Moak, Casey & Associates

STATUS OF SCHOOL FINANCE LITIGATION

Lynn Moak, Moak, Casey & Associates

January 20, 2012

Moak, Casey & Associates

Status of Litigation

Causes of Action: Adequacy: Rising standards and funding cuts

leave insufficient revenue to provide the GDK. Meaningful discretion: Remaining tax rate

capacity is insufficient to offset for funding cuts, and provide meaningful discretion to enrich.

Efficiency/Equity: Target revenue disparities in combination with unequalized funds produces unconstitutional student / taxpayer inequity.

Rationality: The state has failed to provide a rational system based on appropriate cost adjustments and structure

January 20, 2012

Moak, Casey & Associates

Adequacy

How good does our education system have to be to meet the general diffusion of knowledge standard of the Texas constitution?

Is the cost of adequacy under the current system a suitable subject for judicial determination?

How do the evolving state standards work into the equation?

Do the outdated cost measures impair the adequacy of the system?

January 20, 2012

Moak, Casey & Associates

Equity

Is the degradation of system equity since 2004 severe enough to warrant court intervention?

What weight does the state commitment to eliminate target revenue by 2017 have?

Should the yield for debt service be included in the court’s analysis of tax equity?

Given the standard of equity up to the GDK level, should the lack of recapture for a portion of “enrichment” be considered?

January 20, 2012

Moak, Casey & Associates

Meaningful Discretion

Do the revenue reductions of the 2011 Legislature offset the “meaningful discretion” afforded by $1.17?

Do districts at $1.17 have meaningful discretion to enrich?

Should the effective combination of limited voter appeal and the potential for recapture be considered in the analysis?

January 20, 2012

Moak, Casey & Associates

Rationality

Does a separate but unequal funding scheme constitute “suitable” and “efficient” provision?

Does the use of 1980s’ weights and adjustments provide the state with a rational basis for funding public education?

Are the state long term commitments to adjust standards and financing sufficient?

January 20, 2012

Moak, Casey & Associates

Litigation Timing

Four groups have filed Discovery process underway District court ruling sometime in fall Supreme Court could direct brief

rehearing after the 2013 legislative session

January 20, 2012

Moak, Casey & Associates

Closing Lawsuit Observations

Constitutional challenges as an element in a larger debate

Proclivity of the court to grant state discretion in all but clear “out of bounds” situations

Need for a clear constitutional priority for public education funding

Beware of the request

January 20, 2012

Moak, Casey & Associates

Growth in District Revenue 2005-2009

January 20, 2012

2004-05 2005-06 2006-07 2007-08 2008-09 2009-10$0

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000Revenue per Enrolled Student by Source

State per Student Local Tax per Student Other Local per Student Federal per Student

$8,349

$9,388 $9,739 $9,965$10,327

$8,768

Moak, Casey & Associates

Texas in National Rankings on Public Education Spending

NCES data on Texas current expenditures per pupil in membership 1997-98: $5,444 - ranked 36th among the

states 2008-09: $8,562 – ranked 43rd among the

states

Enrollment growth/school construction costs may serve to keep current expenditures lower than in some other states

January 20, 2012

Moak, Casey & AssociatesJanuary 20, 2012

Moak, Casey & AssociatesJanuary 20, 2012

Moak, Casey & Associates

Amanda Brownson, Ph. D.Dee CarneyChris GrammerBob PopinskiLarry ThromMaria Whitsett, Ph. D.Joe Wisnoski

Lynn M. Moak

Daniel T. CaseyPartners

Kathy MathiasLarry Groppel, Ed. D.

Thomas V. Alvis, Ph. D.Consultants

Susan MoakKari Ruehman

Administrative Staff

400 West 15th Street, Suite 1410, Austin, Texas 78701-1648Ph. (512) 485-7878 Fax (512) 485-7888

www.moakcasey.com

January 20, 2012