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Volume 2, Number 3 Summer 2012

InDepth

Published Quarterly

Understanding Texas School Finance

Public Education Attacks Continue In 1785, pronouncing public purpose and public ownership as necessary for America’s schools, John Adams declared: “The whole people must take upon themselves the education of the whole people and be willing to bear the expenses of it. There should not be a district of one mile square without a school in it, not founded by a charitable individual, but maintained at the public expense of the people themselves.”

and supplies, and thinned their ranks of teachers, custodians, librarians, and other support positions.

Fifty-one years later, the Texas Declaration of Independence listed the failure of the Mexican government “to establish any public school system of education, although possessed of almost boundless resources...” among the reasons for severing political ties. But it wasn’t until 1854, at the urging of Governor Elisha Pease, that the Texas Legislature would pass the Common School Law, which for the first time, provided state support for schools and created an endowment that today is known as the Permanent School Fund.

A statement which seems like a far cry from his 2004 proclamation celebrating 150 years of public education in Texas which stated, “Public education is an integral componenet of a free society and is fundmental to democracy.” It continues, “Texas’ schools have nurtured and developed the fertile minds of millions of youths across this great state. Texas public schools provide a robust, well-rounded curriculum, helping students to maximize their potential. Moreover, these schools continue to be recognized throughout the country for their commitment to high academic achievement.”

When Governor Perry was asked about the cuts earlier this year, he told the Dallas Morning News he saw no need for a special legislative session to restore some of the education funding that was eliminated last year and said that schools were receiving an adequate amount of money.

Taking into consideration the deep roots Texas’ public education sprouted from, who would have ever guessed we would be where we are today. Over the last 158 years, what was once widespread support for our public education system - not because of the benefit to individuals, but the fundamental contribution to society - has turned into a battleground.

According to a recent National Education Association (NEA) report, the national average spent per student per year is $11,463. Texas - which prior to the historic cuts ranked 45th in the nation by NEA - will spend on average $8,908 per student. For a system once so proudly heralded, one might have expected a rather different outcome last session.

Preparing for the Future

In just a few weeks our court system will once again hear arguments regarding our public school funding system. The Texas Taxpayer and Student Fairness Coalition et al. v. Robert Scott, et al. trial is set to begin on October 22 and will likely last through the end of January, which means there could be a decision reached during the 2013 legislative session.

The Hits Keep Coming

Judge Dietz summed up it up best, when in a recent hearing he said the case looked like “the granddaddy of all cases” and noted, “We’ve got every topic that’s ever been discussed.”

The $5.4 billion cut, one of the largest in Texas’ history, has resulted in both large and small districts transforming school life. Many increased class sizes, reduced services Equity Center InDepth

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Surely, Efficient and Fair Mean Equal Over the years, some of the most consistent comments state and should always be viewed as such. But the charts heard from people in well funded, wealthy districts in give a quick look at what actually happens under the the battle for an equitable and fair system for funding the current state funding scheme. The green represents total educational opportunities of Texas maintenance and operations (M&O) children have been “it’s our money, funding for the lowest-funded Pie Slice for Lowest-Funded 10% we should be able to keep it” and districts with 10% of WADA and $700 Million Short! “surely, you do not want to take our the red shows the funding for the money away from our district.” highest-funded districts with 10% of WADA. These comments seem to echo the 30 $25.79 second sound bites we hear each day As the charts clearly demonstrate, Billion and on first blush they almost sound in the 2011-12 school year the state’s reasonable. However, when you efforts to efficiently use its resources take the time to break them down, fell woefully short. Comparing the the reasoning behind the comment funding for the lowest -funded proves false on several fronts. districts with 10% WADA with the highest-funded districts with 10% Local school districts were WADA, there is a $700 million gap. $3.06 Billion $3.77 Billion designed, established, and exist as Looking at total funding for just Highest-Funded Lowest-Funded creations of the state to perform a those districts, the highest-funded constitutionally required function— districts with 10% WADA enjoy a establish an “… efficient system slice of the pie that is substantially of free public schools.” Texas larger. Most people think an efficient Equal Shares of the Pie? has chosen to use local school and fair method of distributing the districts to accomplish this task. benefits of the state’s resources for Over our history, the state has had the purposes of educating children urban districts and rural districts, would show a pretty equal share 55% 45% common and independent, county of the state’s resources flowing Highest-Funded Lowest-Funded and consolidated; even districts to districts to educate children 10% 10% everyone called tax havens because regardless of the zip code they live they were organized to have few or in. Obviously, this is not the case in even no students, so the property Texas. owners in them paid little or no school property tax. In 1901, Texas Which brings us back to the problem had 7,446 common districts and 288 with the statement we hear so many independent districts—in 1922, there were 7,369 common times from those in well funded districts, “. . . surely you and 858 independent districts. The point being school don’t think taking money from our district is right?” The districts are a function and creation of the state and they truth is, in an efficient and fair system, there would be exist at the will of the state. no difference in the funding levels between districts. The necessity those in low-funded districts sometimes feel to Correspondingly, the state has chosen the locally collected apologize to those in higher-funded districts for simply property tax as a vehicle to access the wealth of the state wanting their children to benefit from the resources of the for the purpose of educating its children. Like the sales state in the same manner as children in higher-funded tax, it is just one of several methods of taxation chosen by districts would not exist. the state legislature to provide revenue needed to perform those functions of government that are either required by The reality of the situation is this. If the “pie” of resources the state Constitution or determined to be needed by the the state has available for free public schools is truly legislature. Likewise, recapture (the trigger mechanism limited, and we are constantly reminded by our elected for the “it’s our money” argument) is simply a legitimate officials and leaders that it is, then when one district has and useful tool to enable the state to efficiently access all its substantially more of the state’s resources per WADA resources, a constitutional requirement. available to educate children than another, isn’t the higherfunded district actually taking money away from the lowJust like the sales tax (collected locally) becomes a resource funded one? of the state used to accomplish state purposes, school property taxes (also collected locally) are a resource of the Maybe that should be the 30 second sound bite. Summer 2012

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Equity Center Hosts Mary Hardin Baylor Doctoral Students For the last several years, the Equity Center has hosted a half day school finance program for the Mary Hardin Baylor doctoral candidates. This year, the program was held at the Double Tree Suites in Austin. We were honored to have Dick Lavine, Center for Public Policy Priorities, and Cheryl Pace, Texas Taxpayer and Research Association, join us for the event.

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In Memoriam

A.M. “Bob” Aikin, III On June 13, Texas’ public education system lost one of its biggest advocates and supporters, A.M. “Bob” Aikin, III.

“Bobby was a true friend, supporter, and advocate for the school districts and school children of Texas,” said Wayne Pierce, Executive Director of the Equity Center. “As a member of the Legislature and State Board of Education, Bobby strived to be a part of the solution to school finance and he worked tirelessly to accomplish this goal. What was best for all the children of Texas was always front and center for Bobby.”

Born July 12, 1946, Bobby was the only child of Welma and Senator A.M. Aikin, Jr. Bob attended the University of Texas at Austin and later pursued a career in public service. He worked at the State Comptroller’s office and the Texas Legislative Budget Board before moving to Commerce in 1973 to serve as the chief state lobbyist for East Texas State University.

In 1993, Bob founded The Aikin Group, a financial advisory firm primarily focused on funding for public school facilities in chronically underfunded districts across our state. In 2009, he began hosting KETR’s Breakdown with Bob Aikin, a weekly segment in which he would “break down” the latest news or trending topics. Bob cherished his family and made sure to brag on their accomplishments, awards, and successes to anyone and everyone. He was an enormously generous man, gifted with wit, wisdom, and an unyielding intellectual curiosity in the ways of the world - and how to make it a better world for all.

In 1986, Bob was elected to the Texas House of Representatives, representing Hunt, Rains, Wood and Rockwall counties. He received numerous awards and accolades for his dedication to public education. In 1988, Bob was elected to the State Board of Education, where he served two terms and continued his lifelong work to ensure equity in education funding and the opportunity for every student in Texas to have access to a great school.

Check Out These Equity Center Presentations at the

TASA/TASB Convention

September 28-30 - Austin Convention Center When the Legislature Does the Laundry, Will Your District Lose its Shirt?

Dr. Wayne Pierce, Executive Director

1 p.m. - Friday, Sept. 28th - Ballroom G Despite a solid school finance cas against the stata and a cautiously optimistic view of the potenetial level of success, the solution always comes back to the Legislature. What are the three potenetial scenarios the Legislature will be working within when it meets in January? What are the fatcs they will be working with or working to ignore? Discover the role you and your district will play in the upcoming session.

Texas Taxpayer & Student Fairness Coalition Update 9 a.m. - Saturday, Sept. 29th - Ballroom G The school finance trial will be less than a month away so you wont’ want to miss this opportunity to hear the latest update and find the answers to your latest school finance lawsuit questions.

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Champion for Children Senator Kel Seliger Receives Award In July, the Equity Center traveled to Amarillo to present Senator Kel Seliger with the distinguished Champion for Child Award. “Senator Seliger is a long-standing advocate for Texas’ public school children. As a member of the Senate Education Committee, he has worked tirelessly to ensure every child, no matter where they live, will have access to a quality education. He is a true leader in the fight to protect our children and their futures and we’re honored to give him this award, “ said Dr. Wayne Pierce, Executive Director of the Equity Center. The Champion for Children Award recipients are chosen by the Equity Center Board for their substantial contributions to ensure fair and equitable funding for all Texas public schools, while ensuring fair treatment for property taxpayers.

Senator Kel Seliger and Dr. Ray Freeman, Equity Center Deputy Director

“We have profound challenges to address in the 83rd Legislature, and I look forward to working with educators, education groups such as the Equity Center, and Texas businesses, whose future will be in the hands of the Texans who are in school today,” Seliger concluded.

“Public education is the most important investment that Texans make and in which the legislature is involved. It is a privilege to be able to work with educators and the business community to continually improve our system,” said Senator Seliger.

The Equity Center would like to thank Ray Cogburn, Region XVI, Daniel Coward, Amarillo ISD, Toby Tucker, Claude ISD and all of the Region XVI educators that attended, for their help with the award presentation and helping us honor Senator Seliger.

In addition to serving on the Senate Education Committee, Senator Seliger also serves on the Joint Interim Committee to Study Public School Finance System, which will make recommendations to the legislature prior to the 83rd Regular Session which begins in January.

A Behind the Scenes Look at the ECTV Brock Gregg, Governmental Affairs Director for the Association of Texas Professional Educators, stopped by the ECTV studio in May to discuss TeachtheVote.Org, a non-partisan voter resource website dedicated to public education issues. While the initial video is shot using a green screen as the backdrop, the finished video looks completely different. You can check out the finished video and others on our Equity Center You Tube channel.

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Fear of Being “Dumbed-Down” A superintendent from a high-funded district spoke out about the Equity Center’s mission to have an equitable funding system in Texas that treated all districts, all children, and all taxpayers fairly. He—let’s call him Bill— wanted to make it very clear he supported equity and had no problem with those on the bottom being brought up to his district’s funding level. Clearly exasperated, Bill added, “But, all that having equity now will do is dumb our school down.”

he was against it. Now, it was my turn to be exasperated. I quickly reminded him of his previous comment in support of an equity that didn’t “dumb-down” his district, and his response amazed me. Bill’s problem was that our proposal did not provide enough new money for his district. “If we spend all of this money bringing the bottom up, there’s not going to be enough money for my district to keep doing what it is doing now, and we need more.”

This conversation took place in the fall of 2008. I remember it because in the spring of 2009 we introduced a funding concept that did exactly what Bill supported. Our plan, which was introduced as companion (i.e., identical) bills in both the House and Senate chambers, phased lower-funded districts up to the Austin ISD funding level (about the 95th percentile of wealth) over several years, while not reducing any district’s funding level—including Bill’s. In fact, it guaranteed Bill’s district would receive $250 per WADA new money in the following biennium—$100 increase in the first year and another $50 above that in the second.

He closed the conversation with, “All this is going to do is ‘dumb-down’ a lot of good schools.”

Adequacy

We recently had a meeting with a group of lower-funded districts. One of them, Lake Worth ISD in ESC Region XI, is low-funded even though they are already taxing at $1.67. That’s $1.17—the maximum for M&O—plus another $0.50—the maximum for I&S. LWISD voters have approved over $20 million for bonds the district cannot sell because the low I&S funding levels have already forced the district to the I&S cap. The bottom line is the district has serious needs that cannot be met under current state law.

When Bill spoke out against the bill, I was completely caught off guard. This was a perfect opportunity for him to jump on board an equity movement which didn’t “dumbdown” his district, one that brought the bottom up, and

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Lake Worth ISD’s funding, even at the maximum tax rate, is far below the level our funding system provides for Bill’s district. In fact, it is substantially below the level he was afraid his district would be “dumb-downed” to. Recalling those earlier conversations, I wondered aloud to LWISD Superintendent Dr. Janice Cooper what Bill would call her funding level. Her response, “Evidently, he’d call it adequate.”

per biennium, there was sufficient money there to cover the $4 billion in cuts, without taking from the children in the districts funded at the very lowest levels. However, when the dust settled at the end of the regular (and a special) session, $2.5 billion was taken from the Tier 1 regular program funding and only $1.5 billion was taken from TRHH. An additional $1.4 billion was taken from grants, including some for pre-K and full-time kindergarten funding, and other programs.

There it is.

The table below shows programs among those that were zero funded.

Pathway to Budget Cuts

During testimony before the Senate Finance subcommittee charged with coming up with a plan to cut $4 billion from the Foundation School Program last session, some superintendents from high-funded districts testified some of the cuts must come from even the lowest-funded districts—in order for them to have “some skin in the game.” This push was reinforced by some Senators, one of whom said the subcommittee must decide whether they wanted to find an equitable solution or a fair one. In this particular Senator’s opinion, the two were not the same, evidently believing it was not fair for children in low-funded districts to have the same educational opportunities readily available in her district.

Of all the cuts, only about 28% came from TRHH, while districts funded at much lower levels—many of them already taxing at the maximum level—were forced to “dumb down.” Dumb down, that is, from a level that was already lower than the “dumb down” level that highfunded districts thought so unfair and desperately strove to avoid. Low funded districts do a tremendous job within the confines of their available resources. Many communities have committed to the very highest tax rates to maximize what even then is substandard funding. Fixing this unfair, inequitable, inefficient, and harmful state policy that victimizes children in so many districts should be at the top of the list, but it hasn’t been. And it won’t be until either the courts make the Legislature do the right thing, or the mothers, fathers, and taxpayers across Texas do. We can only hope it is sooner rather than later.

Other Senators on the subcommittee countered, pointing out cuts should come from the supposedly “temporary” Target Revenue Hold-Harmless (TRHH). With $5.5 billion above the foundation program routinely going to TRHH

Examples of Zero Funded Programs New Instructional Facilities Allotment (NIFA)

New Instructional Facilities Project

Helps offset additional cost in opening new campuses The Instructional Facilities Allotment helps fund new instructional facilities in the poorest school districts Assistance with existing IFA debt was continued, but there was no funding for new projects

Military Allotment

 unding to provide special support for children of a parent serving on F active duty in a combat zone as a member of our armed forces

Optional Extended Year

Funding for extra instruction beyond the regular school year for At-Risk children

Rapid Decline in Average Daily Attendance

ADA loss is capped at 2% for one year to help districts adjust to lower funding

Rapid Decline in Taxable Value of Property

Loss of Taxable Value is capped at 4% for one year to help districts adjust to lower funding

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The Unkindest Cuts A recent article (K-12 Education Funding: Most States At Levels Lower Than Pre-Recession) identified Texas as having the third-highest percentage reduction in public school funding this past year – at -10.4% – with only Illinois and Kansas suffering larger cuts. Yet many Texas public officials still insist that funding for schools was increased, not cut, as we described in the April 3 ECX, “A Magician’s Misdirection”.

Table No. 1 Appropriated (original bill amounts; FY2008-09 adjusted for HB2 changes) General Revenue Available School Fund

2008-2009 Biennium

2012-2013 Biennium

645,915,169

231,194,647

2,479,500,000

2,826,938,067

501,385,276

612,533,733

25,377,809,856

27,779,063,742

342,781,457

40,000,000

2,074,700,000

2,008,568,000

31,422,091,758

33,498,298,189

As that article pointed out, a major part of the phantom “increase” claim is based on two conflicting treatments of the $3.2 billion in federal “stimulus” dollars Texas received and appropriated to schools in 2009. Those funds were used to supplant general revenue, with the explanation that it was not a cut in funding because you had to count the stimulus money. Now, the same officials who argued no cut was made in 2009, say there wasn’t a cut in 2011 because you can not count the stimulus money. So, what are the real facts?

State Textbook Fund

The numbers are confusing, partly because of the stimulus funds, but also because revenue was appropriated in one bill, then changed in another, or sometimes changed in another section of the same bill.

Property Tax Relief Fund

8,077,958,000

4,537,568,000

Appropriated Receipts (Recapture)

1,994,200,000

1,742,100,000

41,590,736,758

39,777,966,189

To avoid the gaming of the stimulus funds, let us examine the side chart which compares where we are now – FY 2012-2013 biennium – with what was appropriated for the FY 2008-2009, budgeted in 2007 biennium, before the federal stimulus program was adopted.

Appropriated Funds

As is evident, a part of the “misdirection” is the comparison of only some of the state funding sources (e.g. “general revenue”) while leaving out other funds that decreased over time. This table gives you all of the state revenue appropriated to TEA in the respective appropriations bills, as well as the changes made to those bills by subsequent legislation.

Foundation School Fund Educator Excellence Fund Lottery Proceeds TOTAL General Revenue Telecommunications Fund (TIF)

GRAND TOTAL STATE FUNDS

96,487,000

0

SB2 revised estimates

-800,000,000

SB2 HJR109 contingency

-300,000,000

Net TOTAL GR

31,422,091,758

32,398,298,189

Net GRAND TOTAL STATE FUNDS

41,494,249,758

38,677,966,189

SB1/SB2 Aug payment delay

-2,300,000,000

Actual TOTAL GR

31,422,091,758

30,098,298,189

Actual GRAND TOTAL

41,494,249,758

36,377,966,189

Note that the funds described as “General Revenue” in STATE FUNDS the original bill amounts appear to have increased by about $2 billion in FY 2012-2013 compared to four years expected students. The $300 million dollar reduction was earlier. However, the three funds immediately below the “TOTAL General Revenue” sum were also major sources of made on the assumption that the constitutional amendment funding for public schools and act just like general revenue. proposed in HJR 109 would be adopted by the voters. It was, but the Legislature’s own estimates of how much that would generate in additional funds was only about $150 To complicate the process, in the very same Senate Bill 2 of million and even that revenue isn’t guaranteed. the 2011 special session that produced the “original bill” amounts, three later sections of that same bill reduced The final reduction of $2.3 billion is the result of the “smoke them. The first reduction of $800 million was explained and mirrors” trick of delaying the state aid payment school as resulting from “revised estimates” of the expected increase in property values and reduction in the number of districts are to receive in August of 2013 until September, Summer 2012

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which is the first month of the following biennium. The state leadership argues that this money isn’t really a cut, just a delay. However, that same leadership also tried to pass legislation that would have removed the requirement that districts be repaid if insufficient funds were appropriated. Sen. Wendy Davis’ filibuster, which killed that bill at the end of the regular Session, helped prevent this from happening.

After adjusting for the $800 million “revised estimates” in SB 2, the estimated cost of the Foundation School Program for the current 2-year budget is over $2.4 billion less than the estimated cost four years earlier – a 6% decline. That is in actual dollars, with no adjustments for inflation or student growth. Including the $2.3 billion August payment delay, the amount actually authorized to be spent on the FSP this biennium is more the $4.7 billion lower, a reduction of nearly 12%.

If you take them at their word that the $2.3 billion will be repaid, the total funding reduction is about $2.8 billion, or around -7%. If you go by what was actually appropriated this biennium, the cut is over $5.1 billion, a reduction of more than 12%. And remember, that is compared to four years ago, not what schools operated with in the FY 20102012 biennium.

Per-Student Reductions

While state funding was being reduced in actual dollars, the number of students those dollars must educate has climbed dramatically. In the 2007-08 school year, the first year of the FY 2008-2009 biennium, legislators estimated in the appropriations bill that the money appropriated would be spent on about 4.34 million students in average daily attendance (ADA). The appropriations estimate for the 201213 school year, the second year of this biennium, is that there will be over 4.71 million ADA, an increase of about 368,000 students.

The Foundation School Program “Sum-Certain” Limit

The funds listed above are the totals appropriated to the Texas Education Agency, which not only pay for the Foundation School Program, they also pay for the grant programs (which were cut by $1.4 billion) and for the TEA administration. The appropriations bill does not provide specific numbers appropriated only for the FSP, but it does provide an estimated total amount, called “the sum-certain appropriation to the Foundation School Program.” This is the legal limit on the amount of state funds that can be spent on the FSP during that biennium.

Dividing the FY 2008-2009 Sum-Certain total by the estimated number of students to be served, legislators estimated they were appropriating about $4,580 per ADA on average for those two years. The comparable amount for this biennium, if you presume the August payment delay will be made up, is $4,043 or about $537 less per student – a reduction of nearly 12%. If the $2.3 billion delayed August aid is not counted, the estimated actual appropriation per student is $3,797, a cut of over 17%.

Like the appropriated revenues, the initial “Sum-Certain” numbers for each fiscal year in the original appropriations acts were modified by provisions of other bills. Table No. 2 gives the values for the FY 2008-2009 biennium and the FY 2012-2013 biennium.

Table No. 3

Table No. 2 FSP “Sum Certain” Appropriation Original FSP “Sum Certain”

Equity Center InDepth

2012-2013 Biennium

2012-2013 Biennium

FSP “Sum Certain” per ADA (w/ Aug $)

4,580

4,043

40,190,400,000

38,584,900,000

FSP “Sum Certain” per ADA (w/out Aug $)

4,580

3,797

-800,000,000 40,190,400,000

reduction for August 2013 payment delay

FSP “Sum Certain” less August delay

2008-2009 Biennium

2008-2009 Biennium

SB2 SECTION 4(c) reduction Net FSP “Sum Certain”

2008-2009

Making Bricks Without Straw

37,784,900,000

Former Lt. Governor Bill Ratliff once criticized proposed reductions in education funding as asking educators to “make bricks without straw”. While the cuts described above have caused some harm through increased class sizes, reductions in course offerings, layoffs of teachers and other personnel, deferred maintenance and other cutbacks, the full impact has been mitigated by aid from the federal government. Continued on page 10 ...

-2,300,000,000

40,190,400,000

35,484,900,000

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The Unkindest Cuts Continued from page 9 ...

Despite the publicity over Texas’ refusal to compete for significant aid from the federal “Race to the Top” program, the state willingly accepted over $5 billion in stimulus aid last biennium. An additional $830 million in federal “Edujobs” aid for the 2011-12 school year reduced the impact of the first $2 billion in FSP funding reductions for the current biennium by almost half. Using the federal aid together with temporary measures that can’t be repeated indefinitely, like spending from fund balances (which are needed for cash-flow shortages and to preserve credit ratings), many districts were able to soften the blow.

There is no comparable assistance for the coming year, nor is it likely that federal assistance will return when the $5.4 billion reduction is continued in the next biennium, as required by last year’s legislation. Meanwhile, we keep adding students, unfunded legislative mandates (like the new STAAR tests) increase costs and schools face the same inflationary pressures as families and businesses. Only positive action by the next Legislature will restore a firm foundation to public education in Texas.

Texas Taxpayer & Student Fairness Coalition Update E L P M SA

Over 400 school districts have passed a resolution to join the the Texas Taxpayer & Student Fairness Coalition. The Coalition represents more than 40% of the districts statewide and over 1.3 million children.

Even with numbers as impressive as these, we are still encouraging every district in the state to become actively invovled. We’re less than 100 districts away from our Coalition goal of 512 school districts, so if you have not joined we want to let you know it’s not too late. On the right is a sample resolution for you to adapt for your district’s needs. Please contact our office if you would like a word version of this resolution, or if you have any questions. We want to thank those of you who have already joined the Coalition, and encourage you to talk to your neighbors, friends, and family and urge them to Join the Fight!

Lawsuit Details

Travis County Judge John Dietz has set October 22, 2012, as the start date for the upcoming school finance trial. There are now six different groups currently involved in this litigation - five plaintiffs and one plaintiff intervenor. For details on who they are, what they have to say and their legal arguments, refer to the chart on Pg. 11.

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School Finance Lawsuit Texas Taxpayer & Student Fairness Coalition

Edgewood ISD, et al.

Fort Bend ISD, et al.

Calhoun County ISD, et al.

Texas Charter School Association

Texans for Real Efficiency & Equity in Education

WHO THEY ARE

Coalition made up of more than 400 mid-to-low property wealth districts and representing over 1.3 million school children.

School districts Approximately 80 Almost 90 Texas Association Coalition with large school districts, property-wealthy of Charter Schools including Texas portions of including the 8 districts, also and parents Association of low-income and largest. known as Chapter of five charter Business, school English-language41 districts. school students choice advocates, learning (ELL) in Austin, Dallas, and former House students. Houston, and San Public Education Antonio. Chair Kent Grusendorf.

WHAT THEY SAY

Charter schools Underfunding This group Inequities in the Children who do not receive is involved don’t speak the schools has school finance funding for primarily as English at not given local system - which facilities like a defensive home are more districts enough neighboring traditional school measure. Property expensive to choice in whether school districts districts. The wealthy districts educate. The to raise property can have as state also caps its benefitted the taxes or how to much as a $7K state provides charter contracts most from state spend existing difference - hurts per-student at 215. Both the property tax cuts allotments to revenue in the districts with in 2006, because lack of facilities effect, instituting districts that the least property funding and the Texas lawmakers statewide enroll them - but wealth the most, cap are unfair and agreed to make property tax. those haven’t been leaving them with arbitrary, hurting up the difference Also, they don’t updated since higher taxes and charter school in lost school 1984. have adequate fewer funds. students. revenue. resources to meet increasingly rigourous accountability standards.

No one knows how much it costs to educate a Texas student, so how can the school finance system be efficient? Efficiency doesn’t necessarily mean more funding. The state should lift the charter school cap and lessen regulations on public schools.

LEGAL ARGUMENT

Equity remains Focuses on most The system is a chief concern, of the same unconstitutional but it cannot be issues as TTSFC because it forces a achieved without with additional de facto statewide adequacy. This emphasis on ELL property tax, lawsuit focuses and economicallyfunding levels on the issues disadvantaged are inadequate of student students. and it arbitrarily and taxpayer allocates funding inequities, to schools. property taxes operating as state property tax, funding adequacy, and the equal protection clause. Equity Center InDepth

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The system is unconstitutional because it forces a de facto statewide tax and because the state has failed to adequately fund its public schools.

Denying charters the facilities funding available to traditional school districts and limiting their growth by way of the charter cap creates an inefficient system.

The current system is unconstitutional because it is inefficient. The group would like to see a study on costs of educating a child. They also make the property tax argument.

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12th Annual School Finance & Legal Issues Seminar

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F

irstSouthwest, like the Equity Center, is dedicated to supporting Texas school districts. According to MuniAnalytics, we have been the No. 1 ranked financial advisor for Texas ISD bond issues for the past ten years.

Since 1946, FirstSouthwest’s experienced professionals have been helping Texas Chapter 42 school districts achieve their financing and facilities goals. Our extensive experience ranges from planning and executing the bond election process to structuring lease/purchase financing agreements and using non-voted maintenance tax debt. If we can be of assistance to your district, please call or visit us online today. 800.678.3792 FirstSW.com © 2012 First Southwest Company. All rights reserved. Member FINRA/SIPC. PFD0812188

Summer 2012

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Equity Center InDepth


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 communities below goes unrealized. Let’s imagine for a moment the local impact, without ignoring the collateral damage. The Scene: Local school board meeting. The Board is scheduled to vote on raising taxes to the maximum amount. Parents, students, and taxpayers have turned out to voice their concerns and opinions. Board President: Judging by the turnout of tonight’s meeting, I’m assuming most of you have heard the Board will be discussing the possibility of raising our taxes to the maximum amount of $1.17. Before opening up the floor to our public, we’ll first hear from our Superintendent. Superintendent: Good evening Mr. President, members of the board. Since the significant legislative cuts, we’ve taken every possible measure to streamline our budget. Like many of the districts across the state, we have had to become increasingly creative about generating revenue in order to provide services to our students. As you are aware, the District increased class sizes and has taken measure to reduce certain services and supplies. We’ve also examined other possible cost saving measures such as discontinued transportation services to areas within a two mile radius of the schools and the option of charging a transportation fee to parents to help with our growing costs. We’ve also discussed the option to reduce our custodial staff to twice a week and ask our educators to help with their classrooms on the off “It’s like a slow death. days. These additional cost saving options are very similar to ones made by other We’ve been picked school districts. apart and it’s made a tremendous morale In short, our district is still grappling with the mandated cuts and while they issues in the district.” were initially labeled as “temporary” and a “reflection of our current economic environment,” it’s like we’re dying a slow death. We’ve been picked apart and it’s made a tremendous morale issue in the district. [The discussions amongst the audience grow louder with anger.] Board President: {Banging gavel.] Everyone please quiet down. Superintendent, I appreciate your comments, but there is still a lot of concern in terms of raising taxes when the economy is still struggling. So unless you have some miracle solution, I’m not sure how you intend to fix this. [The audience errupts in anger, as many begin shouting at the Board and Superintendent.] Board President: {Banging gavel repeatedly.] Ladies and gentlemen! Ladies and gentlemen! LADIES AND GENTLEMEN! [To be continued ... ] 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 info@equitycenter.org. We will post it in the Member Forum on our website and we may highlight it in an upcoming quarterly InDepth.

Equity Center InDepth

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Summer 2012


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