My Kid is Worth More Than Your Kid: A Tale of Inequity in School Funding

Originally posted July 2011
by Dr. Jerry R. Burkett

Under the current Texas school funding system of formulas, my child is worth more than yours.

When he starts school next fall, he will be worth $6,830 annually to Northwest ISD, which is an average based on a complicated formula known as WADA (Weighted Average Daily Attendance).

WADA is calculated by taking the number of students in the district and multiplying that number by weights to establish funding for children in the district that require more funds to educate. These weights are applied to students who are labeled as gifted and talented, special education, or economically disadvantaged.

We live less than two miles from the neighboring school district of Keller ISD. If we decided to move and send our son to Keller ISD, he would only be worth $5,039. Both school districts hold the same school tax rate of $1.04 per $100 home valuation*. So how is it that two neighboring districts with similar home values and student demographics receive a near $1,800 disparity per child?

These funding formulas are the result of long legal battle remains from the “Robin Hood” school funding system that died in 2003. To make school funding more equitable, these target revenue funding formulas were established with a property tax provision. For more on “Robin Hood,” click here (How did we get to this point?).

As property values in the district increase, the state will send less funding per WADA to the district with the assumption that local property taxes will make up the difference.  The reverse is also true; as property values go down in the district, the state will send more money per WADA to the district.

Furthermore, these districts would only be funded at the 2005-06 level and only legislative action can change that provision. As such, districts have been receving the same amount of money per WADA since 2005-06.

So, why the budget gap in education?

The assumption by the state legislature in 2005-06 was that local property values would make up the differences in funding as more students entered the district and property values increased. However, that was when the maximum tax rate a school district could collect locally was $1.50.

In 2006, Governor Perry, despite pleas from the republican Comptroller of Public Accounts, Carole Keeton Strayhorn, lowered the tax rate from the $1.50 cap to $1.04. In other words, the property tax rate was cut by 30%, forcing school districts into a position to have to make up the difference locally through increased property values, increased student enrollment, or asking the citizens of the district for a Tax Ratification Election to allow the district to collect up to $1.17.

Texas gubernatorial election, 2006
Image via Wikipedia

This level of inequity exists across the state in variety of scenarios:

Location:
San Antonio ISD–$5,036 per student and tax rate of $1.04
Alamo Heights ISD–$6,243 per student and tax rate of $1.04

Size:
Glen Rose ISD–$8,424 per student and tax rate of $0.825
Diboll ISD–$4,881 per student and tax rate of $1.04

Tax Rate:
Austin ISD–$6,171 per student and tax rate of $1.079
Amarillo ISD–$5,094 per student and tax rate of $1.80

Revenue:
Lamar Consolidated–$5,475 per student and tax rate of $1.02
Calallen ISD–$5,475 per student tax rate of $1.17

(Un)Intended Results
These funding formulas, combined with the compressed tax rate from 2006, has forced school districts to reduce and cut expenses very slowly over the course of the last five years. It has placed superintendents in the position of essentially panhandling citizens of their districts to make up revenue shortfalls, with the ability to only ask for 1/3 of what they were building budgets on just five years ago.

All of this occurs at a time when the state of Texas is educating more students than ever before — nearly 10% of all public school students in the United States.

*Keller ISD holds a higher overall tax rate due to its bond debt.

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