Rich or Poor, Everybody is Losing in Texas School Finance

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AHISD Superintendent Kevin Brown gives his remarks prior to the presentation. Photo by Scott Ball.

Scott Ball / Rivard Report

Alamo Heights Independent School District Superintendent Kevin Brown gives his remarks prior to a presentation in January 2016.

The current state finance system is not good for any Texas students, according to Alamo Heights Independent School District Superintendent Kevin Brown. The shortcomings for low income communities are more obvious, but many people do not realize how the current system shortchanges students in property-wealthy districts as well.

According to Brown, the current school finance system increasingly relies on small, property-rich districts to fund the state’s financial obligations to property-poor districts.

The result, rather than creating a fair and level system, is that inadequate funds are recirculated among school districts, and no one is getting the level of state funding they need.

Brown serves as president of the Texas School Coalition (TXSC), one of the plaintiffs in the 2011 lawsuit dismissed by the Texas Supreme Court in May 2016.

The TXSC represents 140 districts subject to increasingly burdensome recapture practices, which, according to Brown, have replaced funds the state promised to contribute to property-poor districts.

When the recapture program started in 1993, better known as “Robin Hood,” a mere 33 districts fell into the income bracket the allowed the state to redistribute a portion of their locally collected taxes to other districts. It was meant to be an additional revenue stream as the state ensured equitable funding for districts who could not meet adequate funding through their local taxes, due to low property value.

The parameters were laid out in Chapter 41 of the Texas Education Code.

This would seem equitable, explains Brown, except that the state stopped updating their formula to account for rising property values, and the number of districts entering recapture, and the amount those districts pay, has exploded. Districts no longer have to be all that wealthy to enter recapture. 

“Today, we have 448 districts that qualify as Chapter 41 districts for the 2016-17 school year, with approximately 250 of those expected to pay recapture.  The annual amount of recapture paid by districts exceeds $1.5 billion,” a TXSC document explains.

AHISD sends 50% of their revenue, $34,225,947 for 2016-2017, to the state under Chapter 41.

The parents of AHISD have proven that they are willing to pay for educational programs, Brown said, but with the state system set up the way it is, increasing local funding is actually difficult.

Currently Alamo Heights taxes at rate of $1.06. The $0.06 cents over the base rate ($1) are called “golden pennies” which means they get to keep all revenue generated by that tax burden.

Every penny that they increase the tax rate about $1.06 will be a “copper penny” and will be subject to recapture at such a rate as to make the issue politically unviable.

Whereas when San Antonio ISD gets double its value for every copper penny, Alamo Heights gets about half. SAISD voters have every reason to vote for a tax increase if they want a bang for the their buck. AHISD voters might as well just donate the money to the school.

That’s increasingly what they do. Booster and community money accounted for $813,000 in the AHISD budget for the 2016-17 school year. This money goes toward the districts maintenance and operation (M&O) budget, not enrichment or “above and beyond” projects, Brown said.

“What we want for our children is far and above what the state will provide funding for,” Brown said.

Things are about to get even worse.

In 2006, the state reduced districts’ allowable tax rate from $1.50 per $100 of property value to around $1. In property rich district, the revenue generated by the additional $0.50 was significantly more than in property poor districts. They had more to begin with, but they had a bigger loss to recoup after the cuts.

District revenue loss across the state was so significant, the legislature introduced the Addition State Aid for Tax Reduction (ASATR).

ASATR was designed to ensure the districts would receive the same per-student funding as they did for the 2005-2006 school year. For those districts that lost a lot of money, ASATR was a critical piece of their budget.

In 2011, the legislature made even more drastic cuts, including percentage cuts to ASATR. A full repeal of ASATR is scheduled to go into effect September 1, 2017. 

It’s easy to dismiss the financial woes of a district that can even raise booster money, and whose property wealth is so high that they are in the top 5% of Chapter 41 schools. However it’s also easy to understand the frustration of a community paying over $68 million in taxes and adding booster support while still seeing budgets run a deficit. AHISD’s projected deficit for the 2016-17 school year is $558,068.

Brown has done everything he can to change that. To reduce the budget to fit the revenue would mean cutting even more teacher jobs, which would mean even larger class sizes. Currently classes run 28+ at the secondary level. Reducing the budget would mean cutting vital support staff. In short, it would mean compromising the quality of AHISD education, which is one of the primary reasons families choose to move to Alamo Heights in the first place.

The administration is already as lean as Brown can get it. They increase their budget only 0-2% every year, which means support staff cuts and no pay raises. After years of sweating and stretching to make ends meet, in 2017 the district will finally catch up to 2011 funding levels. Then, of course, there’s inflation. 

Brown has a wishlist of what would be possible with more funding.

AHISD outlined a strategic plan that included language programs, increased counselors and nurses, and funding for the nationally recognized rocketry program. The rocketry program currently relies on fundraisers.

In 2011, the district cut teachers and custodial staff. Brown would like to see those positions restored. AHISD personnel have also not seen pay raises to keep up with inflation.

AHISD is not the only property-wealthy district feeling the financial burn.

The state’s inequitable funding pits districts against each other in some ways, which distracts from the fact that it is not paying into the system the way that it should.

Originally, under the Gilmer-Aikin Act in 1949, locally raised property taxes were intended to supplement the funds from the state. Over the years the state simply didn’t hold up their end of the bargain. Brown, like others, can’t tell you where the money is in the state budget. Lawmakers are quick to offer the patronizing answer, “we simply don’t have the money” like parents telling their children that they are in for a lean Christmas.

However, the state regularly experiences multibillion dollar surpluses, which are then translated to tax-cuts, and/or put in the rainy day fund.

“Texas spends money on education, just not the right amount the right way,” State Rep. Diego Bernal (D-123) explained. “The constant lamenting of a limited budget is a fallacy; budgets are a list of priorities. You don’t leave $6 billion unspent, cut another $3.8 billion in taxes, spend $800 million on ‘border security’ and then say there isn’t enough for school children.”

Even with the lack of funding, Texas students actually do well on the National Assessment of Education Progress (NAEP) test, an international test given to a random selection of 4th and 8th graders. Texas students scored above average.

“Just think what we could do with more funding,” Brown said.

Underfunding looks different, admittedly more dire, in property-poor districts, admits Brown. However his point is that in this case the state doesn’t favor the rich districts over the poor districts. It’s public education as a whole that’s being shortchanged.

One thought on “Rich or Poor, Everybody is Losing in Texas School Finance

  1. “Underfunding looks different, admittedly more dire, in property-poor districts, admits Brown. However his point is that in this case the state doesn’t favor the rich districts over the poor districts. It’s public education as a whole that’s being shortchanged.”

    public education as a whole is being shortchanged but there’s no comparison between students needing a non-leaking roof and those whose rocketry program has been reduced to depend upon fundraising. we’ll never resolve disparities in education without addressing our overall societal disparities, and there we hit a roadblock. because in order to cater to special interests and zealotry, our texas government works in silos- and to come up with workable solutions we must first factor in the lack of affordable housing for both teachers and families as well as the astounding number of texans lacking healthcare- and that’s just for starters.

    after affordable safe housing and access to healthcare, disadvantaged students need the very same things their counterparts from established affluent, master planned and gated communities receive automatically. things like ancillary and extra-curricular activities, after school, tutoring and college-prep programs and cultural enrichment. privileged students clearly are entitled to the best of what their family’s money can buy and nobody should begrudge them having unlimited amounts of it.

    but their parents have the networking capabilities for fundraising to keep up those rocketry programs- the professional clout to garner foundation and nonprofit resources and access to the elite social circles to keep it all going. therefore i can see no answers to the inequities of public education until we elect a statewide government that acknowledges the magnitude of underlying causes such as healthcare and housing, and commits to workable solutions that immediately improve the lives of all texas families.

    chants of “level the playing field” and “share the wealth” are no longer tolerable to today’s prosperity driven conservatives which i find annoying. because at both ends of their fringe they fully understand and incorporate both of these concepts into their recreational activities- from the country club golfers to the misfits on the weekly bowling team- prosperity conservatives fully appreciate the need to level their own “playing fields” by calculating and applying scoring “handicaps”. and yet these benevolent hobby enthusiasts may be reliably observed griping and moaning about throwing “more” money at public education for other people’s kids.

    so my only advice is let’s dismantle the silos, roll up our collective sleeves and draft a new resolution to arrive at a consensus about what constitutes the texas values of a free and appropriate education for all texas school children. and that in itself would be an amazing and promising start.

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