Volume 2, Number 2 Spring 2012
InDepth Understanding Texas School Finance
Published Quarterly
State Funding System Must Share Blame for Loss of Accreditation & Forced Closures The Premont community is fighting for the life of its local school district, facing short deadlines set by the Texas Education Agency on full payment of a $400,000 debt and completion of two fullyfunctional science labs at the high school, as well as a host of other finance-intensive directives.
This is the case in two Texas districts this year: North Forest ISD, a school of about 6,300 students just north of Houston, and Premont ISD in rural South Texas, with about 600 students. Looking beyond the clear necessity of all school districts meeting appropriate academic and fiscal standards, it is equally clear that another extremely important point is being overlooked: The state school funding system has persistently funded both of these troubled districts at very low levels in comparison to how the same system funds many other districts.
Ironically, they are fighting this battle under the weight of the state legislature’s 2011 action to arbitrarily cut the district’s funding by more than $260,000—instead of, for instance, cutting a 19-year-old wealth hold-harmless funding entitlement for high-funded districts that was scheduled to go away in 2000. (Instead of eliminating wealth hold-harmless, the Legislature repeatedly extended the deadline until 1999, when it made the entitlement permanent and actually enhanced it.)
This year, our estimates show that, when ranked by district M&O yield, the state funding system funds nearly two-thirds of districts at a higher yield than it funds North Forest ISD. The same system funds all but 29 districts at a higher yield than Premont ISD. That puts Premont in the bottom 3% of 1,024 districts!
Losing the local school is devastating to a community. In most instances, the school is the center of the community, as well as its largest employer. It is the hub of local economics; a source of community pride.
In fact, if Premont ISD were funded at the state average (see table) just for the past two years, it would have an additional $1,327,000 to pay the $400,000 debt, build first-class science labs, remediate mold damage, and the other facility-related corrections mandated by TEA. (And, to be fair, that funding disadvantage has been going on for much longer than just the last two years.
Occasionally, though, a school encounters academic or financial trouble that results in requirements being set by TEA that must be met to full-measure by the district to avoid loss of accreditation, closure, and subsequent annexation to a neighboring district.
(continued on page 2) Increased state revenue, if funded at only the state average yield1 Premont ISD North Forest ISD
State and local M&O revenue per penny of property tax rate per student (WADA)
1
WADA The Heck?!?
2010-11
2011-12
Total Gain
$463,000
$864,000
$1,327,000
Need to know what WADA and other school finance terms mean? Check out our helpful School
$4,383,000
$4,029,000
$8,412,00
Finance Glossary: www.equitycenter.org
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State Funding System Must Share Blame (continued from page 1)
The TEA/Premont ISD agreement also requires Premont to “hire and retain teachers that meet requirements related to certification and highly qualified status.” If the state funded Premont at the average yield it routinely funds all districts, the district would have about $33,000 more per typical elementary classroom of 22 children every year, from here on out! That could certainly go a long way towards hiring and retaining teachers that meet TEA’s standards.
Here is the point: Before a community is forced by the state to give up its local school, shouldn’t the state at least fund the district at the state average to give it the resources it needs to right itself? This isn’t “throwing money at the problem.” No, it fits in the category of giving a district that is drowning the same resources and the same chance it already gives to other districts. If that’s “throwing money at the problem,” (as some will surely say) then Heaven only knows what the current state-sanctioned funding levels -- which give double the money to some districts not even in danger of failing -- should be called.
Similarly, North Forest ISD would have had an additional $8.4 million over the past two years at just the state average yield. This year, that would amount to about $14,000 per classroom of 22 children. Enough money to make a real difference.
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Death by a Thousand Cuts Consolidated into a Single Stab Wound This derailing of any promise of a fairer system after WOC II did, however, have the bright side of combining several inequities into a single amount per-student that allowed for district-to-district comparisons instead of generalized averages of groups of districts. It was at this point, districts around the state became super-aware of how poorly, or how well, they were funded compared to others. This has brought about a sea change of attitude.
In 2006, following the West Orange-Cove (WOC 2) school finance litigation, the state made a few changes to the mechanics of the Texas school funding system that, potentially, could have improved the equity in the system over time. In order to circumvent that and maintain its propensity for inefficiently funding some districts at much higher levels than others for reasons not related to cost, the state introduced the Target Revenue Hold-Harmless (TRHH) concept.
As the structural deficit built into the state’s revenue system in 2006 began to grow, the economy began to decline. As more and more students with greater and greater educational needs began to enroll, accountability requirements dramatically increased. As state funding cratered in the 2011 legislative session with the state cutting $2 billion from the regular program allotment in the Tier 1 basic program for this school year, the arbitrary funding advantages of privileged districts became more and more clear. The incontrovertible fact that the disproportionate distribution of funding deprives most children of their access to a fair share of the limited resources the state system makes available for public education also became clear.
TRHH, arguably the most serious departure from an efficient funding system since the time of the Edgewood litigation in the late 1980s through the mid-1990s, is a scheme in which each district’s prior M&O funding level per student (WADA) was calculated and used as a hold-harmless funding level. If a district’s formula (cost-based) funding for any year fell below its TRHH, then the district was funded at the higher TRHH level. As it turned out, TRHH became inefficiency on steroids. For one thing, it was a hold-harmless based on the greater of three funding scenarios, two of which would hold districts “harmless” at a funding level they never achieved under a funding system that never existed in the year from which data elements were drawn.
Here are a few more of the many ways the state system cheats Texas children: • Across-the-board state funding based on number of employees
• 19-year-old Wealth Hold-Harmless • Choice of 3 hold-harmlessess for Target Revenue
• Countywide School Equalization tax receipts
• Choice of 2 Per Capita amounts in wealthy districts’ Target Revenue
• Comptroller Property value study fails to include minerals and industrial property
• Efficiency Credits
• No recapture on golden pennies
• Early Agreement Credits
• Access to golden pennies below $1.00 local share tax rate in effort for most districts
• High School Allotment on top of Tier 1 amount
• Use of unrecaptured I&S funding for M&O purposes
• Per Capita on top of Tier 1 amount (if ASATR is less than Tier 1 amount)
• Special Education set-asides
• Funding outside-the-system instead of increasing Basic Allotment or program weights
Equity Center InDepth
• GT set-asides
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Underfunding Transportation Costs What it Really Means In the school years 2009-10 and 2010-11, the antiquated transportation formula used by the state of Texas provided school districts just over $615 million. The actual cost of transportation for school districts during the same time period was over $2.5 billion. In other words, the actual cost of transportation was more than four times greater than what the state’s formula delivered.
(Other portions of Tier 1, such as compensatory and bilingual education are also underfunded.) The “Sum of Tier 1 Allotments per WADA” row in the chart reflects the amount of funding the various combined allotments in the basic state program provide, which are fairly similar across the groupings. On the other hand, the “Tier 1 Revenue per WADA” reflects the actual level of state and local funding provided to each district to cover the costs of the basic state program. This amount varies by over $2,500 per WADA between the lowest and highest-funded 10% of districts.
However, the fact that the state, through its Transportation Allotment, only funds 25% of what school districts actually spend on transporting children to and from school tells only part of the story. The charts on page 4 and 5 help demonstrate the rest of the story.
The last line of the table below represents the bottom line in more ways than one. It is the amount (per WADA) of Tier 1 funding left to districts after subtracting the Tier 1 program costs (as determined by the state formulas) and the underfunded portion of transportation costs. The inequity in the way the state funds the so-called basic program is
The Transportation Allotment is a part of the first Tier of the state funding system which is supposed to cover (i.e., theoretically covers) the cost of state required programs.
State Transportation Allotment Averages for Selected Groups* (Average of 2009-10 and 2010-11 school years) Lowest 10%
Lowest 25%
Lowest 75%
Highest 25%
Highest 10%
Tier 1 Revenue per WADA**
4,918
4,960
5,107
6,499
7,425
Sum of Tier 1 Allotments per WADA
4,928
4,924
4,895
4,791
4,726
Transportation Allotment per WADA
56.49
57.98
64.36
76.70
84.50
Transportation Expenditures per WADA 223.22
224.92
237.76
315.38
368.42
Amount per WADA Transportation is Underfunded
-166.73
-166.95
-173.39
-238.68
-283.92
Tier 1 Revenue Minus Sum of Tier 1 Allotments per WADA Tier 1 Revenue per WADA Left After Adjusting for Tier 1 Program Costs & Unfunded Transportation
-10
36
213
1,707
2,699
-176.35
-131.23
39.50
1,468.54
2,415.36
*Percent of districts, sorted low to high by state and local revenue per penny of tax effort per WADA. **WADA is each districts’ weighted students in average daily attendance.
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While the highest-funded districts have ample additional funding and discretion within Tier 1 to cover underfunding of any Tier 1 program, the lowest-funded will have to use three of their six “discretionary” golden pennies of tax effort (those funded at the Austin ISD level—about $60 per penny per WADA) just to cover the underfunded transportation cost.
appalling. It leaves the lowest-funded 10% of districts over $170 per WADA in the hole, and the highest-funded 10% with room to spare—enough for an additional $65,000 of funding per typical classroom of 22 students. The graph above illustrates the true picture of the impact on school districts. Where do the lowest funded districts make up for the lack of transportation funding?
In effect, at the same time the lowest-funded group loses effective use of one-half of its golden pennies for local enrichment, the highest-funded group has an average of $2,415 of excess Tier 1 funding left over after covering all of their transportation costs. That is the equivalent of an additional 40 golden pennies (at the $60 level) in local discretion, before they spend the first dollar of their six unrecaptured golden pennies.
Some may say, “Well, they could just cut costs,” but they have already cut their cost—to the point that they spend only 60% of what the highest-funded districts spend on transportation. Some might say, “Take the money from other Tier 1 programs,” but the other Tier 1 programs are already underfunded. If funds are taken from those programs, it would only serve to penalize the children who benefit from them.
Both in part and in whole, the current state funding scheme discriminates against children and taxpayers, by perpetually funding the educational opportunities of some at much higher levels than others. It is unfair, inefficient, and unjust—and beneath the dignity of the citizens of Even though using Tier 2 discretionary funding to cover the shortfall definitely compromises the local school board’s Texas. ability to make local decisions about programs deemed important by the local community, it is the only place left to get the money.
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Facilities Funding: Some Get Bricks, Many Get Straw School facilities have been recognized as an essential part of the requirement in the Texas Constitution to provide for public education. As the Supreme Court said in their 1995 Edgewood IV:
system. Another is that wealthy districts are not subject to recapture on their I&S (facilities) taxes. For example, while Laredo ISD can raise less than $10 per penny per ADA, with no state assistance until they are eligible for EDA the following biennium, neighboring Webb Consolidated ISD raises over $500/ADA per penny. The poorest district, Boles ISD, can generate only $3 per ADA for each penny until they qualify for EDA; Kenedy County-Wide CSD can raise almost $1,400 per ADA with just a penny of tax effort. Some districts (mostly wealthy) have found creative ways to use I&S revenues for purposes that are essentially maintenance and operations, and that has significant implications for the overall inefficiency of the system.
We acknowledge, and the State concedes, that if the cost of providing a general diffusion of knowledge rises to the point that a district cannot meet its operations and facilities needs within the equalized program, the State will, at that time, have abdicated its constitutional duty to provide an efficient school system. (emphasis added) Inequity in facilities funding doesn’t make the finance system inefficient – it adds to the inequities in M&O funding to create a system that is inequitable, and therefore, inefficient.
Even when state aid is provided, many other provisions limit the amount of help a poor district may receive. IFA funds can only be received for instructional facilities, leaving poor districts to fund transportation, administration and similar facilities on their own until EDA funding kicks in. New IFA funding is limited to $250/ADA, well below the full cost of many projects.
The Legislature established the Instructional Facilities Allotment (IFA), soon followed by the Existing Debt Allotment (EDA), in response to the court’s decision. The result was an initial improvement in the equity of the overall system resulting from the increased equity in facilities funding. Since then, it’s been mostly downhill. In the 200203 school year, state aid comprised about 30% of funding for school facilities. That began to drop rapidly as the guaranteed yield for facilities, set at $35 per penny per ADA in 1999, remained frozen while property values and construction costs increased. The $35 yield is now below the average wealth of the state, leaving over 40% of students in districts too “wealthy” to receive facilities aid.
For districts or projects that can’t receive IFA funding, there are limits on the EDA that can make some facilities totally dependent on local ability. While districts can levy up to 50 cents in I&S tax rate, they are guaranteed EDA assistance for only 29 of those cents. And some poor districts can’t even get to that point because bonding is limited to no more than 7% of taxable value. Since the amount of EDA assistance is limited to the amount that would be generated by the I&S tax rate at the end of the prior biennium, some facilities costs may be left or shifted solely to local responsibility.
Additionally, the state failed to appropriate sufficient money for new IFA grants and in some years, no money at all, including no new IFA awards for both years of the current biennium. This is problematic because when new IFA awards are not made or are insufficient to fund eligible projects, poor districts must wait one or two years after they sell bonds to receive state assistance. As of last year, the state share had dropped to 12.3%.
These limitations impact poor districts in general, but they have especially inequitable impacts on districts with uncontrollably higher facilities costs. While the state recognizes and assumes such cost differences for M&O costs, there are no such adjustments for facilities. Thus, districts that are fast-growing or have facilities that are sorely inadequate or in need of major repair are treated the same as districts with no special needs. Although both land
The failure to raise the yield and fund new IFA grants are only two of the many ways current facilities funding contributes to the inefficiency of the school finance
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and construction costs can vary widely across the state, these, too, are unrecognized in Chapter 46 of the Education Code, which sets the terms for facilities assistance. Taxpayers in districts with extremely high cost needs are left adrift for at least the first year or two, and even then, the low guaranteed yield provides scant relief to many.
This listing of finance inefficiencies caused by the inadequacy of the current system is likely incomplete. If you know of other examples through your experiences, please contact us so we can describe them in our pleadings under the Texas Taxpayer & Student Fairness Coalition lawsuit.
Save Texas Schools March and Rally Additionally, Save Texas Schools urges all state leaders and candidates to support the following urgent actions:
Over a thousand Texans participated in the Save Texas Schools march and rally at the state Capitol on Saturday, March 24th.
• Make outstanding public education a top priority for Texas;
Save Texas Schools is a nonpartisan statewide volunteer coalition of parents, students, educators, business leaders, concerned citizens, community groups and faith organizations whose goal is to educate the state’s elected officials about the importance of maintaining funding for Texas public education.
• Restore all school funding cuts made by the 2011 Legislature and provide sufficient resources for our growing student population; • Revise school finance laws to be fair to all students;
The Save Texas Schools Coalition stands for restoring funding cuts to public education, which reached $5.3 billion during the last legislative session.
• Fix the $5.4 billion annual deficit to avoid further cuts to education; and • Reevaluate and limit high-stakes standardized testing.
The goal of the rally and march was to send a loud and clear message to legislators that public education matters.
GET INVOLVED! Show your support for public education and Join the Fight for full funding of our Texas public schools. Also receive periodic updates on the school finance litigation.Visit www.equitycenter.org
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Kids Can’t Wait! So. What to do? A few Waco friends and I decided to organize and to organize smart! We remembered Margaret Mead’s wisdom: “Never doubt that a small group of thoughtful, committed citizens can change the world; indeed it’s the only thing that ever has.”
Bonnie A. Lesley, Ed.D. When we were working on the Money Does Matter publication for the Equity Center two years ago, we called for political action at the local level to influence legislators’ votes in the 2011 session. Some groups were formed, but, for the most part, they operated quietly in the background since probably no one could imagine at that time that Texas would enact one of the most austere school funding bills in the nation.
As a result, we decided to launch our organization, Kids Can’t Wait, with a community-wide education campaign about how schools are funded, who gets what and how, and why money matters in ensuring kids’ opportunities to learn. Our name connotes the urgency we feel.
Now we know that grassroots action is critically important! No amount of information provided at the state level has the leverage with legislators that grassroots organizations have. It takes both! After all, we still do have a democratic form of government, and it always works best when we at local levels educate, organize, register voters, donate money to campaigns, influence policy advocacy during primaries and the general elections, apply pressure, and hold our representatives accountable for the results we want to see.
The lowest-funded district in Texas gets $10,000 less per kid than the highestfunded district?
In the years that it will take to correct the legislation coming out of the West Orange-Cove decision, this current biennium of austerity, and the subsequent years to litigate, appeal, and then pass the needed legislation, a whole generation of kids will have spent their K-12 years in an underfunded, unfair, and unconstitutional system.
Several organizations have formed as a result of poor decisions made by the Legislature to abandon their responsibilities to Texas school children. Save Our Schools has successfully rallied large numbers of people for statewide protests, and we are reading of locally organized groups who are influencing the state’s conversation about school funding. We are also grateful for the out-front leadership provided by superintendents across the state. Importantly, we are seeing more and more publications, such as daily newspapers like the Fort Worth Star-Telegram, news magazines like The Texas Observer, and online publications like The Texas Tribune paying attention to the gross and unconstitutional disparities that exist in school funding and in taxpayer rates—and the costs to kids.
People in Waco are in shock with the cuts that occurred this year in numbers of teachers, which resulted in larger class sizes; in fewer instructional materials; in abandoned programs; and in deferred dreams. Just this past month the Board of Education voted to close NINE of our schools, and some of them are among Waco’s highest performing schools.
Did You Know?
Our “Did You Know?” campaign reflects my experience during my research for Money Does Matter. I used every opportunity with family, friends, acquaintances, neighbors, and people I had just met to ask the following:
But much more must occur! We can win the litigation we are involved in, but if we do not have well-organized, informed citizens in every legislative district, we will emerge again from the legislative sessions with such nightmares as “target revenue hold harmless,” weighted-student formulas that underestimate need, unequalized “enrichment” funding, and continued denial of the detrimental effects of poverty on children’s learning, health, and social behavior.
• “Did you know the lowest funded district in Texas gets $10,000 less per kid than the highest funded district?” • “Did you know if Waco were allotted even the state’s average funding per WADA that we would have received $11,000,000 more dollars in one year?” • “Did you know Fort Worth ISD receives $100,000,000 fewer per year than Austin ISD with similarly sized enrollments?”
“Never doubt that a small group of thoughtful, committed citizens can change the world; indeed it’s the only thing that ever has.”
• “Did you know Texas educates 10% of the nation’s children?”
-Margaret Mead
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DID YOU KNOW?
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Transportation Benchmarking Giving you the data you need to set goals, establish budgets, create action plans and make significant improvements in areas such as:
• Routing
• Mileage of Fleet
• Ridership
• Age of Fleet
• Shop Costs
• Safety
For more information, e-mail info@benchmark4excellence.com or call 281.910.0113.
Benchmark
Excellence
www.Benchmark4Excellence.org
TBA February 2013 • Network and Share Best Practices
Our First Planned Steps:
• “Did you know Hispanic school children in Texas are 22% of all the Hispanic school children in the United States?”
Focus. For now, we anticipate our major focus will be school finance. Depending on the ideas of our members, we may want to expand our agenda to include other issues, such as the issue of the growing movement toward total privatization of education, which we see as a major threat to democracy as well as being extremely detrimental to kids. This issue is closely related to school finance. We are also concerned about the maniacal emphasis on assessments for accountability, rather than an emphasis on continuous progress monitoring to improve learning. These issues will resonate with people.
• “Did you know there is a direct and positive correlation in percent of Texas kids passing all TAKS tests and the funding level of their schools?” • “Did you know there is a direct and positive correlation in the dropout rate and the funding level of schools?” • “Did you know a Schott Foundation study found that Texas ranks 43rd among the states in disadvantaged kids’ opportunity to learn? According to the study, Texas’s negligence in this area costs us $6.8 billion annually in lost earnings of dropouts, losses of health-care costs, crimerelated costs, and reduction in taxes paid.”
Ensure Diversity. We must build an organization that is inclusive. We will be political, but we will be non-partisan. Polls indicate strong support for public education and adequate/equitable funding among Democrats, Republicans, and Independents. Our leadership will be a diverse group representative of our community. We will reach out to retired members of our community and to high school and college students. Our members will come from all walks of life.
• “Did you know Texas ranks 33rd among the states in average teacher salaries?”
Media. We will have our webpage and Facebook page up soon so we can invite people to join and participate in our activities. We will provide critical information to the public
In every single case, including conversations with educators, people did NOT know these facts, and they were outraged they didn’t know. Goal #1, therefore, is to make sure people know. We want to stir up that outrage and then channel it into positive action on behalf of children.
Equity Center InDepth
Annual Users Conference
(continued on page 10)
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Kids Can’t Wait! (continued from page 9)
about our objectives, our activities, and event details. We will also post links to information about Waco ISD and other districts in the county, general information sources about education issues, newspaper articles across the state, studies, etc. We also will produce a YouTube video series. “Did You Know?” Campaign. We plan to will conduct School Funding 101 sessions for our members, for people not yet members across the community, and for citizen groups (clubs, organizations, churches, etc.). We will provide people access via our website to the information at the Equity Center, the Texas School Board Association, the Texas Education Agency, and other organizations. Outreach. We will begin immediately to start talking with leaders in the 20 school districts in McLennan County and in the schools districts in our state legislative districts. They will be invited to join us or to start groups in their own districts. We will start with people we personally know and with organizations we know will be supportive: PTA, retired teachers, teachers’ associations, student leadership organizations, Waco’s Education Alliance, Avance, NAACP, LULAC, school program advisory committees, business leaders, people at Waco’s three colleges, religious leaders, and so on. We need to become big in order to influence legislators and candidates. We also want to be affiliated with groups existing elsewhere across the state so we can all join hands in strategies for success and in sharing information and resources. We will be available to lend our support to groups wishing to organize in other Texas communities.
PAC (political action committee). We have also discussed looking into a 501(c)3 or 501(c)4 organizational structure Activities. We are planning a voter registration drive, helping people get voter IDs, attending county and state political party conventions, conducting candidate forums, and teaching our members how to make their voices heard. In order to influence how school board members, Texas School Board of Education, and legislators think and vote, we know we have to participate politically—in both parties. The Future. All of us recognize we are in this for the long-haul. It will take time to secure adequate/equitable funding for Texas schools, and it will take time to repair the damage to kids’ lives, to the education profession, and to sound education policy and practice. We also recognize that nothing ever stays “fixed” permanently. We cannot again let down our guard. We must be vigilant in our oversight of policymakers, and we must hold them accountable for their decisions. The cuts in 2011 to the education of Texas children cannot be forgotten. Kids Can’t Wait! is a rallying cry for Waco and across the state. Superintendents and school board members are not necessarily the ones who should do the organizing themselves and be the faces of the reforms we seek. You can, however, in the background, encourage “a small group of thoughtful, committed citizens” to do so—and, together, we can change our state so that people “don’t mess with Texas” again! Do it now!
Dr. Lesley is the author of Money Does Matter: Investing in Texas Children and Our Future. She taught 17 years, and she Organization. When the time is right, we will formally served as an administrator in five urban school districts and one organize. We will need officers, dues (but minimal), state department of education. She has served as an adjunct bylaws, a bank account, etc. We will be happy to share with professor in curriculum at five universities. She can be reached other groups what we learn along the way. If we decide to through the Equity Center or via email at balesley@aol.com. raise funds to support candidates, we will need to form a
Do you have a successful local campaign, op-ed piece, TRE materials or any story from your district that may benefit other EC members or the fight for equity? If so, please call us at 512/478-7313 or e-mail admin@equitycenter.org. We will post it in the Member Forum on our website and we may highlight it in an upcoming quarterly InDepth.
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Helping Districts Succeed Moak, Casey & Associates (MCA) brings together a team of experts who have been associated with every major issue affecting school finance and accountability in the last 35 years, and is considered the gold standard in high-quality research and planning services for a diverse range of clients concerned with the financial operation and management of public school education. Moak, Casey & Associates works with both small and large districts to identify the specific financial problems/issues that affect them and develop an action plan for effectively dealing with those issues.
MCA provides an array of specialty services including: • Budget development & review; • Performance measurement systems, including dashboards and balanced scorecards; • Process improvement management, including process re-engineering; • Accountability analyses • Strategic planning efforts • Revenue estimating • Staffing analyses
TASBO Legislative Pipeline Service This service provides detailed analytical and comprehensive information on education-related legislation. Subscribers receive daily reports and customized revenue estimates for each major legislative proposal that would affect school district revenues, enabling school officials to communicate more effectively and to make sound decisions regarding finances, new programs, accountability, and revenue structure.
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TASA Accountability Forum Service Offered by TASA in cooperation with Moak, Casey & Associates, this is a unique subscription service designed to assist superintendents and other school leaders in managing implementation of House Bill 3 and other accountability issues. Subscribers receive legislative updates, detailed analysis of district and campus accountaiblity data, and interactive participation in an electronic forum for facilitating rapid exchange of information.
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The State Did Cut Public Education... Unless You Use Pretend Numbers Suppose your boss comes to you and says, “We got a windfall insurance settlement, so instead of paying your salary this year totally out of our operating revenue, we’re going to pay 10% of it from the insurance money.” It doesn’t affect you, so you don’t care. The next year your boss says, “We’re going to pay you the same money out of our operating account this year as we did last year, so don’t worry, it’s not a cut.” To you, of course, it’s a 10% cut. What’s the point of this story? It is exactly the child’s game of “pretend” that Texas state officials are playing when they claim – falsely – that funding for schools wasn’t cut this year. Many of them claim that funding was actually increased. Most often, they pretend it was a $1.6 billion increase, but one top official was quoted recently saying, “We appropriated more money for public education than we have ever appropriated in the state of Texas — $3.8 billion more for the Foundation School Program.” He said that school groups are upset, “because they did not get what they hoped for.
They expected an $8 billion increase, and they got a $4 billion increase (and are calling that a cut)”. But this is no child’s game. When school officials and other supporters of public education say that funding for education was cut and the response is, “No, it was increased, but just not as much as they wanted,” there are several vicious implications being made. First and foremost, supporters of public education are being called liars. Second, and perhaps equally damaging, it implies that educators and those who care about education are greedy to the point of being insatiable. But surely, you say, everyone knows the truth and understands that state funding for education was cut, right? Wrong! If the “funding was increased” story isn’t answered, quickly and forcefully, every time it is trotted out, it will be believed. If it forms people’s first impression of what happened last Session, it will be extremely hard to get them to see the truth and change their minds.
Uncover Additional Transportation Funding 80% of public schools in the state of Texas do not receive all of the state transportation dollars to which they are entitled.
We can help
change all that. We can help maximize your district’s funding, by reviewing and analyzing your district’s Route Service Report, to uncover additional funding.
You only pay us if funding is found and recaptured.
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w w w.iTransSolutions.org
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Facing the Facts: School Finance Concepts
So how does this game of pretend work?
For next school year (2012-13), funding will drop further to $4,019/ADA – $671 less – even if you don’t take away The easiest explanation is that there are multiple accounts the $2.3 billion that the Legislature cut (also in SB 2) with from which the Foundation School Program (FSP) is funded. promises to pay it back the following biennium. If they To create the myth of an increase, they selectively use only a don’t pay it back, that appropriation drops to only $3,531/ few of the accounts that give them the best-looking numbers ADA, almost $1,160 per student less than four years earlier. (the sources that went up) and pretend that the sources that went down didn’t exist or aren’t “general revenue.” What They Did The Texas Education Agency (TEA) “Summary of Finances” Of course, the 800-lb. gorilla was the federal American provides what has actually been paid to school districts or Recovery and Reinvestment Act (ARRA) “stimulus” money. estimates what they will be paid based on the most current When the 2009 appropriations conference committee, information. As of March 8, 2012, the “Total State Aid” for at the last moment, reduced general revenue (GR) for all schools for the 2010-11 school year was $19.90 billion. public schools by $3.6 billion ($3.25 B for the FSP) and Subtracting out aid substituted ARRA funds, the explanation was, “This isn’t for school facilities a cut because you have to count the stimulus money.” under Chapter 46 Now, when they compare GR from this biennium to last of the Education Any way you look at it...funding for biennium, they say, “It isn’t a cut because you can’t count Code, state aid for public school was cut the stimulus money,” just like the boss in the story above. operating expenses by the Legislature totaled $19.31 in 2011. The Truth billion last year. So if we don’t want to play games and pretend, what are the real numbers? These can be difficult to pin down for several For the current reasons: the appropriations bill numbers are estimates (2011-12) school year, the corresponding amount is $17.78 billion, not and what really is distributed and spent changes as better including facilities aid (numbers for that aid are not yet information on student counts, property tax values and available). In other words, TEA currently estimates that collections and income to the various funds that pay for Texas schools will receive over $1.53 billion less in state the FSP becomes available. Also, the Legislature makes it aid for school operations this year than they did last year. more difficult by putting numbers in the appropriations bill while passing other bills at the same time that amend those numbers. In fact, Section 5(a) of SB 2 in the 2011 The Bottom Line special session not only amended the appropriations bill, Any way you look at it – unless you cherry-pick a few Sections 5(c), (d) and (e) of SB 2 said, “Forget what it says in numbers out of context that don’t tell the whole story, Section 5(a) of this bill, here are some different (and much funding for public schools was cut by the Legislature in lower) numbers.” Think they want to make it confusing? 2011. The reduction in funding per student is very large: a drop of 13.3% from the estimated appropriation of three What Legislators Thought They Were Doing years earlier. The Legislature has since passed mandatory There are some useful numbers to look at in the salary increases and is now implementing the much more appropriations bills, however. The “Sum Certain” rigorous STAAR exams to replace the old TAKS assessment. appropriation for the Foundation School Program tells The cost to the districts – and to local property taxpayers you what legislators thought they were spending when – for educating those students has increased significantly. they voted on the bill. Similarly, another rider tells you how many students they thought they would be That is not pretend. That is real. spending it on. If you divide the former by the latter, as shown in the chart below, you get the state aid per student that legislators assumed they were voting on.
How Legislators Thought They Were Funding Public Schools (State Aid) School Year
FSP Sum Certain
Appropriation per ADA
2008-09
$20,780,700,000
$4,690
2011-12
$18,848,600,000
$4,067
Reduced Funding
$1.93 Billion
($623)
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Funding Loss per Average Class of 22
($13,000)
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Facing the Facts: School Finance Concepts
Champion for Children Senator Eddie Lucio Receives Award The Champion for Children award is given each year to legislators who have made consistent and outstanding contributions to ensure fair and equitable funding for all Texas public schools while ensuring fair treatment for property tax payers. “Senator Lucio has steadfastly advocated school funding plans that would treat all school children and property tax payers fairly. He is leading the fight to ensure that every Texas child has access to a world-class education without regard to where they live,” said Equity Center Director Wayne Pierce. “I am honored to receive this award,” said Senator Eddie Lucio, Jr.. “However, the true reward will be that one day the state of Texas will fund public education fairly and generously.”
Pictured from left: Vice President of Membership, Rolando Peña, Senator Eddie Lucio, Jr., Equity Center Director Dr. Wayne Pierce.
New Communications Director Joins Equity Center We are pleased to welcome Tedrah Hutchins Robertson as our new Communications Director. Prior to joining the Equity Center in May, Tedrah served as the Government Affairs Manager for the Texas Land Title Association, and as a policy analyst, committee clerk, and media managing editor for several members of the Texas House of Representatives. She holds a Bachelor of Fine Arts from The University of Texas and is currently pursuing a Masters degree in Legal Studies at Texas State University. She is actively involved in a variety of civic and cultural organizations including Big Brothers Big Sisters of Central Texas, the Texas Society of Association Executives, Texas Exes, and the League of Women Voters.
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Facing the Facts: School Finance Concepts
Beyond the Capitol Dome:
Chronicles of an Underfunded District The local district impact of school funding decisions made at the state level is usually lost in the magnitude of a system that serves five million children with myriad needs. Statewide decisions are sometimes like bombs dropping from 40,000 feet. The strain put on the communities below goes unrealized. Let’s imagine for a moment this local impact, without ignoring the collateral damage… The Scene: Local school board meeting. PTA members have become frustrated that programs and services they believe very important are not available to their children. They are on the agenda to request that three programs offered at wealthy Nexdore ISD be added locally or enhanced to the Nexdore ISD level. Board President: ...ok that brings us to Agenda item four-A, and before we start I want to acknowledge the hard work of our PTA members this year. It is wonderful to be part of a community that—though we’re not as wealthy as some districts—makes providing for its public schools such a high priority. I recognize our PTA President Rhoda Smith to speak. [Mrs. Smith confidently launches into a PowerPoint presentation outlining the benefits of three programs selected by the PTA membership, and requests adoption by the district. She finishes to robust applause and smiles all around.] Superintendent: That’s a wonderful presentation, and we can all agree our children need those programs. In fact, we have looked into adding those programs. [Applause and more smiles] However, we just can’t afford them unless we sacrifice existing programs we developed to help our children meet state requirements. [Room grows quiet, Superintendent turns to the Board President] Mr. President, if the board will change their minds and vote to raise the tax rate another 4 cents to the $1.17 Statewide decisions are sometimes like bombs max—and if our patrons vote to ratify the new rate—we can afford dropping from 40,000 feet. to offer one of the three programs the PTA has recommended. [The Board looks expectantly to a flustered Mrs. Smith, who turns to the 20 or so PTA members in attendance. All at once the quiet turns to chaos as each member voices support for his or her choice of programs. The Board President gavels loudly and calls for order. The PTA members fail to yield to the Board President’s authority and voices grow louder and more hostile. PTA members begin to move their chairs to be in close proximity to other PTA members who champion the same program they do. Members supporting the college-bound program spread out, beginning to encircle the other members. Board members grow fearful and look toward the Board President, with eyes imploring her to “do something” to quell the PTA uprising. The Board president looks to where Mrs. Smith had been sitting, but the chair is empty. She has fainted and two of her members are helping her from the room.] Board President [In state of panic]: Our Father which art in heaven... [Quiet returns to the board room as groups of PTA members and concerned citizens bow their heads slightly, while suspicious eyeing one another.] [After decorum has been restored, the board asks the PTA officers to meet with the superintendent and return to a special board meeting next week with a proposal. Unknown to the Board, Administration or the PTA, word has already gotten out that the Board will vote to raise taxes to the maximum at next week’s special meeting.] [To be continued....]
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