Texas School Finance–How Did We Get to This Point?

by Dr. Jerry Burkett
Originally Published: February 15, 2012

Many of you have been reading this blog, news sources and other sites to be more informed of the Texas school funding crisis that is facing our state and legislature. The information is scary when we throw around terms like “billion dollar deficit”, “teacher lay offs”, and “financial exigency”.  The reality is that many educators don’t really know how schools are funded in Texas and there is no real reason why they should.  Teachers teach. Period.

Now, they are seeing their schools close and their colleagues lose their jobs all in the name of “not enough school funding”. Why?  How did we get here?  Recession?  Bad economy?  Housing crash?  No.  These are but minor contributing factors to what ultimately became the undoing of school finance in Texas.  All of this began in 2006.  Let me explain.

Let me take you back to the year 1993.  I was a junior in high school.  Good times.  But this was also the year of the birth of “Robin Hood”. I am not talking about our cloaked hero played by Russel Crowe or Kevin Costner (American accent and all). I am talking about the school funding juggernaut that was dubbed “Robin Hood” because it very simply took (recaptured) from rich school districts and gave (redistributed) those funds to poor school districts.  This school funding formula was all done in the name of equality and equity.  Texas was facing a series of law suits in the 1980’s and 90’s that forced the state to provided exactly that–equity and equality–for all Texas schools and their students.  Hence, “Robin Hood” was born.

“Robin Hood” lived quite awhile in Texas and many would argue that it did exactly what it was designed to do.  Provided an equitable and equal education for many of the poorer school districts in Texas.  “Robin Hood” allowed for many schools, that were the focal points of those law suits mentioned in the 80’s and 90’s, to thrive and see some success.

However, let’s look at “Robin Hood” conceptually.  Since school funding is largely based on property tax values and many of those higher taxed properties are in suburban school districts that are community driven and very close-knit, it became a very hard pill to swallow for those suburban districts to have their hard-earned property tax dollars taken (recaptured) from them and given (redistributed) to poorer urban districts. To make matters worse, in order to provide an adequate education for our students, districts began to raise those property taxes and by 2004, most were hitting the state required $1.50 per $100 property valuation cap. These higher taxes were driven by the fact that educating our students was becoming more expensive in the 1990’s and early 2000’s. So, let the law suits begin!

And that is what happened.  By 2004, “Robin Hood” and his band of thieves (recapturers) were on their death bed in Austin and the state legislature had to go back to the drawing board to come up with again, an equitable and equal form of school funding for all students in Texas.

And they came up with a new system…well, they tried.  They gave us our current system which was driven by part necessity and part politics.  Let’s start with necessity.

Taxes were very high and many people disagreed with the conceptual definition of “Robin Hood”. Plus, with the $1.50 cap having been reached by many school districts in Texas, it became necessary to alleviate the burden.  So, let’s cut those taxes by 1/3. Yes, 1/3. This lightened the tax burden on citizens. But, we still have to provide for students–equal and equitable–so, everybody sends in their money and that money is given back to the school districts based on very complicated formulas that I will not explain here.  To put it simply, some school districts have students with higher needs than others. Those higher need districts get a little bit more money (Google: “WADA or Weighted Daily Attendance Average”)

Seems a little more fair, right?  Everyone pays their share and the money is given out based on need.  Plus, local school districts can still pass bond elections and raise their local tax rate (a very small amount) to raise local revenue.  Not a bad deal.  But, the state was well aware of this and established a provision in the new funding system that said that if your local property values go up, you don’t need that much money from us.  So, property values go up=less allocations from the state.  The inverse is true as well.

In fact, the only way the state is going to give you more money is if your student population goes up. Your weighted average daily attendance will not be reconfigured.  So, for 2011, school districts have to operate on a system that is figuring school funding based on what was established back in 2006.  IT HAS NOT CHANGED!

Now, the politics. I’ll just make a list for you:

  1. Governor Rick Perry ran in the 2006 election on a platform of “I lowered your property taxes”.  He did not mention that it had to be done or any of the other stuff that I mentioned earlier. He needed the votes and the confidence from the voters and he won.
  2. This funding system was designed to be a temporary fix.  It was obvious to the state comptroller at the time, Carolyn Keeton Strayhorn, that the state had created a structural tax deficit for school fundings.  How can you take 1/3 away and still expect the districts to perform?
  3. The cost of education has increased steadily and that funding has not been available to keep up with demand.
  4. A business franchise tax was put into place to help recapture more funds to take the place of the missing 1/3 and it did not generate enough revenue.  To make matters worse, certain business were exempted from the tax in 2008 hence producing even less funds.
  5. Aside from money provided for student enrollment growth, the only way for districts to access additional funding is by asking local voters to approve a tax rate increase or asking the Legislature for more resources.
  6. The school finance system is not adjusted for current instructional requirements and rising performance standards.

What the State of Texas has left us with is a structural tax deficit that does not seem to have plans of going away any time soon.  Schools need more money to simply meet the needs of students as it cost more in 2011 as it did in 2006 to educate our kids.  No adjustments were built into the system to address this reality.