the 29—month legislative session texas impact - february 16, 2015 presented by the

The 29—Month Legislative Session

Texas Impact - February 16, 2015 Presented by the

Equity Center 2

Center for Equity and Adequacy in Public School Finance

• Research in Texas School Finance• Provide Expert Testimony in School

Finance Litigation• Testify before Legislative Committees• Lobby for Fair and Adequate Funding

for all Districts• Lobby for Fair Treatment of Property

Taxpayers• Provide a resource to Legislators,

Reporters, General Public, School Boards and Administrators

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The Texas Taxpayer & Student Fairness School Finance LitigationTimeline & Findings

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Texas Taxpayer & Student Fairness Coalition, et al. vs. Williams, et al.

• Spring 2011—Legislature cuts public education by $5.4 billion• Including the lowest funded districts at maximum tax rates

• Summer 2011—Initial meetings to discuss whether litigation was only viable option• October 11, 2011—Fairness Coalition files suit• October 22, 2012—Trial begins• February 4, 2013—After 45 days of trial, Judge Dietz rules from the

bench that the Texas school finance system is unconstitutional on three counts:• Lack of equity/efficiency• Lack of resources to fund a general diffusion of knowledge (GDK)/Adequate

Funding• De facto state property tax2/16/2015

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• Judge Dietz, however, does not issue a Final Decision with Findings of Fact and Conclusions of Law before the end of the 2013 Legislative Session• Legislature restores $3.4 billion—the right way• Funded Regular Program Allotment at 100%

• 2 years ahead of schedule• $1 billion for the biennium

• Increased Basic Allotment/Equalized Wealth Level• $2 billion for the biennium

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• After the actions of the 83rd legislature, the Court granted a motion to reopen the evidence to update the record• The Court held an evidentiary hearing that began on January 21, 2014

and ended on February 6, 2014

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• June 2, 2014—Attorney General Abbott filed to have Judge Dietz recused from the case for bias.• Judge Dietz immediately refused to step down; Visiting Judge David

Peeples was assigned to rule on the motion • June 23, 2014—After a one-day hearing, Judge Peeples ruled: “The

circumstances shown by the evidence do not justify recusal.”

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• Thursday, August 28, 2014—Judge Dietz released 400+ page decision declaring the system to be UNCONSTUTIONAL

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District Court Decision

• “Based upon the competent evidence admitted at trial (both the main trial and upon the reopening of evidence)...”• Inequitable

• Inadequate

• Unsuitable

• De facto State Property Tax

• July 15, 2015 deadline to fix the system• Bond Payments excluded from deadline

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District Court Decision—Equity

• 1. All Texas students do not have substantially equal access to the educational funds necessary to accomplish a general diffusion of knowledge.

• 1. The Texas school finance system is structured, operated, and funded so that it is impossible to achieve a general diffusion of knowledge in a financially efficient manner.• 2. A direct and close correlation between a district’s tax effort and the

educational resources available to it does not exist. • 3. There are large gaps in funding levels and tax effort between low-

property wealth and high-property wealth districts.

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• 4. Children who live in poor districts and children who live in rich districts are not afforded a substantially equal opportunity to have access to educational funds.• 5. The system does not provide similar revenue at the same tax rates for

maintenance & operations and facilities funding. • 6. Low and high-property wealth districts have vastly different access to

facilities funding which is part of the inefficiency and inequity of the system.

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• 7. Target Revenue makes it impossible for the system to be equalized to accomplish financial efficiency. • 8. Property wealthy districts are able to access substantially more funding

at all levels of the system with lower tax rates. • 9. Unequal local supplementation in the system destroys the efficiency of

the system.

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District Court Decision—Adequacy

• 2. The Legislature has structured a school finance system that cannot and has not accomplished a general diffusion of knowledge for all students.• 1. According to tests results, graduation rates, dropout rates, etc., Texas

public schools are not accomplishing a general diffusion of knowledge due to inadequate funding.

• 2. The cost of meeting the constitutional mandate of adequacy exceeds the maximum amount of funding that is available to them at both the $1.04 M&O tax rate and the maximum $1.17 M&O rate.

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• 3. The Legislature violated the ‘arbitrary’ standard described in West Orange Cove II by ‘defining the goals for accomplishing the constitutionally required general diffusion of knowledge’, and then providing ‘insufficient means for achieving those goals.

• 4. Economically disadvantaged students and English Language Learner students are not achieving a general diffusion of knowledge and that the cost of providing a general diffusion of knowledge to these students exceeds the amount of funding made available.

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• 5. Current facilities funding is constitutionally inadequate to suitably provide sufficient support for districts to maintain, build, and renovate the classrooms necessary for an adequate education. This constitutional infirmity exacerbates the problems resulting from inadequate M&O funding because many districts are forced to use those scarce funds to make up for unfunded facilities needs.

• 6. M&O and I&S funding available…as a whole is insufficient to achieve a general diffusion of knowledge.

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District Court Decision—Suitability

• 3. The Legislature has failed to meet its constitutional duty to suitably provide for Texas Public Schools• The system is structured, operated and funded so that it cannot provide a

constitutionally adequate education for all Texas schoolchildren.

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District Court Decision—State Property Tax

• 4. The system imposes a state property tax in violation of Article VIII, Section 1-e• School districts do not have meaningful discretion over the levy,

assessment, and disbursement of local property taxes.

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District Court Decision—The Supreme Court• The Texas Supreme Court has granted The Attorney General and

Calhoun County Plaintiffs appeal of the District Court Decision and agreed to hear the case• Oral arguments are expected to occur in late summer or early fall of 2015• The Supreme Court’s decision will follow (maybe late fall 2015 or early 2016)• If any of the District Court finding are upheld, then the Supreme Court will

establish a timeline for the Legislature to correct the areas they deem unconstitutional

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Second Class ChildrenThe state funding system touts a belief in equal revenue for equal tax effort, but the statement is far from true. It seems that when it comes to equal, some children and taxpayers are more equal than others.

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A Funding Comparison of the 100 Wealthiest and 100 Poorest Texas School Districts

• Much of school finance in Texas is determined by district property wealth or hold-harmlesses that are based on decades old revenue levels that, in turn, were based on past property wealth.• The following analysis is based on Near Final student and district data from the

2013-14 school year because statewide data for the current school year are merely estimates.• However, all of the funding parameters for the 2014-15 school year are known

and were applied to the 2013-14 data for this analysis.• For example, the basic allotment was increased from $4,950 to $5,040 this

year.

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A Funding Comparison of the 100 Wealthiest and 100 Poorest Texas School Districts

Poorest 100 Districts Wealthiest 100 Districts0%

10%

20%

30%

40%

50%

60%

70%

62% 39%34% 55%

Hispanic White

Perc

enta

ge

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Less Revenue per Weighted Student (WADA)

Poorest 100 Districts Richest 100 Districts$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

$8,000

$9,000

$5,907

$8,548

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Higher Average Tax Rates


$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

$8,000

$9,000

$1.00

$1.02

$1.04

$1.06

$1.08

$1.10

$1.12 $1.11

$1.00

Funding per Weighted Student (WADA)2013-14 M&O Tax Rate

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Local Option Homestead Exemptions

Poorest 100 Districts Wealthiest 100 Districts0

10

20

30

40

50

8

52N

umbe

r of D

istr

icts

Gra

nting

LO

HEs

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Less Revenue per Weighted Student (WADA)


$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

$8,000

$9,000

$5,907

$8,548

Funding per Weighted Student (WADA)

$2,641 Less

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Classroom Funding Disadvantage

If the poorest 100 Texas school districts were funded at the same level the state readily funds the wealthiest 100 districts, they would have an additional …

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$91,688

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$91,688per typical elementary classroom

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and reduce their M&O tax rates by 11 cents

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Classroom Funding DisadvantageIf the poorest 100 Texas school districts were funded at the same level the state readily funds the wealthiest 100 districts, they would have an additional …



and give a Local Option Homestead Exemption to Homeowners on their property

tax, reducing their taxes even more2/16/2015

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Classroom Funding DisadvantageIf the poorest 100 Texas school districts were funded at the same level the state readily funds the wealthiest 100 districts, they would have an additional …



and give a Local Option Homestead Exemption to Homeowners on their property tax, reducing their

taxes even moreEVERY YEAR!

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The 84th Texas Legislature and School Finance

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The 84th Legislature

• Key School Finance Issues• Address issues now or wait for Supreme Court to rule?

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• Key School Finance Issues• Address issues now or wait for Supreme Court to rule?• Some want to wait for direction from SC

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• Key School Finance Issues• Address issues now or wait for Supreme Court to rule?• Some want to wait for direction from SC• Some want to address issues now

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• Key School Finance Issues• Eliminate the non-cost based inefficiencies in the system• Use of Prior Year Values• Target Revenue• Wealth Hold-Harmlesses and other options that benefit only wealthy

districts• High school allotment• Assorted other “band-aids”

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• Key School Finance Issues• Use funds recovered by eliminating inefficiencies and any new

funds available in an efficient manner that improves the equity and adequacy of the system• Increase the Basic Allotment• Eliminate the Small District Adjustment Penalty• Fully Fund the Cost of Education Index (CEI)• Make the Yield for each Penny of Tax Effort Uniform• Update the various Student Weights in Formula

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Equity CenterStanding Up for Texas Taxpayers and

Children

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the 29—month legislative session texas impact - february 16, 2015 presented by the

Documents

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