
In White Oak ISD, another member of the Equity Center's coalition, Superintendent Mike Gilbert reported that per-student spending in the coming school year is $8,500.
White Oak has handled the 2011 cuts by focusing, during the ensuing three school years, on cuts in materials, including software and curriculum support packages, Gilbert said.
"As far as actual dollar amounts of the cuts, it is hard to say," he said. "It was more of a trade: salaries for materials. We did not have any layoffs or reduction in force."
Neither White Oak, Gladewater nor Harleton — all plaintiffs in the lawsuit — have had to request waivers in the state mandate of a teacher for every 22 students in kindergarten through fourth grade.
Officials at Pine Tree ISD, which is not a plaintiff, also have not requested waivers to the ratio. The district did not report its per-student spending or the amount of cuts it faced in 2011.
The Texas Tribune reported the number of classrooms that exceed the limit grew from about 2,200 to about 8,600 in the school year after the 2011 legislative session that enacted the cuts.
"Our class-size waivers have come in the spring of the year when class sizes grew and there was less than half a semester remaining in the year," Gilbert said. "Two years ago, we were prompted to hire an additional teacher in the primary building due to increases in enrollment early in the fall."
Wayne Pierce, who directs the Equity Center, said Wednesday that the number of districts seeking a waiver from the 22:1 ratio spiked immediately after the cuts but fell in subsequent school years.
"But now, they are going back up," he said.
Pierce said local residents should care how the Texas Supreme Court eventually rules on the school funding issue because it directly affects their wallets.
"It's not just a student issue," he said. "When the state doesn't do its job, they just put it back on the taxpayers to fund it."
Pierce was in Kilgore on Wednesday updating superintendents at the Region VII Education Service Center on Tuesday's hearing in Austin.
He said the nine justices on the Texas Supreme Court gave little indication which way they might be leaning.
"They were hard to read because they were so even with questions," he said. "But, the questions indicate they do have a good insight into what the problems are."
Pierce said conventional wisdom among observers predicts a ruling from the state's highest civil court sometime after the March 1 party primaries.
Harleton ISD Superintendent Craig Coleman was among superintendents meeting with Pierce in Kilgore. He said afterward that his district has dipped into its fund balance each year since the 2011 cuts.
"It was around $900,000 for our district," Coleman said of the 2011 hit. "It was over 15 percent of our budget. ... We've had a deficit budget for the past four or five years."
Coleman did not recall his district's per-student spending level, but he did know he calculated it to $3.66 an hour a few years ago.
"So, for less than you pay a babysitter, you're getting transportation, education, extracurricular (activities)," Coleman said. "We're not trying to waste the taxpayers' money. We're really trying to educate the kids as cost-effectively and as efficiently as possible."
DEBATE OVER SCHOOL FINANCE HEADS BACK TO TEXAS SUPREME COURT
Last week was back to the classroom. This week it's back to the courtroom. It's been four years since more than 600 school districts sued the state over how it funds public education. On Tuesday, attorneys for both sides square off again, but this time should be the decisive round because it's before the state's highest court. Our Karina Kling takes a look at how we got here and what the stakes are moving forward.
The first day of school is always an important day for students and parents, but this year, one week after the school year begins will mark the beginning of another critical time.
The Texas Supreme Court will start the process of trying to decide if enough money is spent on schools and if each district is getting its fair share. Justices will hear about two and a half hours of arguments from the state and various plaintiff groups Tuesday.
The groups that sued will argue the way the state currently funds schools is inadequate and unfair. They're hoping for relief from the justices after lawmakers decided not to make any major changes this past session.
"The system is massively inequitable and inadequate," said Wayne Pierce, executive director of the Texas Equity Center.
That's what the attorneys for the more than 600 plaintiff school districts will argue. So far, they're 2-0 against the state in the current legal fight that began in 2011.
A state district judge has sided with the school districts twice, saying the way the state funds public education is unconstitutional.
"Our children will compete on a world stage -- a global stage -- and they must be educated at that level, and quality does take money," Pierce said.
But the state's Republican leaders have pointed to favorable test scores compared to other states and have repeatedly argued more money is not the end-all to improving public education.
"Our first goal has to be on creating an educational system that will advance students the best way possible and then funding that program," Gov. Greg Abbott said.
However, schools and public education advocates say the effects of the $5.4 billion lawmakers cut from public education in 2011 still linger today, despite some of that money being restored.
They point out another flaw: The unfair gap that exists between the top quarter of districts with high property wealth and poorer districts in the bottom quarter.
"At maximum tax rate, the higher funded districts have $50,000 more per typical elementary classroom of 22 children," said Pierce.
It's unclear when the high court might make a decision, but plaintiffs say it's a must-win situation for most districts.
"This isn't something we go back in a year or two. So, we're talking about an entire generation of students going through the system either funded adequately and given a true bite of the apple, or we're talking about another decade of mediocre," said Pierce.
This is the state's sixth school finance case since 1984.
When the Supreme Court does render its decision, the result could set up the potential for a special session of the Texas Legislature to overhaul school finance.
TEXAS SUPREME COURT TO AGAIN HEAR THAT STATE IS SHORTCHANGING SCHOOLS
AUSTIN — Shut out by lawmakers in their efforts to overhaul the state’s troubled education funding system, more than 600 school districts are now pinning their hopes for relief on the Texas Supreme Court.
The high court will hear arguments on the volatile issue of school finance Tuesday, once again taking up the question of whether the current funding system is unfair and inadequate.
It will be the seventh time in the last quarter-century that the court has been called on to settle a legal challenge over the way Texas funds the education of millions of children.
Gov. Greg Abbott weighed in on the issue last week, filing a brief that urges the justices to reverse the decision of now-retired state District Judge John Dietz of Travis County, who ruled for the districts last year. The governor argued that judges should not second-guess the Legislature’s decisions on education.
“Both as a matter of constitutional law and as a matter of responsible policymaking, the courts are not the appropriate forum for making decisions about statewide education policy,” Abbott said. “It’s time to stop fighting about school finance and start fixing our schools.”
The Republican governor argued that the Legislature “substantially increased” funding for public schools earlier this year. The plaintiff school districts note that the actual increases amount to about 1 percent a year for the past five years — less than the rate of inflation.
And those small hikes came after lawmakers enacted record funding cuts in 2011 to help offset a massive shortfall in state revenue without raising taxes.
Dallas and several other districts in North Texas are still at or below their funding levels from five years ago, and those districts that gained money didn’t get much extra.
“I don’t think attorneys for the state will spend a lot of time talking about [the small funding increases] at the hearing,” said David Thompson, attorney for the Dallas and Fort Worth school districts, as well as 82 other districts that make up one group of plaintiffs in the case. Other North Texas districts that are part of the group are Allen, Coppell, Denton, Duncanville and McKinney.
In his original ruling, Dietz suggested it could take an extra $2,000 per child to meet all state standards — representing a total price tag of $10 billion to $11 billion a year. State leaders have scoffed at that figure and earlier this year approved additional money for schools that amounts to about $750 million per year over the next two years.
Overall, the state is set to spend more than $54 billion on education in the two-year budget that takes effect Tuesday, a figure that includes federal money. School districts add billions more through local property taxes.
In a brief filed with the Supreme Court, Thompson said that inadequate funding along with state restrictions on school property tax rates “mean that the vast majority of districts cannot raise the revenue necessary” to meet increased academic standards imposed by the Legislature. That includes a more rigorous student testing program, and scores have remained relatively flat for four straight years.
Wayne Pierce, director of the Equity Center and former superintendent of the Kaufman school district in North Texas, said the hearing before the high court is a “must-win” situation for most districts. He said they’ve had to cope by making classes bigger, deferring building improvements and cutting staff.
The Equity Center represents 704 medium and small-sized districts. Two-thirds of those are plaintiffs in the school finance case.
In addition to insufficient funding, Pierce pointed to another big flaw in the state system: the inequity that exists between districts with high property wealth and poorer districts.
“The difference between the wealthiest districts in the top quarter of all districts and the poorest in the bottom quarter is a little over $50,000 per elementary classroom,” he said.
Pierce predicted it will be difficult for the nine Republican justices to ignore the gap.
Funds had House backing
The plaintiff school districts believe their case was bolstered in the legislative session earlier this year when House leaders launched an effort to fix the school funding system before the legal battle reached the high court.
House Public Education Committee Chairman Jimmie Don Aycock, R-Killeen, urged lawmakers to not wait on the Supreme Court and instead delve into the issue while lawmakers had billions of dollars in surplus revenues at their disposal.
“Do we want to do what’s right for the state of Texas and the children of Texas, or do we want to sit around trying to play lawyer and outguess the courts?” Aycock asked lawmakers.
His proposal to boost state aid and make key improvements in the system drew support in the House, but Senate leaders gave Aycock’s plan a cold shoulder, preferring to take their chances with the Supreme Court.
Attorney General Ken Paxton adopted a similar view and argued in a recent brief with the court that schools have enough money no matter what superintendents are saying.
“Most of them want more money,” the attorney general said, arguing that the Legislature has more than adequately addressed their financial needs. “Nothing about the current system’s structure, operation or funding is preventing [public schools] from achieving the Legislature’s goals for Texas students.”
Texas has moved up several spots in spending per pupil in the U.S. thanks to rising property values and more state funding, but its ranking in the bottom third of states in a study earlier this year still undercuts its position in the school finance case.
Texas ranked 38th in spending
Figures compiled by the National Education Association showed that Texas ranked 38th among the 50 states and the District of Columbia in the 2014-15 school year.
Dietz agreed with the plaintiffs that the system has particularly failed low-income and limited-English students, who have been “denied access to that education needed to participate fully in the social, economic and educational opportunities in Texas.”
The judge also highlighted the “large gaps” in funding between high-wealth and low-wealth districts, which he said violates a constitutional requirement that “children who live in poor districts and children who live in rich districts” be treated equally in paying for their education.
It’s unclear when the high court might rule after Tuesday’s hearing, but many lawmakers and education officials expect a decision this fall, setting up a potential special session of the Legislature next spring or summer to overhaul school finance.
KEY POINTS Three major arguments school districts have against the Texas school finance system:
EFFICIENCY: Districts argue that the finance system distributes money to school districts inequitably, giving some districts thousands of dollars more per student than other districts despite having similar property tax rates.
ADEQUACY: School districts say they are not receiving enough money to pay for programs required by the state and to ensure students meet standards set by the Legislature.
STATE PROPERTY TAX: School districts complain they lack discretion to raise enough funds because they’ve maxed out what they can tax property owners under state law, making school property taxes a de facto statewide tax, which is unconstitutional.
SCHOOL FINANCE ON TRIAL - TEXAS SUPREMES TO HEAR ARGUMENTS SEPT. 1
On Sept. 1, the Attorney General's office will have 45 minutes before the Texas Supreme Court to undermine Judge John Dietz's 2014 ruling finding the current school finance system unconstitutional. Then intervenor groups, including the Texas Association of Business-backed Texans for Real Efficiency and Equity in Education, will get 10 minutes to make their case, followed by 10 minutes for the Texas Charter Schools Association. Finally come the original plaintiffs: the Texas Taxpayer and Student Fairness Coalition (representing 400 poorer school districts, and led by research and advocacy group theEquity Center); the Texas School Coalition (representing 60 wealthier districts); a further 81 districts headed by Fort Bend ISD; and the Mexican-American Legal Defense and Educational Fund. Their lawyers will get a grand total of 60 minutes to explain why Dietz was right. In all, that's barely over two hours. Equity Center director of public affairs Tedrah Robertson said, "They'll be done before lunch."
This massive challenge to the size and method of the state's investment in schools has been brewing since 2011, when lawmakers, acting on the basis of a dire revenue estimate from Comptroller Susan Combs, cut $4 billion out of the baseline school finance budget. With a failure to account for inflation, that left a $5.4 billion hole. Successive legislatures have put some cash back (see timeline) but Equity Center executive director Wayne Pierce said, "You're talking five or six years, and they're not even where they were then."
The lawsuit argues 1) that the state puts too little money into the system, and 2) that it is split up among school districts inequitably. Pierce's latest calculation is that the top 25% of schools receive $50,000 more per 22-student elementary classroom than the lowest-funded 25% – a number that does not take into account the fact that the poorest districts also often have the most complex and costly students to educate.
Pierce noted that Tuesday's hearing will deal with constitutional niceties about the state's responsibilities. However, he said, "Whether or not the system is inadequate and inequitable is a separate question to whether or not our school finance system should be improved." The fact the state has failed to reach even the 2011 numbers should be sign enough, and he is pessimistic that the Legislature will act without a Supreme Court ruling. Moreover, he voiced concern that this could be a repetition of the last time the courts tackled school funding: Back in 2006, the Supremes only ruled on part of a previous challenge. Rather than actually reform the system, Pierce said, lawmakers "just used that as an excuse to cut taxes."
A ruling could take months to be handed down. Pierce said the best result for the state's students would be a strongly worded decision against the state that forces them to act sooner rather than later, preferably in a special session. That would require Gov. Greg Abbott (who previously defended the state's position as attorney general) to call the Lege back. He has seemed resistant to calling for a special session during his first term as governor, but the court could force his hand. If that happens, Pierce expects the call would go out after the March primaries. He said, "That would give them room to have several [specials], and then they could implement changes in the 2016-17 school year."
AUSTIN — After five years of battling the state in court for more funding, the Lewisville school district will receive $133 less per student in the coming school year than it did when the dispute began in 2011.
The Frisco school district will get $168 less per student this fall than in the 2010-11 school year. And Dallas will receive $55 less per student.
At least six other districts in North Texas are still at or below their funding levels from five years ago, and those that gained money added little. Statewide, the average increase for the five-year period is just 5.3 percent — barely more than 1 percent a year.
The lingering effect of the cuts will be a key issue in the lawsuit appeal the Texas Supreme Court has agreed to hear Sept. 1. The state is counting on the funding hikes to bolster its case against a lower court ruling last year that found the school finance system unfair, inadequate and unconstitutional.
While the state maintains that school finance is complex, making it difficult to determine how much should be spent per student, districts suing the state said that funding levels for the past five years speak volumes.
“I don’t think attorneys for the state will spend a lot of time talking about [the small funding increases] at the Sept. 1 hearing,” said David Thompson, attorney for the Dallas and Fort Worth school districts, as well as 82 other districts that make up one group of plaintiffs in the case. Other North Texas districts that are part of the group are Allen, Coppell, Denton, Duncanville and McKinney.
State officials say that there’s enough money in the system.
“Once again, a small army of litigants, lawyers, experts and interest groups is asking the courts to close Texas schools in hopes of spurring the Legislature to craft a public education system more to their liking,” Attorney General Ken Paxton’s office said in a recent brief to the Supreme Court. The remarks were aimed at more than 600 school districts — including Dallas and several others from North Texas — that are pitted against Paxton and the state in the case.
“Most of them want more money, many would prefer that money be raised and distributed differently,” the attorney general said, arguing that current funding approved by the Legislature is enough. “Nothing about the current system’s structure, operation or funding is preventing [public schools] from achieving the Legislature’s goals for Texas students.”
Thompson said that the annual increases haven’t even covered the cost of inflation and other expense factors. And he noted that while funding has been flat, “the state raised standards, imposed a new battery of student tests and emphasized college and career readiness for all students. They have continued to ask more of school districts while giving them less to work with.”
Wayne Pierce, director of the Equity Center and former superintendent of the Kaufman school district in North Texas, said larger class sizes, deferred building improvements and staff cutbacks are among the effects of inadequate funding from the state.
“We definitely have not kept pace with what parents expect their public schools to offer,” said Pierce, whose organization represents 704 medium-size and small school districts in Texas. Two-thirds of those districts are among the plaintiffs in the school finance case.
He said while lawmakers took some steps to decrease inequities between higher-wealth and lower-wealth school districts back in 2013, the funding gaps are again increasing.
Pierce predicted the average funding increase of around 1 percent over the past five years would be a red flag for the Supreme Court.
“I don’t see how the state can expect the court to be impressed with that number,” he said, adding that school superintendents and school boards across the state were discouraged that the Legislature did so little for public schools in the 2015 session.
Calls for change
Some lawmakers tried to address the suit.
House Public Education Committee Chairman Jimmie Don Aycock, R-Killeen, urged lawmakers earlier this year to step up and fix the troubled school finance system without being ordered to do so by the Supreme Court. His proposal to boost state aid and make key improvements in the system drew support in the House, but Senate leaders said they would take their chances with the high court.
“Do we want to do what’s right for the state of Texas and the children of Texas, or do we want to sit around trying to play lawyer and outguess the courts?” Aycock asked lawmakers. His comments have been cited by school districts as evidence that dramatic change is needed.
Other Republican leaders have contended that extra money is not the key to improving schools.
“We just can’t give them more money and let them keep doing the same things they’ve been doing,” Lt. Gov Dan Patrick said. Patrick has pointed to the $1.5 billion in new money that the Legislature approved for the coming two school years — an amount he says will provide “quality public education.”
During the session, the Republican was more interested in touting the modest school property tax cut lawmakers approved this year, which amounts to about $125 for the typical homeowner — about a 3.75 percent decrease on the average tax bill.
Patrick has also taken issue with claims that schools are still reeling from the unprecedented $5.4 billion in funding cuts enacted by the Legislature in 2011. Those reductions, which prompted school districts to sue the state, were partially restored in 2013.
“Our schools survived, and we did fine,” Patrick said.
Democratic leaders noted that the state is flush with cash, even after writing the next two-year budget.
“Our public schools will be no better off than they are today even as billions of available dollars were left untouched,” said Senate Democratic leader Kirk Watson of Austin, referring to funds that were left on the table by lawmakers.
Texas has moved up several spots in spending per pupil in the U.S. thanks to rising property values and more state funding, but its ranking in the bottom third of states in a study earlier this year still undercuts its position in the school finance case.
Figures compiled by the National Education Association showed that Texas ranked 38th among the 50 states and the District of Columbia in the 2014-15 school year.
THE EDUCATION SESSION - SCHOOL FINANCE BATTLE TAKES CAPITOL CENTER STAGE
If there's a poster child for what's best about Texas school kids, she could be Regan Lively. With a slight quaver in her voice, the high school senior from Flower Mound took to the podium at the April 18 Save Texas Schools Rally at the Capitol to tell her story. She has overcome profound dyslexia, and this year was accepted into Oklahoma Christian University, with a $16,000 scholarship. But unless she graduates, she can't go – and she won't graduate, because she has failed the U.S. History STAAR test. She told the assembled crowd of educators, administrators, trustees, parents, and kids, "As elementary students we are taught to shoot for the moon and reach for the stars, but when the challenge of a test comes across, our anxiety kicks in, and our dreams are shattered right before our eyes."
Students like Lively have also become walking, talking metaphors for what Texas education does wrong. The figures laid out at the rally were stunning, and well-established. Texas has a massive and expanding student population – it grows by 85,000 students annually, equal to adding the entire student body of Rhode Island to Texas schoolrooms in the last decade. Yet, even as Republican politicians boast about the "Texas economic miracle," per-student spending has dropped by roughly 25% since 2009. Specialist resources to help kids with extra needs, like dyslexia, or for the growing number of English language learners, are scarce to extinct. At the same time, the testing regimen has swallowed more and more of classroom time, and more and more of the operational budget. It's a minor miracle anyone graduates.
And the testing anxiety? That's what lawmakers seem to face, every time someone talks about school finance reform. It's too big, too complicated. Put money in one school, you have to take it from another. Yet the 84th Legislature has seen the most serious conversations yet about how – and how much – Texas should pay for its public schools. The question now is, are they doing enough?
A Perfect Storm
This was always going to be an education session, due to a confluence of three factors. First, a new governor: In his inaugural State of the State address, Gov. Greg Abbott declared education a top priority. Second, the 2013 passage of omnibus education reforms in House Bill 5, which brought sweeping changes to exams, graduation requirements, and how the state assesses schools and districts. With changes that broad, lawmakers knew they would be coming back to tweak the system after a couple of years of field testing.
Then there's the third factor: the 2014 ruling by state District Judge John Dietz that found that the whole Texas school finance system fails to meet its constitutional obligation to provide adequate and equitable funding. Texas' lousy track record on school finance had reached a new low in 2011, when then-Comptroller Susan Combs handed down a budget forecast of gloom and doom, and in a blind panic the Legislature went on a budget-slashing frenzy, cutting $4 billion out of public education funds for the 2012-13 biennium. However, because the state also failed to cover the increase in student enrollment or even inflation, schools were really $5.4 billion in the hole. In 2013, with a slightly rosier financial forecast, the state added $3.4 billion back. However, that barely covered enrollment growth or inflation, and did nothing to dent the hole they had dug two years earlier.
So 2015 is a perfect storm, a session when education holds center stage. And that's good news for lawmakers like House Public Education Committee Member Rep. Dan Huberty, R-Kingwood. On April 9, over the opposition of the Tea Party rump, the House passed his HB 4, establishing a $130 million fund for qualifying schools to help pay for half-day pre-K. Huberty is also sponsoring and shepherding SB 149 by Sen. Kel Seliger, R-Amarillo, setting up graduation committees that look at more than just test scores. That's exactly the kind of alternate path to graduation that students like Regan Lively – and 20,000 kids across the state just like her – need. "That's got to get done," he said, "so we can help these kids graduate."
Huberty admits the rollout of HB 5's testing reforms was "horrible," and most would agree with him. Yet while there are plenty of fixes to HB 5 still waiting in the wings, the real debate remains focused on money, and the center of attention is HB 1759 by House Public Education Committee Chair Jimmie Don Aycock, R-Killeen. It's the first serious attempt to shift how the state distributes money in more than a decade. Rather than wait for the courts to force his hand, Aycock took the initiative, and many of his fellow reps have his back.
In the House, school finance is a bipartisan issue, and that reflects a larger change. Texans – well, apart from the Tea Party – seem sick of seeing their school districts used as a punching bag. Groups like Save Texas Schools are gaining traction, while the pro-public ed Texas Parent PAC has become one of the most effective endorsers in primaries on both sides of the aisle. Louis Malfaro, president of Texas AFT, noted the teachers' union is just about to charter its latest affiliate in Waco. "We're growing across the state," he said, arguing that that indicates a strengthening of resolve. Even lawmakers are turning the tide. Malfaro cited the speech by Clarksville Republican Rep. Gary VanDeaver at the Save Texas Schools rally: "He said, 'I was a teacher and a superintendent, and gosh, I didn't know how bad our schools were until I got to Austin.'"
So HB 1759 has powered through the House. But just because school finance is a bipartisan issue, that does not mean it's bicameral. Center for Public Policy Priorities policy analyst Chandra Kring Villanueva notes that while the House has shown real determination, "the Senate has shown no intention to deal with school finance. ... It's a one-sided arrangement."
House vs. Senate
The Legislature is a simple place, and historically there's good reason why they called the Senate the upper chamber. That was traditionally the place where bad ideas, many of which originated in the hurdy-gurdy madness of the House, went to die. Now, with Lt. Gov. Dan Patrick in charge, and barn-burning radicals like New Braunfels Republican Sen. Donna Campbell at his back, all that's gone out the wood-blinded windows of the Senate chamber. As Malfaro puts it, "The House is in touch with reality, and the Senate is in the USS Koch Brothers, orbiting planet ALEC" – referring to the American Legislative Exchange Council, the corporate-funded conservative bill-mill.
Not that the Republican-dominated House has morphed into tax-and-spend liberals. The House and the Senate are locked in a fight over tax cuts: The lower chamber wants a mix of business margins franchise and sales tax cuts, while their colleagues across the Dome are eyeing franchise and property tax cuts. How can they pay for this? By using part of a supposed $8 billion surplus – a surplus created by years of slashing school spending. House Appropriations Committee veteran Rep. Dawnna Dukes, D-Austin, said, "Cost, growth, and inflation have historically been ignored in state budgets. We now see it is designed to provide cuts, not to properly consider the greater and ignored needs of Texas."
But at least the House leadership is trying. The Senate seems to have no interest in Aycock's structural reforms, or Huberty's pre-K investment, and instead is pushing hard on vouchers and tax breaks for businesses handing money to private schools.
Even their core education budgets diverge by billions. HB 1, the House draft budget, proposes an extra $2.2 billion for inflation and population growth, the Senate version a billion less. And then there's Aycock's bill, with an extra $800 million hidden up its sleeve.
Band-Aid on a Hemorrhage
If HB 1759 passes, few districts will see more benefit than AISD. Board President Gina Hinojosa explained: "There's no district in the state that exemplifies how broken the school finance system is than Austin." Like Villanueva at the CPPP, she praised Aycock for starting the debate. "I love his quote about, rather than pay the lawyers, let's do what's right for the children of Texas."
What HB 1759 changes is not just how much money there is, but how the money is distributed. The changes are limited: Aycock himself has said this is a two-year fix, and lawmakers need to come back in 2017 to tackle "weights" Texas uses to adjust the basic allotment for higher-needs students. For example, the bill would get rid of the Cost of Education Index, a fudge factor designed to reflect the comparative cost of educating in an expensive city. However, the equations haven't been updated since 1991. Edna Butts, the district's director of Intergovernmental Relations & Policy Oversight, said, "AISD has the same CEI as Killeen, and we're less than Round Rock. If Austin was rated the same as Houston, we'd get $13 million more."
Among a slate of tweaks, Aycock's plan would simply kill the CEI and put the cash in the basic allotment, which benefits AISD. Similarly, the district would finally get state assistance on transportation costs. So in raw numbers, what would this mean for AISD? Butts explained, "We have three different scenarios out there. We have House Bill 1 passed by the House, we have the committee substitute to House Bill 1 passed by the Senate, and neither factor in Aycock's bill quite yet." If the House version passes, then AISD gets another $19 million a year in its basic allotment. If the Senate wins out, then it's $10 million. But if HB 1759 passes, that means $48 million a year over the biennium for AISD.
Not everyone is happy with that shift. The Equity Center is one of the core groups involved in the current litigation, and its executive director, Wayne Pierce, is among the growing crowd that applauds Aycock for starting the discussion. However, that doesn't mean that he's happy with HB 1759; he argues that it does more for wealthy districts than poor ones. That's why he's critical of steps like eliminating the CEI, which he claims needs fixing, not killing. Pierce said, "They're putting the money in the right place. On the other hand, they're taking it from the wrong place."
The biggest hidden benefit for wealthier districts would be in recapture, aka the notorious "Robin Hood" system, whereby property-rich districts like Austin send a portion of their taxes to the state to fund poorer districts. AISD is the biggest single contributor, paying 11% of the statewide total collected, and Travis is the biggest contributing county. HB 1759 doesn't change that status, but it would mean some relief. Rather than the $228 million recapture AISD forecasts for 2017, it would be closer to $180 million – still bad, but not crippling. However, with the Legislature known for its volatility, Butts isn't cutting checks yet. She said, "We haven't done new plans based on Aycock's bill yet. We don't want to jinx it."
This sounds promising, but then it also sounds horribly familiar. There's a cycle in Texas politics. Lawmakers create a system. They get sued over it. After years of appeals, they lose. They come up with another system, or at least some serious tweaks. They get sued over it, and so on, and so forth (see timeline below). It's a 40-year cycle – less trial-and-error than trial and trial date. Huberty said, "School finance has always been, we put a Band-Aid on it, to fix one problem and then, oh, geez, we've got another problem."
Even Austin Mayor Steve Adler has been in those trenches. In 1997, he was chief of staff to then-Sen. Eliot Shapleigh, D-El Paso, fighting to get changes made to the weighting system. First set in 1982, after 15 years the weights were completely out of line with the actual costs of educating special needs kids and English language learners. But reformers failed to achieve any changes, and those same weights remain in place – that's 33 years of changes in educational theory, practice, and realities that Texas school finance ignores. As mayor, Adler sees school finance another way: The biggest chunk of local property taxes goes to school districts, so high ISD tax rates have a direct effect on affordability. Adler said, "There's only a shift in education funding when one of two things happens. The first is a court rules and mandates a change. The second is when the business community gets together and says that, for the economic well-being of their businesses in the state, things need to change."
This time, Texas has both factors working, with the Dietz ruling, and a broad coalition of industries, spearheaded by the normally anti-tax Texas Association of Business, calling on Gov. Abbott to abandon tax cuts in favor of education and infrastructure investment. That bodes well for Adler, who said, "We're only as strong as the court backing that we have, and our allies in the business community."
Another reality check: Any of this can change in an instant. While Huberty remains optimistic the Senate will play ball, Patrick has expressed little interest in filling the billion-dollar void between his and the House's plans. Aycock has even warned that, if HB 1759 passes without the $3 billion it needs to work, he will ask Abbott to veto it.
And there's a deeper question: Is this a real fix, or is this just another spin on the legislate/litigate merry-go-round? Aycock has been explicit that this is a two-year Band-Aid before the surgery begins. The CPPP's Villanueva argues that Aycock's $3 billion is a fraction of the $6 billion to $8 billion that public schools need right now, and then that the new basic allotment needs to become inflation- and poverty-linked. Moreover, she notes, the problems with the franchise tax that the Legislature is trying to fox through cuts came about from a 2006 revision intended to put more money into – you guessed it – school finance. She said, "If we get rid of this revenue stream, we just have to replace it with another, and we become more dependent on sales tax or property tax."
Will HB 1759 even be enough to placate the courts? Pierce of the Equity Center thinks not. First, even if it passes, and the full $3 billion is injected, it will still barely touch the lowest definition of adequacy. Pierce said, "The Constitution is not what we need for public education. It's the least that we do for public education." But he's realistic about the size of the task, adding, "We have a severely inefficient funding system, and I don't think you can fix it all in one session." Until the state adds real money to replace property taxes, and tackles the weights, Pierce said, it's all triage. "It's like we have a dog who has mange, and we're trying to fix it by putting salve on the tail."
Jimmie Don Aycock, chairman of the Public Education Committee in the Texas House, sounded proud when he announced last week that he and his colleagues are determined to rewrite the state’s public school finance plan.
He should be proud. The question now is whether he can avoid the old traps that have led to failure and inequity in so many previous plans.
An Austin judge last year declared Texas school financing so badly flawed that it violates the state constitution, and the Texas Supreme Court will examine the issue later this year.
“The Legislature is faced with a decision to either act proactively and try to get something done about education funding or simply do nothing and sit back and wait and see what the courts say,” Aycock told reporters at a March 25 news conference.
The 2016-17 budget bill passed by the House this week would give him $4 billion in extra funding — beyond the $30 billion in general revenue funds needed to continue current programs and pay for annual enrollment growth — to use in a new school finance plan.
That’s important. In his ruling last year, State District Judge John Dietz said one of the flaws of the current system is that it does not deliver enough money to enough school districts to allow them to meet state-mandated education goals.
Aycock has stated some of his “big-picture objectives,” but he has not said how he intends to fix the system.
One of the important things to look for when he lays out his plan — he says he’ll do that in time for the Senate to consider it before the session ends on June 1 — is how much he’ll accomplish through formulas targeting specific educational goals. Formula funding treats all districts the same.
Contrast that with how much of the $4 billion he’ll simply shovel to specific school districts that would lose under a strictly formula-driven plan.
People who follow school finance maneuverings in Austin call the latter approach “hold-harmless” funding, although the term evokes so many bad memories that many try to avoid it.
Wayne Pierce, executive director of the Equity Center, an Austin organization that has advocated funding for low-wealth school districts for more than three decades, estimated this week that as much as $4 billion out of each two-year state education budget gets spent through “random, haphazard, non-cost-based” hold-harmless provisions in current law.
Initially, those provisions are usually thought of as temporary work-arounds to ease the transition to new funding formulas. But Pierce says one of them has been in use for 23 years.
The subsidy must end sometime, he wrote. “It might as well be now.”
Another provision sets out “target revenue” for some school districts. It started in the 2006-07 school year, and in 2011 the Legislature said it would end with the 2016-17 school year.
Pierce says by its scheduled end date the target revenue provision will have sent almost $25 billion to some of the state’s 1,000-plus school districts.
Some powerful school districts will lose a lot of money if their target revenue checks no longer arrive. Aycock says Houston ISD is in that group, to the tune of about $101 million.
No surprise, Pierce says some districts want the subsidy continued.
“The Texas Legislature posted a clear warning sign in 2011 that this hold-harmless would end in six years,” Pierce wrote. “A six-year warning that an eleven-year-old temporary hold-harmless is ending is sufficient notice.”
Yes, but it is Houston ISD, the state’s largest district, in the state’s largest city. No fewer than 32 legislators, including some of the state’s most powerful, represent districts wholly or partly in Harris County. Many more are within its sphere of influence.
That puts a lot of pressure on Aycock, who is from San Angelo. But he volunteered for the job.
TEXAS MOVES UP IN SPENDING PER PUPIL, STILL RANKS IN BOTTOM THIRD
AUSTIN — Texas has moved up several spots in spending per pupil in the U.S. thanks to rising property values and more state funding, but its ranking in the bottom third of states in a new study still undercuts its position in the long-running school finance case.
Figures compiled by the National Education Association and released Wednesday show that Texas schools are spending an average $9,559 per student in the current school year. That is well under the national average of $12,040 and ranks Texas 38th among the 50 states and District of Columbia.
Last year, Texas was 46th in the comparisons, based on numbers furnished to the NEA by state education agencies.
Texas also is now spending just under $100 more per student than four years ago, when massive funding cuts were enacted by the Legislature. Compared with the national average, Texas is spending $54,582 less per elementary classroom, according to the NEA study.
“We are still in the bottom tier of states when it comes to the money we spend on our public school students,” said Clay Robison, a spokesman for the NEA-affiliated Texas State Teachers Association. “This is a step in the right direction, but the Legislature can’t claim credit because a lot of this money is coming from local property taxpayers.”
Robison noted that about 49 percent of funding for schools comes from local property taxes, while just over 40 percent is from the state — a percentage that has been declining in recent years. The rest comes from the federal government.
The Texas Supreme Court is now considering a lower court ruling that found the school finance system unfair and inadequate to educate the state’s 5.2 million schoolchildren.
The ruling by state District Judge John Dietz came in a lawsuit filed by more 600 school districts that contend the current funding system is unconstitutional. The districts argued the Legislature has consistently underfunded schools while imposing new and expensive academic requirements for students.
Preliminary NEA figures also show that per pupil spending in Texas — with increased property tax revenue and state aid — has now slightly surpassed what was spent in the 2010-11 school year. That was the year before the Legislature imposed unprecedented funding cuts for schools to help balance the state budget.
Texas spent $9,462 per student in 2010-11. Four years later, the state is spending $97 more per student in the current school year, according to the study.
Wayne Pierce, director of the Equity Center, said the increase amounts to a little over 1 percent for the four-year period, hardly an impressive number when inflation, rising costs and other factors are considered. The Equity Center represents hundreds of low and medium-wealth school districts, many of whom are plaintiffs in the school finance case.
“The arguments of school districts about the many problems in our school finance system are just as strong now as they have ever been,” Pierce said. “There is still lots of room for the state to increase its funding for public schools.”
Pierce noted that lawmakers cut $5.4 billion in education funding in 2011 and restored only a portion of that — $3.4 billion — two years ago. He said he is encouraged that House leaders have proposed a $2.2 billion funding increase on top of money for enrollment growth. The Senate has no similar provision in their proposed budget.
Meanwhile, many Republicans insist that there is an overemphasis on funding rather than the results schools are getting.
Former House Public Education Committee Chairman Rob Eissler said only two states — New Hampshire and New Jersey — allocate a greater percentage of their state and local taxes for education than Texas. Eissler chaired the education committee in 2011 and supported the funding cuts that year as necessary to offset revenue reductions.
He contends the state should be making sure its education dollars are spent wisely rather than constantly looking at how much additional money schools need.
“We need to look at spending and results, and look at what we get for our spending. It is not how much you spend, but how well you spend it,” he said.
While some conservative groups have argued that more funding for schools will not make a difference, a Texas Education Agency analysis two years ago found that schools with the highest student performance ratings were generally those that spent more on their students.
NEA figures released Wednesday also showed that the average teacher salary in Texas moved up in the rankings this year, from 35th to 29th. Teachers earned an average $50,576. That was up about $886 from a year ago. But Texas is still well below the national average of $57,379.
House education chairman proposes super taxing districts for Texas public schools
AUSTIN — School districts across Texas would be merged into super districts for tax purposes under legislation the chairman of the House Public Education Committee offered Monday.
Rep. Jimmie Don Aycock, R-Killeen, said his bill was filed to address the complaints of a state judge. The judge declared the current school finance system unconstitutional, in part because of wide differences in spending per student among school districts.
Aycock’s bill calls for creation of at least 30 “school finance districts” across the state to even out funding levels among Texas’ 1,026 regular districts. Most of the super districts would include several small and midsize districts. The goal is to provide all districts funding per student that is within $300 of the statewide average.
“This basically narrows the difference in taxable wealth per weighted student by forcing consolidation for tax purposes only,” Aycock explained in a letter to House members.
Aycock called his proposal “very rough” and subject to change. And he isn’t even sure he will pursue it as the legislative session moves forward.
“This would be a major departure from present law and would require much thought and modification,” he said.
But it marked the starting point of discussion about how to respond to the court ruling, which the state has appealed.
The super finance districts would require approval from local voters and be managed by boards that include representatives from all districts contained in each super district. All of the school finance districts would have to be approved by the state education commissioner, who could force consolidation where local officials were unable to reach agreement on a merger.
An association that represents hundreds of low- and medium-property-wealth school districts applauded Aycock for drawing attention to the school finance issue as the legislative session begins Tuesday.
“It is a very innovative and interesting idea,” said Wayne Pierce, executive director of the Equity Center. “We’re glad he filed the bill because it starts a discussion that very much needs to take place.”
Pierce said the maximum $600 spending gap per student that would be allowed under the plan is “a big step forward to restrict the current inequities in the funding system.”
During the school finance trial before state District Judge John Dietz last year, it was estimated that there is a $2,463 gap in basic education funding per pupil between the wealthiest 15 percent of districts and the poorest 15 percent.
A school district consolidation plan similar to Aycock’s was actually approved by the Legislature nearly 22 years ago in response to a court ruling that declared the state’s funding system unconstitutional. That bill authorized creation of county education districts — each comprising several districts within each county — to help equalize funding among districts.
However, the plan was subject to voter approval and was overwhelmingly rejected in a statewide election on May 1, 1993. Nearly 63 percent of voters in the election said no to the proposal.
Texas Legislature unlikely to boost school funds in upcoming session
AUSTIN — The lowest SAT scores in more than two decades. School funding that ranks Texas among the bottom five states.
And oversized classes in nearly 1,300 elementary schools last year to save money.
It would seem that Texas schools might be due for a sizable funding boost when the Legislature convenes in January, particularly after a state judge ruled last summer that Texas was severely underfunding its education system. But local school officials aren’t counting on much relief.
“If you look at how much we spend per child, it is really sad that Texas is funding public education at a level that is significantly lower than the average for the country,” said David Anthony, former superintendent of the Cypress-Fairbanks school district and chief executive for Raise Your Hand Texas, a public education advocacy group. “Money is not the only answer. It takes more than that to improve schools. But it is certainly a significant part of the solution.”
And while legislative leaders have voiced willingness to consider some additional money for schools in the next two-year budget, they have also pointed to other state needs — and the desire of many Texans for lower taxes.
In fact, lawmakers have talked more about cutting taxes — including school property taxes — than providing a funding boost for schools. Lawmakers have already offered several tax reduction bills.
House Public Education Committee Chairman Jimmie Don Aycock, R-Killeen, said he expects lawmakers to consider some changes in school funding. But he added that major revisions are unlikely while the state appeals the school finance decision to the Texas Supreme Court.
That order from state District Judge John Dietz found that the Legislature failed to meet its constitutional duty to adequately and fairly fund education for the state’s 5 million public school students. The decision came in a lawsuit filed by more than 600 school districts.
“We will do small fixes within the present system and possibly put some additional money in,” said Aycock, a former Killeen school board member. “Beyond that, any bigger decisions will wait until we see what the Supreme Court does.”
Lt. Gov.-elect Dan Patrick, outgoing chairman of the Senate Education Committee, said this fall that he had an open mind on school funding. But he argued that it would be irresponsible to simply pump more money into schools without demanding results.
“We just can’t give them more money and let them keep doing the same things they’ve been doing,” Patrick said. “We need accountability. We need improvement.”
Patrick has also taken issue with claims that schools are still reeling from the unprecedented funding cuts of 2011. Those reductions, which prompted school districts to sue the state, were partially restored in 2013.
“Our schools survived, and we did fine,” Patrick said.
While Republican leaders generally favor a wait-and-see approach depending on what the Supreme Court does, many Democrats contend it would be a mistake to do nothing in the upcoming session.
“There’s a lack of political will to do anything about our school finance system until we’re forced to do so by the court,” said Senate Democratic leader Kirk Watson of Austin. “Everybody knows our school finance system is broken, and continuing to do nothing about it is a disservice to the schoolchildren and taxpayers of Texas.”
Watson has filed a package of bills that would boost various funding sources for school districts, such as more help with transportation costs.
Representatives for school districts note that since the 2010-11 school year, funding per student in Texas has increased about half a percent a year, while school districts continue to enroll more low-income and limited-English students, who are more expensive to educate. They also insist there is now little waste in most districts.
“Nothing more can be cut from public education,” said Wayne Pierce, former superintendent of the Kaufman school district and current executive director of the Equity Center. The center represents nearly 700 low- and medium-wealth school districts.
Pierce said any effort to delay changes beyond the 2015-16 school year “will only hurt our schoolchildren.”
But conservative groups challenge the notion that student achievement will improve with additional funding.
“The current data does not show that increased resources lead to improvements in student performance,” argued former House Public Education Committee Chairman Kent Grusendorf, now a senior fellow at the Texas Public Policy Foundation.
In a policy brief for the conservative think tank this fall, the former GOP lawmaker from Arlington said that after decades of investigation, “it is clear that how money is spent is much more important that how much is spent.”
Grusendorf noted that some prominent studies have found that class size and school funding — “a rallying cry of education reformers for decades” — are not significant indicators of student achievement.
But in Texas, results on the primary achievement test, the State of Texas Assessments of Academic Readiness, or STAAR, have been stagnant in reading the past few years while school funding levels were down for many districts — and class sizes were up.
Many high school students have struggled on the five STAAR end-of-course exams. And that’s after lawmakers last year scrapped 10 course-exit tests — arguably the most difficult ones in the group.
SAT math scores for the Class of 2014 in Texas were the lowest in more than two decades. Reading scores were the second-lowest during that period on the college entrance exam.
State education officials attributed the drop to an increase in the number of minority students taking the exam. Minorities generally perform worse than white students on standardized achievement tests.
But in California, students outperformed Texas students by big margins — 15 points in math and 22 points in reading. Student demographics are similar in both states. And California had more low-income students take the SAT than Texas this year.
One difference, though, was that California spent about $800 more per student than Texas. The Lone Star State was in the bottom five among the 50 states and District of Columbia, according to figures compiled by the National Education Association, a teacher group that closely tracks spending.
Clay Robison of the Texas State Teachers Association said lawmakers should recognize that inadequate funding is having an impact. For one thing, he said, larger class sizes make teaching more difficult.
“Texas is enrolling more and more lower-income and limited-English students at the same time many of our elementary classrooms continue to exceed class size limits,” he said. “The problem is that those students need more attention. But that is hard to do when you have larger classes.”
If the Texas school districts that are challenging the constitutionality of the state’s school finance system ultimately prevail in their lawsuit, a result could be billions of dollars in extra funding from the state’s coffers for public education.
And more than $8.5 million would also go from the state to the four teams of lawyers representing them. Late last month, state district Judge John Dietz of Austin ruled in the districts’ favor, saying the Texas school finance system leaves school districts without the resources to meet the state’s academic standards. Among the evidence he cited in his findings was the “dismal” performance of poor and English language-learning students in Texas compared with their peers; the 100,000 students not on track to graduate high school on time and the high remediation rates of students who go on to college. The state plans to appeal the ruling.
Dietz also ordered the state to pay for the plaintiffs’ legal tab, which has surpassed $8 million, along with additional costs as the case goes through the appeals process.
The award came over protests from the state, which raised a number of objections, including paying for travel costs for lawyers and witnesses coming to Austin from across Texas. The trial, which lasted a total of 55 days and involved more than 90 witnesses, ended in early spring.
But Dietz said it was “equitable and just” to award the fees, which did not include time spent by the districts’ legal teams on public relations or legislative matters unrelated to the litigation. Dietz said that travel expenses were not excessive.
“The litigation involves districts from across the state with different interests and perspectives. It is entirely predictable and necessary that plaintiffs’ counsel would be drawn from across the state,” he said in his ruling.
The total cost to the state in the litigation — which followed lawmakers cutting almost $5.4 billion from public education in 2011 — is unclear. The sum that Dietz awarded comes on top of the state’s own expenses in defending the lawsuit, which a spokeswoman for the Texas attorney general’s office said the state had not calculated.
But if the state ends up paying the districts’ legal fees, that money would probably go back into the districts’ local budgets. Though arrangements vary among the four groups of districts that are parties in the lawsuit, their lawyers said they intend to return any money they receive from the state to cover their costs.
“If we ever do recover our fees, we simply refund the districts,” said David Thompson, a Houston attorney representing the largest group of school districts in the case.
When school districts joined Thompson’s lawsuit, which includes about 80 from across the state, he said each agreed to pay a dollar per student, with a cap at $65,000, annually for two years.
School districts that joined a separate coalition in the lawsuit, led by the Equity Center, a research and advocacy group that represents low-property-wealth schools, were also asked to contribute a dollar per student.
But that included the caveat “that any amount, including zero dollars, would be acceptable if that’s what a district needed to do,” said Wayne Pierce, the director of the Equity Center. That initial collection was enough to cover the first round of the trial that began in October 2012, Pierce said, but not the second session that Dietz called after the 2013 legislative session.
At that point, Pierce said, the group asked districts to make a second contribution of 50 cents per student. Now, he said, the group should have enough to cover the expected appeal.
Judge John Dietz must have a terrible case of déjà vu. In 2004, he told Texas lawmakers that the state's public school-finance system failed to meet the state constitutional requirement to educate all children. A decade later, and he has issued basically the same ruling.
On Aug. 28, Dietz handed down his final ruling in a lawsuit brought in 2012 by the Texas Taxpayer and Student Fairness Coalition (a group brought together by the Equity Center and representing 443 school districts) and the Texas Charter School Association. He ruled that, since the current system makes so many demands on local independent school districts, it amounts to a de facto state property tax. Moreover, the end result violates the education clause of the Texas constitution, requiring that the state provide an "adequate" and "equitable" education to all children.
Technically, the defendants were Commissioner of Education Michael Williams, Comptroller Susan Combs, and the State Board of Education. However, the real target were the Texas lawmakers who created the current system after Dietz's 2004 ruling. State Rep. and House Appropriations Committee member Dawnna Dukes, D-Austin, said, "As legislators, any ruling that behooves ensuring equitable, sufficient, quality education, and funding for the school children of Texas, is a victory. As appropriations committee members, this means we have to buckle down and make a commitment that is true and strong to financing our schools in the proper way, and not rolling the responsibility downhill to local government."
Dietz's ruling was not a surprise. He issued a preliminary oral opinion last year ("Dietz Rules Against School Finance System," Feb. 8, 2013) but gave lawmakers a chance to improve the situation during the last legislative session. However, their solution – return $3.4 billion to fill the $5.4 billion hole they dug in 2011 – was insufficient. When Dietz reopened proceedings earlier this year, the state's response was direct: Attorney General Greg Abbott tried, unsuccessfully, to have the judge recused. Now Abbott is widely expected to challenge the ruling at the state Supreme Court. However, in a statement, Equity Center Executive Director Wayne Pierce said, "Judge Dietz's ruling marks an incredible first step to achieving a system that treats our children and property taxpayers fairly."
The current system basically breaks districts down into two categories: property-wealthy, and property-poor. The wealthy ones are commonly referred to as "Chapter 41" districts, from the relevant section of the Texas Education Code. They contribute funds from their property tax revenue to the state, which re-allocates it to districts with lower property tax income. Chapter 41 district Austin ISD is in the worst of positions: While its property values are high, its needs are great, and a large majority of its students are poor. On Aug. 26, the board of trustees approved its 2014-15 budget; this year alone, AISD will lose $175.5 million to the state under recapture, while spending $24.9 million of its reserves just to cover operating expenses.
In all, AISD taxpayers have sent $1.66 billion to the state since 2002 and, if the current system does not change, the administration calculates that the annual contribution will increase to $300 million by 2018. Interim Superintendent Paul Cruz described Dietz's ruling as a chance to reinforce the district where it needs the most help. "Increased standards and an emphasis on post-secondary readiness for all students are the right goals for Austin ISD schools. We must have additional resources if we are to provide the interventions and individualized attention our struggling students need in order to succeed."
Dukes, whose district includes parts of both Austin and Pflugerville ISDs, echoed Cruz's sentiments, adding that the current "Robin Hood" system cannot be left as is, and the state must pick up its share of the tab. She said, "I hope that the resolution will not be the grand burden that our districts have had to encompass."
The afternoon of the final ruling became a cavalcade of press releases from statewide groups. The majority hit basically the same two talking points, summed up by Texas American Federation of Teachers President Linda Bridges. Point one: "The kids are worth it, and they shouldn't have to wait any longer for the state to do what's right." Point two: "State officials should stop trying to defend this indefensible system."
A.G. Abbott – who can count this ruling as yet another loss for his office – was nevertheless bullish in defeat. His campaign released a statement proposing root-and-branch educational reform, "rather than just doubling down on an outdated education system constructed decades ago." His proposal was to send voters to his election website, with policy plans requiring the Texas Education Agency to allocate more cash to the less accountable private charity Teach for America, and, of course, increasing the state's dependence on charters.
However, other ranking Republicans joined the call for funding reform. Senate Education committee member and Higher Education Chair Kel Seliger, R-Amarillo, said that, legal appeal or not, he will draft legislation for the next session. "While increased funding does not necessarily equate to improvements in student performance, the current mechanism by which the funding is distributed clearly needs to be addressed."
If you want a concrete example of Texas tripping over its own feet in financing public schools, look at the recent unfunded mandate from the Texas Education Agency regarding math tests.
Education Commissioner Michael Williams told superintendents in February that eighth-grade students must have graphing calculators when they take STAAR tests in the 2014-15 school year.
That’s because the State Board of Education increased the algebra content on the exam, TEA spokeswoman Debbie Ratcliffe told The Texas Tribune.
But most eighth-grade math classes have not been issued calculators up until now, Tribune reporter Aamena Ahmed wrote. They cost more than $100 each.
Uh-oh. That means those superintendents Williams addressed in his February letter will need to come up with money for calculators.
But there’s no new money from the state for that purpose.
The latest enrollment report from the TEA says there were 366,786 students in eighth grade during the 2012-13 school year.
More to the point, 57.7 percent of them were economically disadvantaged. That’s 211,814 students who would not be able to buy their own $100 calculator.
Do the math and you see that the cost of the mandate could be as much as $21 million.
“We’ve sent millions of dollars to schools for textbooks and technology,” Ratcliffe said. Because some districts have used that money to buy tablet computers for students, TEA gave them special permission to by calculator apps and let their students used them on the STAAR tests.
Let’s assume that not every eighth grader is taking math and that some of those who are have access to those tablets with calculator apps. So the problem amounts to something less than $21 million.
And Ratcliff is correct: The state sent $749 million to districts in the 2012-13 biennium for use on textbooks and technology.
That figure increased to $810.6 million in for the current 2014-15 budget.
According to figures supplied by the Equity Center, an Austin-based organization that represents most of the state’s property-poor school districts, the “instructional materials allotment” for 2012-13 amounted to $75.43 per student.
For 2014-15, its $78.76 per student.
It doesn’t take a math genius to tell that $75.43 and $78.76 are both less than $100.
So every student who gets a required calculator from his or her school has used not only all of their own allotment on that one item but also some of what was supposed to be used for other students.
And keep in mind, those dollars are supposed to provide for all instructional materials.
It’s crucial to remember that the calculators are required for mandated state tests.
In decades of litigation over school finance in Texas, courts have established that the state constitution’s requirement that the Legislature make suitable provision for public schools means at the very least that school districts must have enough money to meet state accreditation standards.
And getting enough students to pass state tests is required for accreditation. So Texas is on thin ice with the unfunded calculator mandate.
As Ratcliffe pointed out, districts can spread their instructional materials allotment around. But when they have to take money away from things they’re already spending it on, the ice gets thinner as far as the courts are concerned.
Finally, if they must spend their own local property tax money to meet state mandates, taking away all of their discretion in how to use those dollars, the ice breaks and the system drowns. It’s unconstitutional.
Texas is already waiting on a decision in a lawsuit in which more than two-thirds of its school districts say their funding is inadequate and/or unequal. An Austin judge already agreed with them once, but he took more testimony this year.
The case is expected to go to the state Supreme Court later this year.
It’s like Texas is just looking for more trouble.
Calculator Directive for 8th-Graders Draws Concern
As the state integrates a directive that requires eighth-graders in Texas public schools to have graphing calculators forSTAAR testing, some poorer Texas school districts say that such mandates ignore the financial crunch that many districts are already facing.
In February, Texas Education AgencyCommissioner Michael Williamswrote toTexas superintendents to instruct them that they must ensure that eighth-grade students have graphing calculators for STAAR assessments, starting in the 2014-15 school year. The directive comes after the State Board of Education increased the algebra content on the exam, said Debbie Ratcliffe, a TEA spokeswoman.
While districts have provided calculators for algebra classes, most eighth-grade math classes had previously not been supplied with the calculators, which cost more than $100 each. The state will not provide extra funding for the new calculator mandate, Ratcliffe said, adding that districts receive a specific allotment for spending on instructional materials.
To provide more flexibility for school districts, the requirements were amended to include the option of substituting calculators with math applications on tablet devices. But many property-poordistricts and their advocates say that despite the options provided, resources are limited and they have other issues to consider.
“Most of the students in our school district live in poverty,” said Marcus Nelson, superintendent of the Laredo school district, where more than 90 percent of the student body iseconomically disadvantaged. "We don’t have big budgets to spend from. We are trying to buy the equipment, but we can’t ignore that it is expensive.”
In the Ysleta school district in El Paso, more than 80 percent of students are economically disadvantaged. Officials there say funding tablets or calculators won't be easy.
"We just don’t have the funds to purchase a tablet for every eighth-grade student in our district," said Patricia Ayala, the spokeswoman for the district.
As it apportions funding for calculators, Ysleta ISD is also reaching out to its high schools to contribute extra calculators to middle schools in the district. One high school has provided 60 calculators to a nearby middle school, Ayala said. The schools will also be holding morning and evening testing sessions to recycle calculator use throughout the day.
"We have limited funds, but it's not like this is a choice," Ayala said. "We need to be creative in the way we tackle this."
It’s hard for school districts with a lower tax base to buy the same instructional material as other districts, said Ray Freeman, deputy executive director of the Equity Center, which advocates for property-poor school districts.
“They’ll do what they have to do to be accredited, but it takes away money they are already spending elsewhere,” he said, adding that it creates a situation in which "schools might have to give up an optional Spanish or career technology elective, since they may not be able to fund the materials for it."
The state's overall funding system for public schools is again the target of a lawsuit, as more than two-thirds of Texas school districts are suing the state, saying the current system is inadequate and unfair.
Celina Moreno, a legislative staff attorney at the Mexican American Legal Defense and Educational Fund, which is representing property-poor school districts in the suit, said the state should address the bigger picture of school funding before considering directives like the calculator mandate.
“When the state is making such policies, they can’t be mandating things in a vacuum,” said Moreno, who added that the state should reassess funding for poor districts to satisfy such requirements. “They should be looking at whether they are also funding schools equitably.”
The TEA says that if schools can prioritize their spending, the mandate should be easier for them to comply with.
"We've sent millions of dollars to schools for textbooks and technology," Ratcliffe said, adding that many districts have taken the funding allotted to districts for instruction materials and bought tablets. "We are providing the [calculator] apps to give them a low-cost option."
Ratcliffe also said that low-funded districts many not be able to raise as much funding through local taxes, but they do receive the same amount of funding by the state for instructional materials.
Poorer school districts still shortchanged in Texas, expert says
AUSTIN — The state only slightly reduced big funding gaps between richer and poorer school districts last year, a representative for hundreds of districts told a judge Wednesday.
Wayne Pierce, executive director of the Equity Center, testified that elementary schools in wealthier districts still have an average $73,000 more per classroom to spend than schools in the state’s poorest districts.
That funding advantage exists even though the poorest 15 percent of school districts have significantly higher tax rates than the wealthiest 15 percent, Pierce said.
“The [funding] gaps remain exceedingly large,” he said. “We have an irrational system with layers of irrational funding factors.”
Pierce, a former superintendent of the Kaufman school district, also said that lawmakers reduced the average gap between higher-wealth and lower-wealth districts by only $209 per student in the current budget. There is still a gap of nearly $2,000 per student between districts at the upper and lower ends of the property wealth spectrum, he said.
The Equity Center represents low- and medium-wealth school districts. That includes 445 districts that are among the more than 600 suing the state.
State District Judge John Dietz ruled the system unconstitutional a year ago. He is holding additional hearings to determine the effect of legislative changes made since his decision. Lawmakers increased funding and scaled back high school testing.
School districts say schools still have inadequate resources and an unfair system for distributing funds. They also argue that the state has improperly limited their ability to raise enough revenue through local property taxes.
Catherine Clark, a school finance expert with the Texas Association of School Boards, said that despite funding increases, nearly 40 percent of school districts still have less money this year than they had in the 2010-11 school year. Those 408 districts include Dallas and several other North Texas districts. Combined, they educate 2.3 million students.
The Legislature slashed education funding by $5.4 billion in 2011 to help ease a state budget crunch. Lawmakers restored $3.4 billion last year.
“The funding system is leveling down at the same time that standards are being raised,” she told the judge. “The funding has not responded to the increased standards set by the state.”
The case is expected to wind up before the Texas Supreme Court later this year after Dietz issues his final decision.
Experts say state funding is creating inequitable educational environments
In Hutto, a small city in central Texas, any student who lived within a two-mile radius of school faced losing their free bussing last year. In South Texas, Premont Independent School District faced permanent closure. Instead, the basketball, football, tennis and volleyball teams were shut down for an entire year.
In school districts across the state, classroom sizes have been increasing past state-recommended teacher-student ratios.
In the last legislative session, lawmakers cut $5.4 billion from the Texas education budget. In the wake of the cuts, school districts made sacrifices in various departments while struggling to keep up with the minimum education standards set by the state.
And experts now say that unless Texas figures out how to fund education in a more equitable manner, the state is in danger of creating an increasingly inequitable educational environment.
Executive Director Wayne Pierce of the Texas Equity Center said that the inequity among Texas school districts has become significantly worse in the past seven years since the state overhauled the system in 2006.
Pierce said there is inequity because the state does not fund all children at the same level at which the more powerful districts fund students. “The Legislature’s solution to this point has been to take care of some districts at the expense of children everywhere else.”
The Premont Independent School District, in a part of the state often defined by high unemployment and poverty levels, has 582 students. The majority of students - 96 percent - are Hispanic and more than 70 percent of the student population is classified as economically disadvantaged. In 2010-11, the district was rated “academically unacceptable” by the Texas Education Agency.
After temporarily shutting down the athletic department, the district saved about $1 million. It steered some money toward renovating the high school’s moldy science labs, in order to meet state standards. Premont’s financial problems continue and risks being shut down by the TEA.
In North Texas, Allen Independent School District had a different fiscal reality. It made national headlines for opening a much publicized $60 million football stadium last August. Allen ISD was recognized by TEA as a high-performing school district in 2010-11. It has a student population that is almost 60 percent white. More than 16 percent of students are classified as “economically disadvantaged.”
Allen ISD’s successes are tied to the financial support it enjoys from the community it serves. “It’s not the result of the state giving us more,” said Deputy Superintendent Mark Tarpley. “It’s the result of our local taxpayers taking on more of the burden and being willing to do that.”
Texas currently funds public education through a series of formulas that are mostly defined by a district’s property tax revenue, average daily attendance rates and programming costs.
Officials in the governor’s office said that despite the last round of cuts, “the fiscal health of Texas is strong.”
“Over the last decade, we have adhered to the conservative fiscal principles of low taxes, fair regulations and living within our means, while still pumping billions into public education,” said Josh Havens, a spokesman for Gov. Rick Perry. “In fact, state funding for education has risen three times more than enrollment over the last ten years.”
But Chandra Villanueva, a policy analyst for the Center for Public Policy Priorities said this statement is inaccurate.
The governor’s office said there was a 68 percent increase in the amount of funding set aside for education for the fiscal years between 2003 and 2013, citing a state budget board report. There is expected to be a total 19.6 percent increase in student enrollment in that same time period.
Villanueva said the governor’s office did not adjust for inflation when calculating whether enrollment growth was funded for the past 10 years.
Bill Hammond, the president and CEO of the Texas Association of Business, said that last year, for the first time, the state did not fund enrollment growth. “Over the last 10 or 12 years, funding for education has gone way up beyond inflation and the number of students,” Hammond said.
Hammond said that while the state didn’t fund growth last session, a lot of additional money was put in “beyond the cost increases associated with inflation or the growth of student population.”
Because of funding cuts, some districts had to raise taxes or seek donations to keep extracurricular programs, extra school supplies, free transportation and other options available to students. Schools districts with mostly poor and minority students often can’t come up with the money.
“It is simply an issue of economics,” said Josh Sanderson, a lobbyist with the Association of Texas Professional Educators. “Schools with high concentrations of low socioeconomic students are underfunded in general because we’re not putting in the resources. We’re not investing what we need to in order to get them up to the standards that they deserve.”
Looking to the future
The state education cuts have led to bigger class sizes, less mentoring and fewer remedial classes for kids who need help with academics. It also has meant some districts have charged for, or eliminated, normally free services like busing. Hutto Independent School District, outside of Austin, faced that dilemma until residents recently voted for local tax increases.
Some critics say the entire state educational system, including how it is funded, needs an overhaul.
“These are real-world issues that parents and students and professionals feel in their districts. These aren’t things concocted by politicians and bureaucrats in Austin,” said Sanderson.
Mike Cline, the Associate Director of the Hobby Center for the Study of Texas, a research group at Rice University said that state has “a system that’s built in the ‘50s that had a different community that it served.”
“Now you have a much more diverse community: Hispanics, African-Americans that may have different needs than what the system was designed for,” he said.
“Institutional segregation is no longer legal,” Cline said. “But historical discrimination helped shape neighborhoods and current income differences also shape where people live."
Under the so-called “Robin Hood” or “share the wealth” plan, a district is deemed “property rich” or “property poor” by certain formulas that have been in effect since 2009. Tax funds are moved, or “recaptured,” from wealthier districts to poorer districts through monthly payments based on each district’s needs.
In the 2012-13 school year, the TEA reports there were 374 “property rich” school districts and 638 “property poor” school districts in Texas.
Austin Independent School District, for example, is classified as “property rich” and has the highest recapture amount of any school district in Texas, making up 12 percent of all recaptured funds, or approximately $132.5 million. But of Austin ISD’s more than 86,000 students, 64 percent are economically disadvantaged – and 60.5 percent are Hispanic.
Austin ISD’s school officials say they had to shift money in order to keep some programs afloat – programs designed to prevent economically disadvantaged, often minority, students from falling behind.
“If you don’t provide the funding to allow every student - no matter what their personal circumstance is... to partake then there’s more that needs to be done,” said Edna Butts with Austin ISD’s general counsel office.
This year, the latest in a long history of Texas finance cases went to court in Austin. About 600 Texas school districts alleged that funding cuts and new standardized tests violated the Texas constitution. The case lasted for months. In February, State District Judge John Dietz ruled that the funding system was inadequate, inequitable and in violation of a ban on a statewide property tax.
Lawmakers are still awaiting a final written ruling from Dietz, and the state is expected to appeal to the Texas Supreme Court. If the high court affirms Dietz' ruling, there could be a special session on school funding in 2014.
The Texas House wants to give school districts about $3 billion over the next two years, making up some of the $5.4 billion that was cut in 2011. The Senate has voted to restore about $1.5 billion to schools. But it is expected to increase that in talks with the House before a final draft is hashed out and the Legislature adjourns.
Lawmakers are awaiting a final ruling from a state judge who in February declared the current school finance system unconstitutional. The state is expected to appeal to the Texas Supreme Court. Depending on its ruling, lawmakers could be called back to work on school funding in 2014.
Texas Education Commissioner Michael Williams said teachers are key.
“We know that great teachers drive great learning, and that the most significant asset to academic achievement, irrespective of income and irrespective of race, is having a great teacher providing instructions to students,” he said. “And that’s the challenge that I think nears toward us closing the racial achievement gap.”
Sanderson is not convinced. He said Texas needs to make major changes in how it funds education.
“This isn’t throwing money at a problem. This is investing in something everybody in the state holds dear,” he said. “The business community knows we have to have a well-educated career-ready populous. The only way we do that is by providing the resources necessary in the public school system... that’s why five million students go to school every day.”
Judge: Texas School Finance System Unconstitutional
It's been months in the coming, but when Judge John Dietz finally released his ruling yesterday on the Texas public school finance system, it was no surprise to anyone: The current system of "Robin Hood" recapture is unconstitutional on multiple levels, create a de facto statewide property tax, and is underfunded by the legislature.
In a short press release, Texas Equity Centersummed up his ruling plainly.
"The Texas school finance system is: 1. Inequitable and inefficient 2. Inadequate and unsuitable 3. Statewide de facto property tax.
This is tremendous win for Texas Taxpayer & Student Fairness Coalition, who represents 443 school districts and over 1.3 million school children statewide, who won on all major contingents of their case."
Dietz got similar plaudits from the man most qualified to do so: Center for Public Policy Priorities Executive Director F. Scott McCowan who, in his previous career as a judge, ruled in a previous case against an earlier Texas school finance system, Edgewood v Kirby.
The district court’s strong ruling confirms what we already know. We aren’t investing enough in education. We aren’t dividing what we do spend fairly between school districts. And the state is forcing local property taxes up because it won’t pay its share of the cost of education.
"The Legislature should act now rather than wait for the Supreme Court to affirm the district court. Kids are suffering from insufficient resources unfairly divided. There is no good reason to delay fixing the problem."
Texas AFT President Linda Bridges wrote that Dietz ruling shows "the state’s system of school funding is unconstitutional on multiple grounds."
"It is inadequate, providing insufficient funding to school districts to meet state achievement targets. It is inequitable, failing to distribute school aid in a manner that gives all students a fair chance to succeed regardless of local property wealth. And it leaves rich and poor districts alike with no meaningful discretion over their local tax rates as they struggle to raise the funds to try to meet state mandates.
"Today’s ruling should spur the legislature to do what it ought to be doing anyway – using the state’s resurgent revenue to restore school funding that was cut severely last session, and reforming the school-finance system to satisfy constitutional requirements. The inevitable appeal that the state’s lawyers will pursue in this case must not become an excuse for legislative inertia. The state needs to invest more in public education immediately, because the kids can’t wait.
Former Eanes ISD Trustee and now House Appropriations Committee Member Rep. Donna Howard, D-Austin, wrote that "our children's future should not be placed on hold while the legislature awaits instructions from the courts." She echoed Bridges' belief that the legislature needs to act now.
"As we await the inevitable appeal to the Texas Supreme Court, lawmakers should act now to begin addressing some of Justice Dietz's concerns. We can reinstitute programs that are known to improve student outcomes, such as full day Pre-K and the Student Success Initiative, and restore funding levels to amounts that were in place before last session's cuts."
Across the rotunda in the upper chamber, Sen. Judith Zaffirini, D-Laredo (and parts of Austin now), echoed Howard's sentiment and set specific financial targets:
"Today's decision also reflects the need to fund our public schools more adequately and fairly. To remedy the situation immediately, legislators should restore the $5 billion cuts from public education in 2011.
"I voted against the appropriations bill last session, largely because it didn't reflect our best effort. This year's budget should be better for education and for health and human services."
And even though (much to the chagrin of Democrats) Sen. Wendy Davis, D-Fort Worth, has been exiled from the Senate Public Ed committee, she still threw some punches. She goes further than either Zaffirini or Howard, saying the Legislature has no choice but to act now.
"Today's decision by Judge John Dietz should serve as a wakeup call to Gov. Perry and our legislative leaders. His ruling that our schools are not adequately funded is an indictment of the current leadership's failure to safeguard our children's education and Texas' economic future. Judge Dietz's decision echoes concerns that I have heard from parents and teachers in my district and across the state. As a result of his ruling I believe the Legislature now has a constitutional obligation this session to restore the cuts it made to our schools."
Meanwhile, the right was desperately trying to make lemonade out of lemons, and none more so than Bill Hammond, chair of the Texas Association of Business and the self-appointed voice of the business community when it comes to public schools. In a startling fit of chutpzah, Hammond said that he was "pleased Judge Dietz agrees with me that our schools are not producing enough career and college ready students." However, he quickly switched tack: For him, and the rest of the right, it seems that Dietz wasn't telling them that the school system was underfunded (which he pretty clearly did). Instead, what they heard was an argument for more efficiency, which actually means competition, which really means charters and vouchers.
Judge Dietz, although he didn’t rule specifically on our efficiency argument, apparently agrees that efficiency is an issue while ruling the entire system unconstitutional. I am pleased that Judge Dietz feels that the efficiency argument is something that the legislature should consider, and we will be there to ensure that lawmakers do consider that argument if and when a new school finance system is considered in the future.”
So what now? Appeals, a near-inevitable special session next year (post-primary, natch) and an overwhelming feeling of dread that we've been here before, and lawmakers have promised a real fix before.
A state district court in Texas has ruled that the way the state funds its public schools is unconstitutional, both because the money is insufficient and because it is not distributed fairly.
After a 12-week trial, Judge John Dietz took only moments to agree with schools that the current funding mechanism violates the state Constitution.
"It was a great relief," said Wayne Pierce, executive director of the Equity Center, an organization of some 675 of the school districts arguing that the system is "hopelessly broken."
Texas does not have a state income tax and relies on local property taxes to fund schools. A so-called "Robin Hood" scheme, enacted in 1993 as a result of an earlier lawsuit, requires schools with more resources to share with those in poorer districts.
The current lawsuits were filed by districts in both wealthy and poor areas.
Attorney Mark Trachtenberg, who represented nearly 90 school districts in the Texas School Coalition, said that as education funding continues to be cut, even richer schools are unable to meet the increasing academic standards set by the state. In the past two years, money for schools has been slashed by $5.4 billion.
"The former lieutenant governor [Bill Ratliff] said it best: Essentially, school districts are being asked to make bricks without straw," said Trachtenberg, whose coalition includes mostly richer districts. "Schools need money for smaller class sizes, particularly in the earlier grades.
"They need money for remediation in the form of tutoring or after-school programs. They need money to retain and hire quality teachers. They need money to have full-day pre-K programming. These things all cost money."
Advocates say the state has more than enough money in its rainy-day fund to start restoring some of that funding. But Texas state Attorney General Greg Abbott has argued that schools already have adequate funding but are mismanaging it.
Michael Sullivan, with the anti-tax lobbying group Empower Texans, says he agrees.
"I would actually argue that we need more money going into the classroom," Sullivan says, "but I am not so convinced that is the same thing as needing more money period."
The state Constitution also requires schools to be run efficiently, and any fix, Sullivan says, needs to start there.
"We see school districts building a multimillion-dollar football stadium; we've got math teachers being fired while superintendents are taking home record salaries," he says. "We have a superintendent with a press secretary making more than the White House press secretary.
"You know, you have to scratch your head and say, 'Wait and minute — there are screwy priorities,' " he says. "Let's redirect those dollars into the classroom."
An appeal of Judge Dietz's decision is all but certain, and it could be years before the case is ultimately resolved by the Texas Supreme Court.
Plaintiffs such as Wayne Pierce say lawmakers should not wait to act.
"The longer you wait before you fix the system that funds [kids'] education, the more you hurt them," Pierce says. "And if we have to wait two more years before this goes through the full process, there are sophomores in high school right now that will not benefit one day."
Some state lawmakers had already begun making contingency plans, setting aside some money in case they need to increase funding. But even after Monday's ruling, Republican Sen. Kel Seliger — who sits on the state Senate Finance and Education committees — says the debate on the nature of the fix will continue.
"The judge said [the current system] was unconstitutional, but he did not prescribe any remedies," Seliger says. "We're just going to have to come up with a remedy that may not be a preferred one but that it is constitutional.
"And we've been told by the courts before that [we] were going to have to go back to the drawing board. This is pretty much the same situation."
Indeed, this was the sixth lawsuit challenging school funding in Texas since the 1980s; many doubt it will finally end the battle. As one advocate put it, "We've seen lawsuits filed just about every five years, you can set your calendar to it."
Oil-boom wealth a mixed blessing for Eagle Ford's school districts
Million-dollar homes and leafy boulevards once were the surest sign that you lived in a rich Texas school district.
Now add drilling rigs, dusty roads and overnight trailer parks.
This year, eight rural districts flush with money from the Eagle Ford Shale energy boom were added to the “wealthy” category for the first time, meaning they might have to give up some of their local property tax revenue.
“I've lived here for 40 years, and we've been poor for 38 of those years,” Carrizo Springs ISD Superintendent Deborah Dobie said.
About a third of the 23 districts the Texas Education Agency added to its annual list of property-wealthy districts are on the Eagle Ford, an oil-and-gas-rich shale formation stretching through a dozen counties south and east of San Antonio.
A new extraction technique called hydraulic fracturing has amped up the region's economy — and drastically altered its tax base, thanks in large part to taxable mineral rights.
In two years, Dobie said, property values in her district have increased from $441 million to almost $2.5 billion.
Under the Texas system of sharing rich districts' tax money with poor ones to help balance disparities in funding, she expects to deliver $8 million or $9 million to the state next year, based on this year's property values.
Next door in tiny Cotulla Independent School District, at the epicenter of the Eagle Ford activity, property values have shot up from $534 million in 2010 to $2.3 billion this year.
It's more than enough to propel the 1,200-student district into the ranks of the property wealthy, according to a state formula that factors in student attendance.
But Cotulla Superintendent Jack Seals said the district's windfall isn't worry-free.
An influx of oilfield workers has squeezed the housing market, and three school employees, including the district's technology director, now live in trailers on district property.
And even with higher tax revenues, the district can't afford to pay prevailing boomtown wages, so hiring in-demand workers such as custodians and cafeteria employees has been tough.
“It's really hard to try to compete with the private sector at this time because the oil field wages are skewing the competition rate,” Seals said.
This year, the district expects to return about $900,000 to the state in what is known as a recapture payment.
“Next year is when the recapture is going to hit us like a hammer,” said Seals, who expects to dip into the district's savings to send the state a payment as high as $15 million in 2013.
School districts such as Cotulla are pulling in local tax revenue like never before, but state funding is based largely on 2006 revenue figures, and much of the new increase is subject to recapture.
“If (property values) flatten out at $2.3 billion, we're going to have less than we do now to run our schools,” Seals said.
Like many districts on the Eagle Ford Shale, Cotulla has joined a lawsuit against the state over education funding, organized by the Equity Center, which traditionally advocates for poorer districts.
Wayne Pierce, executive director of the Equity Center, said scenarios such as the one Seals described mean that newly wealthy districts are “still in the boat with the property-poor districts.”
Another issue comes from fluctuating property values, said Dan Casey, a partner with school finance experts Moak, Casey and Associates. Because the state uses prior-year values to determine the amount wealthy districts are required to return, property values can plummet but districts still will be on the hook for such payments.
“The main problem you get is these guys that shoot right up and then shoot back down,” he said. “As a result, you tend to get hit harder with recapture costs.”
Not all property-wealthy districts are subject to recapture because the formula takes the size of a district's student body into account as well.
At least two of the Eagle Ford districts, Flatonia ISD and Jourdanton ISD, expect to be removed from the ranks of the newly wealthy because they educate students from other districts without charging tuition, which changes the outcome of the state's formula.
Karnes City ISD Superintendent Jeanette Winn said she's not sure yet whether her district will have to pay recapture.
The increasing property values are a “temporary boon” that has allowed the district to spend more on building improvements, she said.
Dobie, her counterpart in Carrizo Springs, is planning to roll millions of dollars in excess revenue into next year's budget, in preparation for a hefty recapture payment.
But the district will still have to dip into its savings to cover the expected cost.
“It will be difficult,” Dobie said. “But overall, in general, it's a blessing. Anyone that wants to work in Dimmit County can work, and I'm very grateful for that.”
During the legislative session earlier this year, David Thompson received a message from a Republican lawmaker on the floor of the House.
“Please sue us soon,” it read.
The veteran school finance lawyer told the story to several dozen school leaders last weekend as he explained to them why he is poised to do just that — file litigation against the state over the way it funds its public schools. The involvement of courts, he said, could help provide political cover for lawmakers to make better policy.
Though the prospect of school finance litigation arose even before the Legislature removed $4 billion in funding it owed Texas public schools and passed last-minute legislation distributing the cuts in a way that another school finance expert likened to a shotgun wedding, the details of such lawsuits are just now taking shape.
At least two groups, one led by Thompson and another by the Equity Center, a nonprofit school finance lobbying and research organization, have been gathering plaintiffs for cases they expect to file this fall taking aim at what they say is the state’s crippled public education system. The lawsuits will be the latest in a longstanding history of court intervention.
Since 1970, there have been seven major school finance lawsuits in the state. And Texas school districts are far from alone in turning to the courts to help sort out funding issues. Eleven states, including Colorado, Connecticut and California currently have similar suits in progress and just five have never had a school finance legal challenge, according to the National Education Access Network, an organization that tracks school finance litigation.
But as the prevalence of lawsuits demonstrates, there are limits to the judiciary’s ability to solve school finance problems. Even if a court rules that Texas’ system is unconstitutional, the responsibility will still ultimately lie with the Legislature to fix it.
“It takes a lot of leadership in the Legislature to solve a problem of inequity without being forced to by the courts, because almost every district is richer than some other district,” said state Rep. Scott Hochberg, D-Houston.
Legal wrangling over school finance tends to hinge on three issues: equity, adequacy and what’s called “meaningful discretion.” The Texas Constitution, like those of other states, requires that the state provide efficient and adequate funding for its public schools. It also says that school districts must have discretion in how they spend the money they receive from property taxes.
The Equity Center’s lawsuit will focus on fairness, attacking the target revenue system established in 2006 when lawmakers reduced the property tax rate and guaranteed that districts would get no less than the amount they received per student at that time. That stopgap has since become permanent, resulting in an arbitrary funding scheme in which neighboring school districts can have as much as a $7,000 difference in state spending per student — and, the Equity Center will argue, is wildly inefficient.
Many of the state’s 1,030 school districts, like its largest, Houston ISD, whose school board will take up the question at its meeting on Oct. 13, have yet to decide whether they will join a suit. But as of Tuesday, 139 districts — a mix of suburban, rural and inner-city schools of varying sizes, though they are primarily low- to middle-property wealth — have joined the Equity Center’s coalition of schools. In addition to schools, Executive Director Wayne Pierce said they also eventually plan to include taxpayers like business owners and parents in the suit as well.
Historically, most school finance lawsuits have been over equity issues, said John Augenblick, the president of a Denver-based education consulting company and former director of the Education Finance Center at the Education Commission of the States. But as states and then the federal government under the No Child Left Behind Act began ratcheting up accountability measures, he said, schools began challenging states on the questions of adequacy.
Thompson's group will focus primarily on adequacy and property tax issues, arguing that not only has the state failed to dedicate enough money to public education for schools to meet increasingly rigorous accountability standards, but that in doing so, it has not given local districts enough choice in how to spend or whether to raise property taxes — in effect, instituting an unconstitutional statewide property tax.
“Educational standards are continuing to go up, but the revenue is flat-lined — and in this session it's gone down,” said Rickey Dailey, a spokesman for the Texas School Coalition, a group that represents “Chapter 41,” or property wealthy districts that send money back to the state through Robin Hood laws.
This isn’t the first time school districts have challenged the state on adequacy issues. In the 2005 West Orange-Cove Consolidated ISD v. Neeley suit, the Texas Supreme Court sided with the state on the question of adequacy but left the door open for future challenges. The decision indicated, Hochberg said, that “the state had essentially walked up to the edge of the cliff but hadn’t stepped over it yet.”
“Districts now have less money for students than they had at that point because of the cuts made by this Legislature, and the standards are higher,” he said. “So it would seem like you wouldn't have to prove much more than that.”
It’s unclear how the court might resolve an adequacy issue because there’s no precedent for it in public education, Hochberg said. But in other areas, like mental health services, he said, courts have given specific direction to the state that it must spend more money.
In Colorado, a trial has just concluded for the state’s first school funding suit based on adequacy. Augenblick said he did not have a sense for how the courts there may rule. In previous lawsuits based on equity issues, he said, they have largely found against the plaintiffs.
But he cautioned against looking at how other state courts have ruled to shed light on the situation in Texas — or anywhere else.
“Just because it sounds logical doesn't mean that you can predict the outcome,” he said. “The outcome depends on human beings, judges interpreting the data that they are presented, the language and history of that language. You could still have an outcome that says it is perfectly constitutional not to provide as much money as the plaintiffs think necessary.”
Facing State Cuts, Will Schools Raise Local Taxes?
Sen. Steve Ogden, R-Bryan, is the latest lawmaker to say it: A $4 billion shortfall in state financing does not have to mean teachers lose their jobs.
At the end of the legislative session, Ogden, told his colleagues in the Senate that school districts could spend their reserve money. They could “tighten their belts in other areas,” he said. Or they could pursue what he called “a good exercise in democracy” and ask voters to raise local taxes.
Across the state, school districts are considering the last option. But will the same public that sent lawmakers to Austin in November with an overwhelming no-new-taxes imperative accept paying more locally to preserve programs and jobs?
The local portion of public education financing in Texas comes from property taxes: maintenance-and-operations rates set by school boards and, if applicable, a facilities bond interest rate. In 2006, as part of an overhaul of the state’s school finance system, the Legislature voted to reduce property tax rates by a third, setting the majority of districts’ maintenance-and-operations rates at $1 per $100 of property value, with a cap of $1.17. Any district that wants to levy a tax rate higher than $1.04 must hold a “tax ratification election.”
About 20 percent of districts have already reached the $1.17 limit, according to data from the Equity Center, a school finance lobbying and research organization.
Most districts will probably set their budgets in August, but will begin finalizing expenses as soon know the exact details of the Legislature’s new school finance plan.
While it is too soon to tell whether the reduction in state financing will result in a wave of property tax increases, there is little doubt that some districts will try to raise their levies.
“It’s not a matter of if we are going to have a TRE — it’s a matter of when,” said Joe Smith, a former superintendent who runs texasisd.com, a clearinghouse of news and information for school officials.
Catherine Clark, an associate executive director at the Texas Association of School Boards, said her organization, which provides legal services to school boards, has received fewer inquiries about tax ratification elections than it had at this time last year. She said that districts were most likely still awaiting the final school finance plan and July property value appraisals.
A handful of districts across the state have already decided to take the plunge.
Keller Independent School District, a district with an enrollment of about 31,000 located in a suburb of Fort Worth, called an election for June 18 to raise its rates to a maximum $1.17 from $1.04. Mark Youngs, a deputy superintendent for the district, said the increase was intended “purely to replace lost state dollars.” He said the board wanted to hold the election in June so that if it failed, the district could lay off workers in time to find jobs elsewhere before the school year began.
Districts often hold elections after Labor Day “thinking that the good feelings of being back in school would increase the likelihood of passage,” Youngs said. “But then you are laying off in September and October, and districts have already staffed up.”
To successfully push a tax increase, districts usually need to demonstrate they have explored all other options. Coping with $4 billion less in state financing will help them do that. Residents of Canutillo ISD, a district of 6,000 in El Paso County, voted for a 13-cent increase on May 14, after the board tried and failed twice before in previous years.
Gustavo Reveles, a spokesman for the district, said news of the state budget cuts has shifted the mood of the community.
“It became apparent that the TRE would be more than a luxury,” he said. “It would be a necessity.”
The Texas public school finance system, responsible for underwriting the education of the nation’s second-largest student population, is notoriously byzantine. Parsing the jargon alone — golden and copper pennies? hold harmless? recapture? — can prove a hopelessly frustrating task.
But finding a way through the labyrinth of school finance is more important now than ever as lawmakers deliberate an education budget that could, if the House has its way, leave public schools $7.8 billion short in funding. And as state Sen. Florence Shapiro, R-Plano, reminded members of the Senate Finance Committee when they passed their own education budget last week — with still staggering numbers that are $4 billion more than those from the lower chamber — any funding for education depends the passage of a new school finance bill.
In the House, state Reps. Scott Hochberg, D-Houston, and Rob Eissler, R-The Woodlands, have introduced separate legislation outlining reforms. Shapiro, who chairs the Senate Education Committee, and state Sen. Kel Seliger, R-Amarillo, have each said they are working on proposals.
Here’s our layman’s guide to figuring out the current system, compiled with the help of experts at the Texas Taxpayers and Research Association, the Equity Center and the Texas Education Agency.
The state’s 1,030 traditional school districts operate with a combination of federal, local and state revenue. In the 2008-09 school year, the federal government paid $4.7 billion, the thinnest slice of the pie at 10 percent. At $20 billion, the state paid 42.9 percent of the total funding for schools, and local districts paid 47.1 percent, $22.2 billion (the state’s portion includes money “recaptured” from local property taxes; more on that later).
Most federal money comes through Title I, the law intended to help districts educate economically disadvantaged students. That money is distributed based on the number of students who qualify for free and reduced meal plans — and almost all districts in the state receive some amount of Title I funds. They can also receive specialized federal grants, including those for students with disabilities, English-language learners, preschool programs, migrant students and vocational education.
Texas allocates most state funding for schools through a mechanism called the Foundation School Program, which was created in 1949 to distribute money from the state's Available School Fund. Now the program distributes operating funds to school districts via two streams that each contain a local and state component. A portion of state facilities funds also comes from the Foundation School Program. The Available School Fund contains the proceeds from fuel taxes and earnings from something called the Permanent School Fund, which was established in 1876 and is made up of revenue from land sales and leases on offshore oil lands and other mineral holdings. It also finances instructional materials and technology for schools outside of the Foundation School Program.
According to the Texas Taxpayers and Research Association, in the 2010-11 biennium, about $7.5 billion in state education funds came from the Available School Fund, lottery proceeds, recaptured property taxes, and taxes on oil and natural gas, franchises, tobacco, and used car sales. Additional money from the state’s general revenue accounts made up the rest of the state’s roughly $40 billion share. Over the last two years, the state has also used federal stimulus money to supplant state funding to the Foundation School Program.
Through the Foundation School Program, the state determines how much money each district gets for operations through two formulas: “Tier 1,” which constitutes the bulk of a district’s funding, and “Tier 2,” so-called enrichment funding.
The Tier 1 formula determines a district’s “entitlement” — the total cost a district bears in meeting basic education requirements for its students. The entitlement is calculated using the number of students who make up a district’s average daily attendance, adjusted by factors like the district’s size, the number of students instructed in areas like English-language training, gifted and talented classes, and special education programs, and its regional “cost of education” index. (That index, assigned to districts in 1991, is based on size, teacher salaries in neighboring districts, and percentage of low-income students there in 1989-90. It has not been updated since then.)
A district’s portion of its Tier 1 entitlement is calculated by subtracting whatever amount of money a $1 tax rate raises from the taxable property within its borders. The breakdown between state and local funding can vary widely from district to district. For example, if a district’s entitlement is $100 million, and the $1 tax rate raises $43 million, the state will chip in $57 million. For a district with lower property values, that local number could be $10 million, and the state’s portion could be $90 million.
If a district happens to exceed its entitlement with the local money levied by its dollar tax rate, the state can “recapture” those extra funds. Recapture, also referred to as “Chapter 41” or “Robin Hood,” requires property wealthy districts to share their local tax revenue with the state to ensure that all public schools in Texas receive equitable funding.
The Tier 2 formula depends on the famed “golden” and “copper” pennies. It uses calculations based on a district’s “compressed tax rate,” which the Legislature created in 2006 when it reduced maintenance and operation property taxes by a third. Most districts, which were taxing at $1.50 in 2005, have a compressed tax rate of $1 (that’s per $100 of property value).
The state calculates its share of Tier 2 funding based on each “penny” a district chooses to tax above its compressed tax rate (which, for simplicity’s sake, we’ll assume is $1, but can differ from district to district and ranges from $0.64 to $1.09). The law caps each district’s maintenance and operations property tax rate at $1.17 and requires districts to hold elections to tax more than 4 cents higher than the compressed rate. The first six pennies a district levies above a dollar are not subject to recapture — thus they are called “golden.”
For equity purposes, the state guarantees every school district the same amount of revenue that the Austin Independent School District raises with a penny of tax rate — which in 2008-09 was about $60 per penny per student. If a district is unable to raise that amount locally, then the state fills in the rest. For those first six pennies above the compressed tax, any amount a district raises above $60 is protected from recapture.
Any money a district raises with pennies seven through 17 — so-called “copper pennies” — is subject to recapture. If a district raises more than $31.95 of revenue per copper penny, that overage goes back to the state. If it fails to raise that amount, the state will supplement its funding until it gets to that $31.95 level.
After both the state and districts have paid their part through the formulas, what’s called “target revenue” comes in. In 2006, when the Legislature reduced the property tax rate, the state guaranteed that districts would get no less than the amount they received per student at that time. They would be "held harmless" against losing any money because of changes by the Legislature. If after both the Tier 1 and Tier 2 formulas are run, a district ends up with less than its “target revenue” number, the state makes up the difference — something it does for about 900 districts, according to the Texas Taxpayers and Research Association.
Last session, the Legislature voted to give districts another $120 per weighted student to create a new target revenue number in response to concern from districts that the 2006 formulas did not give them enough money to operate at current costs. The state aid that funds up to the target revenue number is what lawmakers call “target revenue hold harmless” funding — because, in essence, the state is holding a district “harmless” to a certain revenue level because it is not letting them drop below it.
What additional layers lawmakers will add with changes to the system this session is anyone’s guess, says Sheryl Pace, senior analyst at the Texas Taxpayers and Research Association. They could punt, fixing the current system by passing a bill that’s simply a vehicle for distributing blanket cuts across school districts. They could change elements in the funding formulas to redirect more money to poorer districts. Or they could scrap the system entirely and move to a block grant per student.
“The options are pretty much endless of what they could try to do,” Pace says.
Texas Lawmakers Look to Cut Texas Education Budget
Figuring out whether a school district spends money efficiently is hard. Variables like student population, ethnicity, income level and even district geography all figure in the answer. Allen Spelce, a spokesman for Texas Comptroller Susan Combs, says lawmakers soon will have a better picture.
"In 2009 the Legislature directed the comptroller's office to develop a method to compare school districts on a level playing field," Spelce says, "and to determine which districts and campuses allocate their financial resources in a manor that contributes to high academic achievement and cost-effective operations."
The study, to be released next week, will show how much bang schools and districts are getting for the education buck, and it should have enough detail that lawmakers can see what's working and what isn't in all districts — no matter how big or small, rural or urban. The report will be one of the main factors lawmakers use as they decide what has to be cut from the budget. "Where we get into trouble with efficiency is when you have a state system that's as inefficient as the current one is," says Ray Freeman, deputy executive director of the Equity Center, a school finance think tank. "And then you want to tell school districts they need to be more efficient."
Freeman believes the inefficiency is at the state level because the per-student funding amount varies wildly from district to district. Instead, he says, that pay scale should be made uniform, and then it will be easier to figure out which districts are being efficient. Freeman also worries whether all this talk of efficiency is just code for budget cuts — like not giving schools extra money to educate the thousands of new students who have moved to Texas in the last two years.
"The new students are going to be there regardless," he says, "and the school district's got to educate them. So it's essentially a budget cut if they don't recognize the fact that we're going to have thousands of new students to educate in the state."
The lawmakers who will write the state's education budget have already said they're working on a new school finance system, one that might provide funds for all those new students. But in a year of efficiencies and budget cuts, no one expects it to be much.