Texas Education Reform : History and Finance

1) 1950’s: Brown case – gradually a commitment to educate all children and to keep
them in school. Costs began to rise.
2) White starts reform effort – raises SAT scores
a. SAT scores increased by twelve points, Texas first graders improved in
statewide tests and teacher salaries increased by $5,000.
3) Members of the 68th Legislature passed a historic education-reform bill in the
summer of 1984. House Bill 72 came in response to growing concern over
deteriorating literacy among Texas' schoolchildren over two decades, reflected in
students' scores on standardized tests.
a. Provisions of HB 72 raised teachers' salaries, but tied those raises to
teacher performance. It also introduced more stringent teacher certification
and initiated competency testing for teachers.
b. national norm-referenced testing throughout all grades to assure parents of
individual schools' performance through a common frame of reference.
http://www.texasalmanac.com/education/
4) 74th Legislature passed the Public Schools Reform Act of 1995
a. Texas Education Agency is to administer an accountability system;
creating and implementing the student testing program;
b. The TEKS were developed by a writing team composed of 35 social
studies teachers and supervisors, campus administrators, college and
university professors, members of business and industry, and parents. The
29 educators appointed to the writing team in February 1995 had a
combined total of 427 years of social studies teaching experience in
Grades K-12 at the time of their appointment.
5) Texas students, beginning with the Class of 1987, have been required to pass an
exit-level exam, along with their courses, in order to receive a diploma from a
Texas public high school.
6) Beginning with the Class of 2005, Texas students must pass the exit-level Texas
Assessment of Knowledge and Skills (TAKS) to meet this graduation
requirement. TAKS, which is the most rigorous graduation test ever given to
Texas students, covers English language arts, mathematics, science and social
studies.
7) To give Texas residents a sense of how schools are performing, the state has
issued ratings for its public school districts and campuses since 1993. The new
system is based on state test scores and high school completion rate.

Finances of Texas Schools

1) In 1949, the Texas Legislature adopted the Gilmer-Aikin Act, which prescribed
the reorganization of state education administration. The Gilmer-Aikin Act also
established the "Minimum Foundation Program," which created a funding system
that provided revenue for education from both state and local sources.
2) Presently education in the state of Texas funded in the following way. The state
decides on a figure necessary for an adequate education. It then pays 50% of that
amount to the districts from state revenues. The local districts then make up the
other 50% from local tax revenues. Problem: inequities : some districts had
extensive commercial enterprise properties to tax, others did not!
3) Robin Hood [ put in place in 1993] was recapturing $1.2 billion per year from
134 school districts by 2004. The Texas Legislature budgets those recaptured
dollars and uses them to fund the Foundation Program of finance.
a. January 1995, that the law was constitutional at the time, but could
become unconstitutional unless changes were made in the law over the
next several years. Senate Bill 7 mandated that all districts having a wealth
per weighted student (WADA) exceeding $280,000 must give up that
excess wealth in one of several manners:
b. 1. consolidation with a property-poor district such that the combined
wealth is less than $280,000 per WADA;
c. 2. tax base consolidation with a property-poor district such that the
combined wealth is less than $280,000 per WADA;
d. 3. purchase of attendance credits from the State to reduce the wealth
to less than $280,000 per WADA;
e. 4. purchase of attendance credits from a property-poor district to
reduce the wealth to less than $280,000 per WADA; or
f. 5. disannexation of property from a property-wealthy district to
reduce the wealth to less than $280,000 and attachment of that property to
a property-poor district.

4) During the 1990’s dissatisfaction with recapture mounted. At the same time,
modest state funding increases were not keeping pace with the cost of education
in Texas.

a. State also pushing over 100 unfunded mandates unto the schools as well.
b. To meet revenue needs of districts, school boards raised property tax
rates. In fact, by 2003, nearly 690 school districts were at or near the
statutory maximum tax rate of $1.50. This, in turn, sparked litigation to
overturn the system because of high taxes and inadequate funding..

5) Effect of Special Session on finance:

a. Monies from the state 8.5 billion surplus used to buy down property taxes
to 1.00 per 1,000
b. School districts were allowed to rise property taxes up to 1.04 per 1,000 if
they thought necessary.
c. Really is necessary for poorer districts because Foundation Grant money is
always short – not adjusted for inflation or student population growth.
d. Gave teachers a one time 2,000 rise. Still 38th overall in salary, 50th if
compared to salary given to professionals
e. Created teacher incentive pay scheme
 f. Under the new law, the commissioner can replace the entire staff at any
campus that is rated academically unacceptable for two years in a row. A
campus intervention team appointed by the commissioner would
determine which employees would be removed, with the principal
automatically removed. The team would run the campus until it was rated
acceptable.

g. The change begins with the recently completed 2005-06 school year.
Although this year's ratings won't be out until next month, a total of 364
campuses – including 51 charter schools – were graded academically
unacceptable a year ago. If similar numbers are poorly rated this year,
thousands of teachers and principals could be replaced in summer 2007.

h. And if a campus continues to receive poor ratings for two years after state
intervention, the commissioner must turn over management of the school
to a nonprofit education entity or order closure of the school. The
commissioner can take similar actions against a school district for multiple
years of poor academic or financial ratings under the state's accountability
system.

i. The changes signal a shift in power not only to the education

commissioner, but also to the governor, who appoints the commissioner,
said Richard Kouri of the Texas State Teachers Association. Dr. Neeley
was appointed by Gov. Rick Perry.

Education (50th = lowest, 1st = highest)

< Percentage of Population Graduated
from High School13 46th
< High School Completion Rate14 45th
< State Aid per Pupil15 41st
< Secondary Teachers with Degrees in the Subjects
they Teach16 45th
< Average Teacher Salaries17 30th
< Percent of Adults with at Least a Bachelor’s Degree18 27th
< Scholastic Assessment Test (SAT) Scores19 47th

6) Problem: inequities in school finance:

Before Equalization in Texas…

$14,000,000 Amount of property $216,990 Average
wealth per pupil in expenditures per
 the richest school classroom in the 100
district wealthiest school
districts
$20,000 Amount of property $89,340 Average
wealth per pupil in expenditures per
the poorest school classroom in the 100
district poorest school
districts
700 to 1 Ratio of this
difference
47¢ Average tax rate in $7,233 Average
the 100 wealthiest expenditures per
school districts student in the 100
wealthiest school
districts
47¢ Average tax rate in $2,978 Average
the 100 poorest expenditures per
school districts student in the 100
poorest school
districts
Source: Cárdenas, José a. 1985-96 State District Trial Court Records, Texas School Finance Reform: An
IDRA Perspective (San Antonio, Texas: Intercultural Development Research Association, 1997

7) In 1990, the Texas Legislature was convened in a special session and passed
Senate Bill 1, which provided more money for equalization, but essentially left
the system intact. After the Texas Supreme Court struck down SB 1, the
Legislature passed House Bill 351 in 1991, creating 188 County Education
Districts (CEDs). The CEDs were allowed to levy state-mandated property taxes
and redistribute the revenues to member districts.

8) The Texas Supreme Court struck HB 351 down, and the Texas Legislature
returned to work. In 1993, it passed Senate Bill 7. the legislation that invoked the
property tax recapture provision, also known as Robin Hood. The purpose for
recapturing revenue from high-wealth districts and using it to fund lower-wealth
districts was to improve equity in the funding system.

9) By 2004, Robin Hood was recapturing $1.2 billion per year from 134 school
districts. The Texas Legislature budgets those recaptured dollars and uses them to
fund the Foundation Program of finance. As a result, it is very hard to end the
Robin Hood provisions because state government would have to find replacement
funding to maintain support for schools.

10) During the 1990’s dissatisfaction with recapture mounted. At the same time,
modest state funding increases were not keeping pace with the cost of education
in Texas. To meet revenue needs of districts, school boards raised property tax
 rates. In fact, by 2003, nearly 690 school districts were at or near the statutory
maximum tax rate of $1.50. This, in turn, sparked litigation to overturn the system
because of high taxes and inadequate funding.

11) In 2001, a group of school districts mounted a lawsuit that became known as West
Orange-Cove CISD v. Neeley. When the case went to trial in 2004, over 300
school districts were involved as plaintiffs or plaintiff interveners. Plaintiff school
districts argued that, because they must levy the maximum property tax rate to
maintain equity and adequacy, the local property tax had become equivalent to a
state ad valorem tax, which is prohibited by the Texas Constitution. They also
argued that the state finance system underfunded public education, preventing the
districts from meeting their responsibilities to promote the General Diffusion of
Knowledge.

12) In September 2004, the Travis County District Court ruled in favor of the
plaintiffs and set a date of October 1, 2005 for the Texas Legislature to remedy
the unconstitutional aspects of the school funding system, including
unconstitutional aspects of facilities funding."
13) http://www.investintexasschools.org/schoolfunding/history.php