City Summit Reexamined: Public School Finance and the Return of Robin Hood
In 2011, the Texas Legislature cut $5.4 billion from public schools in order to balance the state’s fiscal budget. The severity of the cuts was felt throughout the state and forced independent school districts to make difficult budgetary decisions.
The cuts prompted two-thirds of school districts in the state to file a lawsuit that was heard by Travis County District Court Judge John Dietz in 2014 and the Texas Supreme Court in 2016.
Texas Supreme Court Ruling
In 2016, the Texas Supreme Court unanimously ruled that the state’s public school finance structure was constitutional, but policymakers were advised by the court to introduce top to bottom changes in their approach to funding public education.
The Texas Supreme Court decision was in direct disagreement with Dietz’s ruling, which sided with school districts and ruled the Legislatures existing structure does not deliver necessary funds to schools districts. This was the third time Diez had made such a ruling.
An Outdated System
In December 2016, Glasshouse Policy, The Austin Monitor and KUT hosted the Public School Finance and the Return of Robin Hood panel at City Summit to give members of the public a preview of what the education debate might look like when the legislature returned. Texas State Rep. Gina Hinojosa, AISD CFO Nicole Conley, Chairman of the Texas House Education Committee Rep. Dan Huberty and Vice-Chairman of the Texas House Education Committee Rep. Diego Bernal convened to discuss the budgetary issues surrounding the state’s school finance system.
The panel discussed three main challenges with the current system.
Recapture, or “Robin Hood” as it’s commonly referred to, is the state’s method of accruing a percentage of property tax revenue from wealthier districts and reallocating it to less wealthy ones. Texas State Rep. Gina Hinojosa said the intentions of this legislation were to raise the quality of education in Texas, but she said the system as it stands today has dramatically outgrown itself.
AISD CFO Nicole Conley explained that AISD is the single largest payer into recapture, giving 12.2 percent of the total recapture revenue the state collects. Although the city’s taxpayers pay more than $1 billion to AISD, the district retains less than $700 million and collects only $37 million in state support. Conley said this year AISD will send approximately $406,100,000 to other Texas school districts under recapture, and the following year it will rise to over $500,000,000. If the district wasn’t paying into recapture, she said they could reduce their tax rate by $.35, which is almost $1,400 for the average Austin taxpayer.
Cost of Education Index (CEI)
The Cost of Education Index (CEI) is a complicated funding formula used by legislators to allocate money to school districts throughout the state. Texas has not updated its CEI since it was commissioned during a special session in 1984 and finally updated in 1991, leaving school districts across the state with an outdated baseline for funding. Rep. Hinojosa and Rep. Bernal expressed concerns that this structure is no longer capable of capturing an accurate picture of students in the state.
Rep. Bernal said there are far more students going to school in Texas now compared to 1991, and more of them are not native English speakers or are living in poverty, which means they require more financial assistance from the school district. Rep. Hinojosa said updating the CEI to reflect current district characteristics would allow help districts like Austin because it would accurately reflect the higher cost of living the city has compared to surrounding districts. It would also allow underprivileged districts to have more access to accurate levels of funding.
Conley said she hopes to see the outdated formula elements updated by the legislature. However, Rep. Huberty said he wasn’t optimistic the legislature would be able to address the CEI during this session, though he did say the formula was in need of restructuring after more than 20 years.
In addition to basic funding, Rep. Diego Bernal said the State of Texas gives further monetary aid to school districts for students in need further assistance in the classroom. This additional funding is referred to as a “weight” and is allocated based on a variety of student needs, including special education, bilingual education, gifted and talented programs and resources for low-income schoolchildren.
Rep. Diego Bernal said many of the weights have not been updated since the 1980’s, and as the number of these kids grows in the state it is becoming more expensive to educate them. He proposed a cost of education for all of the current weights to allow school districts to work with the legislature to set the weights at a reasonable and justifiable level that truly reflects the cost of those additional services.
Rep. Huberty said he wanted to set realistic objectives going into the session to accomplish goals given what the state has to offer financially. While he didn’t seem to think the legislature would be rebuilding the entire system of weights, he suggested a .12 weight for the states 140,000 dyslexic students that he said would generate about $35 million a year to go into the schools. He discussed the disparity among school districts that account for these students and said the state currently gives no money to help soften the burden. Rep. Huberty said he is also hoping to see special education funding reviewed by the legislature.
On Feb. 9, Texas House Speaker Joe Straus announced committee assignments for the 85th Legislature, which revealed the Public Education Committee will be headed by Chairman Rep. Huberty and Vice Chairman Rep. Bernal. The two representatives previewed their vision for the session during City Summit, and their committee assignment ensures it is not the last time we will be hearing about the ideas discussed in this post.