Sunday, February 27, 2011
Current Issues Facing School Finance
Current Issues Facing Educational Funding in Texas
General Diffusion of Knowledge
The Texas Constitution requires a public education system to support the General Diffusion of Knowledge (GDK). There is not a Constitutional or statutory definition of GDK. Many people had defined GDK as the accreditation and accountability rating requirements that currently apply to public schools. Judge Dietz, in his ruling in West Orange-Cove v. Neeley, identified the entire education system with all its requirements and mandates as being needed for a GDK.
Adequate Funding
No definition or measure of adequacy exists in Texas law or rule. Recently, researchers and policy experts have begun to consider adequate funding to be the level of resources needed so that all students can meet all the state and federal requirements for testing, school attendance, and graduation. Some believe that adequate funding should also include the cost of school district operations, meaning adherence to all laws and rules. At least three studies to determine adequacy of funding have been recently conducted using Texas data. The results of these studies were presented at trial in West Orange-Cove v. Neeley. In his ruling, September 2004, the trial court judge found that the Texas education system was not adequately funded.
Fiscal capacity
Out of about 1,032 school districts, about 700 are at or approaching the $1.50 M&O limit while Texas ' public school system continues to grow by approximately 70,000 students per year.
With some districts facing job cuts and salary cuts and others simply unable to provide for the influx of new students in high-growth areas of the state, school districts generally agree the system needs to be restructured because they lack the fiscal capacity to respond to changing enrollments and changing requirements of state and federal law.
Local Discretion
Local discretion is the ability of school districts to raise additional revenue to meet unique district and community needs. If a school district experiences a costly problem like building mold, the district will need discretion to raise additional funds for mold remediation and temporary housing of students who are temporarily displaced. Other discretional expenditures may be related to community desires. For example, school district patrons may want a theater facility at the high school. Or they may want to introduce foreign language study in elementary school. To raise funds, districts need some local discretion to raise revenue through taxation----or else have the ability to draw down state funds for such purposes.
Spending
According to Rankings & Estimates, produced by the National Education Association Research group (May 2004), current expenditures per pupil in Texas are $7,330 for 2003-04. The national average, by comparison, is $8,156. This ranks Texas 32nd among the states in spending per pupil. “Current expenditures” in this publication include operating expenditures (salaries, books, material, transportation, energy, etc), capital outlay, and debt service.
Important Info. from Texas PTA
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Texas PTA | 408 West 11th Street | Austin | TX | 78701-2113 |
Thursday, February 24, 2011
M&O Budget Projection at Current ($1.04) Tax Rate
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| If we do not raise GCISD taxes and remain at the current tax rate of $1.04, this is what our Maintenance & Operations (M&O) Budget will look like. Remember, M&O is the budget that funds payroll, curriculum, supplies, programs, etc.--everything except buildings & related equipment such as HVAC, kitchen equipment, buses, fields, and flooring. |
GCISD Budget Facts from GCISD Website
2010-2011 Budget Facts (dollar amounts are rounded)
Source of Funds (General Operating)
Local 83.81 percent
State 15.84 percent
Federal .35 percent
Average 2010 Taxable Value of Residences (based on May 15th values)$247,205 ($251,734 in 2009)
Taxes Due on Average Residence in 2010 (based on May 15th values)
$3,188.94 ($3,247.37 in 2009)
Operating Budget$143.3 million, which includes approximately $29 million for GCISD's distribution of tax revenue, better known as "Robin Hood" payments)
Per Pupil Expenditure
Per Pupil Expenditure
$9,760 (excluding Chapter 41 and TIF)
(General Operating & Debt Svc.)
(General Operating & Debt Svc.)
Total Tax Rate
$1.29 per $100 valuation of homes ($1.29 - in 2009)
reflects a debt service of $.2500 and $1.04 for maintenance and operations.
$1.29 per $100 valuation of homes ($1.29 - in 2009)
reflects a debt service of $.2500 and $1.04 for maintenance and operations.
Source of Funds (General Operating)
Local 83.81 percent
State 15.84 percent
Federal .35 percent
Average 2010 Taxable Value of Residences (based on May 15th values)$247,205 ($251,734 in 2009)
Taxes Due on Average Residence in 2010 (based on May 15th values)
$3,188.94 ($3,247.37 in 2009)
Budget approved June 21, 2010 by the Board of Trustees
Some Light Reading for you... ;)
Center for Public Priorities
February 18, 2011 Contact: Eva DeLuna Castro, deluna.castro@cppp.org 900 Lydia Street • Austin, Texas 78702-2625 • T 512/320-0222 • F 512/320-0227 • www.cppp.org
OVERVIEW OF HOUSE BUDGET PROPOSAL (HB 1) FOR 2012-13
The House of Representative’s proposed budget for the next two-year budget cycle would reduce total funding for state services by 17 percent compared to 2010-11, and by 11 percent for the General Revenue part of the budget. Bad as those cuts sound in a state that is already near the bottom in state spending per resident, the implications of reduced funding are even worse when Texas’s growing population and rising health care costs are taken into account. In “current services” terms, the House budget proposes General Revenue cuts of 28 percent overall, and would leave billions of federal dollars for health care and other social services unmatched. This analysis outlines the major cuts proposed in House Bill 1, the general appropriations act for 2012-13. For more, see the Legislative Budget Board summary.1 Instead of a cuts-only approach, the House needs to take a balanced approach that includes spending the state’s Rainy Day Fund and adding new revenue.
Overall Spending Levels in HB 1
The $73.3 billion in General Revenue spending proposed for 2012-13 is a 19 percent cut from the $90.4 billion in General Revenue (including $8.3 billion in federal Recovery Act money used as GR) budgeted for 2010-11. It is also 31 percent short of what state agencies and universities requested in General Revenue funding for 2012-13, and slightly more than the $72.2 billion in GR that the Comptroller forecast as available for spending (after closing a $4.3 billion 2011 deficit). The All-Funds proposed budget for 2012-13 is $156 billion, or 27 percent below the $214 billion requested for state services in 2012-13. HB 1 does not propose using any of the state’s $9.4 billion “Rainy Day” Fund and uses no significant new revenue.
Public Elementary and Secondary Schools
HB 1 proposes funding the Foundation School Program—the primary way that state aid goes to local school districts to educate over 4.5 million students—at a level that is $9.8 billion (23 percent) below what is required by current state law, the Texas Education Code. There is not enough funding in the House budget proposal to replace $3.25 billion in federal Recovery Act money that was used instead of General Revenue to help pay for schools in 2010-11; to fully fund enrollment growth of about 92,000 students a year in the next two years; to make up for lower local property tax collections for schools; or to cover state-district “settle up” needs. Reduced state aid could mean that local school districts lay off over 100,000 employees, costing the Texas economy another 140,000 private-sector jobs.
The House budget would also make a 99 percent cut to discretionary grant programs outside the Foundation School Program. The following are some of the programs that would not be funded in 2012-13: Texas Excellence educator incentive pay; the Student Success Initiative (to eliminate “social promotion”); the High School Completion and Success Initiative; the Technology Allotment; Pre-Kindergarten Early Start and Early Childhood School Readiness grants; Science Lab Grants; the Texas Advanced Placement Incentive Program; the Virtual School Network; middle school physical education grants; Life Skills Teen Parenting; the Reading/Math/Science Initiative; the Optional Extended Year Program; and School Bus Seat Belt grants. Communities in Schools would no longer receive state support, but would continue to receive a small amount of federal welfare block grant money (Temporary Assistance for Needy Families) in the state budget. 2
Higher Education
General academic institutions and most health-related institutions would see a $412 million cut from 2010-11 levels because of a 10 percent reduction to formula funding. In addition, public higher education, which already serves 1.3 million students in Texas, would not receive funding for enrollment growth, for a loss of over $700 million. Four community colleges would not receive any state funding at all. Special items for higher education would see another quarter of a billion ($254 million), or 25 percent, biennial cut. Financial aid programs would lose $431 million compared to 2010-11. Health coverage for higher education employees would lose $246 million in state support, mostly because of cuts to community colleges’ funding.
Health and Human Services
Medicaid, which provides 3.5 million Texans with access to health care (including nursing home and other long-term care services), would be funded at $35.2 billion (All Funds), or 29 percent less than in 2010-11, in HB 1 as introduced. Of the cuts made to Medicaid, a total of $3.8 billion ($1.6 billion GR) in cuts would be made through 10 percent rate cuts to health care providers. Texas Medicaid services would also not receive funds needed to replace federal Recovery Act dollars (a $4.3 billion GR cut, costing Texas $5.7 billion in federal health care dollars), or $4.2 billion ($1.7 billion GR) to cover projected enrollment growth, medical inflation, and higher costs due to utilization and increased acuity.
The 10 percent rate cuts proposed for 2012-13 are in addition to Medicaid and other HHS rate cuts already made in fiscal 2011 at the request of state leaders. According to the Texas Medical Association, Medicaid rates are so low that only 42 percent of physicians in the state will accept all new Medicaid patients. This is a considerable decrease from 67 percent of physicians in 2000. Medicaid nursing home rates in Texas are also among the nation’s lowest. In child protective services, a 7.4 percent overall cut (compared to 2010-11) would not fund caseload growth in foster care or adoption subsidies and would cut rates for these by 1 percent. Client services would be reduced, and almost 750 staff would be eliminated because the proposed budget does not replace Recovery-Act-related funding for CPS workers.
Transportation
Funding for state highway construction, maintenance, and other Texas Department of Transportation services would be reduced by just over half a billion ($509 million, or 3 percent) in total dollars, mainly reflecting the return to “normal” funding levels after Texas used up all its stimulus-related (Recovery Act) dollars for highway projects.
Criminal Justice
The adult prison system (Texas Department of Criminal Justice) would see an 11 percent reduction in spending compared to 2010-11, almost all of it state general revenue dollars. The Central Unit in Sugar Land would be closed as part of a 10 percent proposed cut to incarceration spending. Community supervision funding would see a 21 percent cut, eliminating much of the recent progress made in funding treatment initiatives and other alternatives to incarceration. Managed health care for inmates would be cut by 24 percent compared to 2010-11, even though Texas already spends significantly less on prisoner health care than most other states.
Other Assistance/Grant Programs
HB 1 would make significant cuts to services funded with dedicated General Revenue, allowing the growing unspent amounts in these accounts to help balance (or “certify”) the rest of the budget. For example, the Texas Emission Reduction Plan would see a 50 percent spending cut, and no assistance would be provided through the Low Income Vehicle Repair, Replacement and Retrofit Program. At the Public Utility Commission, the electric utility discount program for low-income Texans would be cut by 25 percent ($55 million) in 2012-13, giving the System Benefit Fund a balance of $770 million by the end of fiscal 2013.
Center for Public Policy Priorities
February 18, 2011 Contact: Eva DeLuna Castro, deluna.castro@cppp.org 900 Lydia Street • Austin, Texas 78702-2625 • T 512/320-0222 • F 512/320-0227 • www.cppp.org
OVERVIEW OF SENATE BUDGET PROPOSAL FOR 2012-13
The Senate’s proposed budget for the next two-year budget cycle would reduce total funding for state services by 15 percent compared to 2010-11, and by 10 percent for the General Revenue part of the budget. Bad as those cuts sound in a state that already ranks near the bottom in state spending per resident, the reduced funding levels are even worse when Texas’s growing population and rising health care costs are taken into account. In “current services” terms, the Senate budget proposes General Revenue cuts of 27 percent overall, and would leave billions of federal dollars for health care and other social services unmatched. This analysis outlines the major cuts; for more, see the Legislative Budget Board summary.1 Instead of cuts, the Senate needs to take a balanced approach that includes spending the state’s Rainy Day Fund and adding new revenue.
Overall Spending Levels
The $73.8 billion in General Revenue spending proposed for 2012-13 is an 18 percent cut from the $90.4 billion in General Revenue (including $8.3 billion in federal Recovery Act money used as GR) budgeted for 2010-11. It is also 30 percent short of what state agencies and universities requested in General Revenue funding for 2012-13, and slightly more than the $72.2 billion in GR that the Comptroller forecast as available for spending (after closing a $4.3 billion 2011 deficit). The All-Funds proposed budget for 2012-13 is $159 billion, or 26 percent below the $214 billion requested for state services in 2012-13. The Senate budget does not propose using any of the $9.4 billion “Rainy Day” Fund and uses no significant new revenue.
Public Elementary and Secondary Schools
The Senate budget proposes funding the Foundation School Program—the primary way that state aid goes to local school districts to educate over 4.5 million students—at a level that is $9.3 billion (22 percent) below what is required by current state law, the Texas Education Code. There is not enough funding in the Senate budget proposal to replace $3.25 billion in federal Recovery Act money that was used instead of General Revenue to help pay for schools in 2010-11; to fully fund enrollment growth of about 92,000 students a year in the next two years; to make up for lower local property tax collections for schools; or to cover state-district “settle up” needs. Reduced state aid could mean that school districts lay off over 100,000 employees, costing the Texas economy another 140,000 private-sector jobs.
The Senate budget would also make a 69 percent cut to discretionary grant programs outside the Foundation School Program. The following would not receive any specifically designated funding in 2012-13: Texas Excellence educator incentive pay; the Student Success Initiative (to eliminate “social promotion”); the High School Completion and Success Initiative; the Technology Allotment; Pre-Kindergarten Early Start and Early Childhood School Readiness grants; Science Lab Grants; the Texas Advanced Placement Incentive Program; the Virtual School Network; middle school physical education grants; Life Skills Teen Parenting; the Reading/Math/Science Initiative; the Optional Extended Year Program; and School Bus Seat Belt grants. (Some of these services could continue to be funded at much lower levels through a $400 million rider.) Communities in Schools would no longer receive state support, but would continue to receive a small amount of federal welfare block grant money (TANF) in the state budget.2
Higher Education
General academic institutions, community colleges, and most health-related institutions would see a $239 million cut from 2010-11 levels because of a 5 percent reduction to formula funding. In addition, public higher education, which already serves 1.3 million students in Texas, would not receive funding forenrollment growth, for a loss of over $700 million. Special items for higher education would see another quarter of a billion ($254 million) biennial cut.Financial aid programs would lose $431 million compared to 2010-11. (A contingent rider might restore $50 million to these services, but tens of thousands of new students would still be denied state-funded financial aid.) Health coverage for employees at universities and community colleges would also receive less state support, shifting costs onto workers and their families.
Health and Human Services
Medicaid, which provides 3.5 million Texans with access to health care (including nursing home and other long-term care services), would be funded at $35.2 billion (All Funds), or 29 percent less than in 2010-11, in the Senate’s proposed budget. Of the cuts made to Medicaid, a total of $3.8 billion ($1.6 billion GR) in cuts would be made through 10 percent rate cuts to health care providers. Texas Medicaid services would also not receive funds needed to replace federal Recovery Act dollars (a $4.3 billion GR cut, costing Texas $5.7 billion in federal health care dollars), or $4.2 billion ($1.7 billion GR) to cover projected enrollment growth, medical inflation, and higher costs due to utilization and increased acuity.
The 10 percent rate cuts proposed for 2012-13 are in addition to Medicaid and other HHS rate cuts already made in fiscal 2011 at the request of state leaders. According to the Texas Medical Association, Medicaid rates are so low that only 42 percent of physicians in the state will accept all new Medicaid patients. This is a considerable decrease from 67 percent of physicians in 2000. Medicaid nursing home rates in Texas are also among the nation’s lowest. In child protective services, a 7.4 percent overall cut (compared to 2010-11) would not fund caseload growth in foster care or adoption subsidies and would cut rates for these by 1 percent. Client services would be reduced, and almost 750 staff would be eliminated because the proposed budget does not replace Recovery-Act-related funding for CPS workers.
Transportation
Funding for state highway construction, maintenance, and other Texas Department of Transportation services would be reduced by just over half a billion ($509 million, or 3 percent) in total dollars, mainly reflecting the return to “normal” funding levels after Texas used up all its stimulus-related (Recovery Act) dollars for highway projects.
Criminal Justice
The adult prison system (Texas Department of Criminal Justice) would see a 9.4 percent reduction in spending compared to 2010-11, almost all of it state general revenue dollars. The Central Unit in Sugar Land would be closed as part of an 8 percent proposed cut to incarceration spending. Community supervision funding would see a 12 percent cut, eliminating much of the recent progress made in funding treatment initiatives and other alternatives to incarceration. Inmate managed health care would be cut by 24 percent compared to 2010-11. Texas already spends way less on prison health care than most other states.
Other Assistance/Grant Programs
The Senate budget would make significant cuts to services funded with dedicated General Revenue, allowing the growing unspent amounts in these accounts to help balance (or “certify”) the rest of the budget. For example, the Texas Emission Reduction Plan would see a 50 percent spending cut, and no assistance would be provided through the Low Income Vehicle Repair, Replacement and Retrofit Program. At the Public Utility Commission, the electric utility discount program for low-income Texans would be completely eliminated for 2012-13, cutting $220 million from the state budget, and giving the System Benefit Fund a balance of $940 million by the end of fiscal 2013.
School Finance Terms Defined
Terms you'll hear in school finance discussions:
(1) Robin Hood - A common name for the process of redistributing property wealth among school districts across the state of Texas; also called Chapter 41 or HB1.
(2) Recapture - The process of redistributing the wealth among school districts. GCISD sends $0.26 of every tax $ collected.
(3) Target Revenue - the funding each school district receives based on various factors. The problem is that target revenue has been adjusted for inflation and is still set on the revenue per student attendance (WADA) rate in 2005-06; for GCISD it's $5,270.
(4) Wealth - we are defined as a property wealthy district because of our taxable property value per student. In 2009-2010 it equaled $646,161 and the 1st level of recapture is set at $476,500.
(5) Average Daily Attendance (ADA) - daily attendance counts averaged over the year and upon which state funding is based. In 2009-10, GCISD's was 13,000. So we're not paid when students aren't in school--we lose money when students are absent.
(6) Weighted Average Daily Attendance (WADA) - process of weighing Average Daily Attendance (student attendance per day) for students participating in programs in addition to daily instruction such as special ed, GT, ESL, etc. For GCISD, WADA was 15,362 in 2009-10.
(7) Interest & Sinking (I&S) Tax Rate - also called debt service rate - basically this is the bond money collected when a bond package is approved by voters. This money can only be used for facilities and capital improvements (buildings & furnishings basically). This money is NOT subject to recapture which means we keep all of it in GCISD. If we don't approve this proposed bond in the May election, then we will have to use the M&O tax revenue for things like roofs, kitchen equipment, HVAC equipment, etc., and even less will be available for payroll, programs and supplies.
(8) Maintenance & Operations (M&O) Tax Rate - $1.04 -the portion of taxes collected that is used for payroll, curriculum, programs, supplies, food, etc.--daily needs. This is what is recaptured and sent back to the state at 26 cents per tax dollar collected.
Why are we in this financial crisis?
So why is GCISD in this "financial crisis"?
- GCISD's revenue from the state is still based on 2005 numbers. It's like working for a company and not having had a salary increase since 2005, but having increasing expenses due to inflation, etc. Cost of living increases are estimated at 2% each year.
- How does GCISD increase it's revenue or make more money? The only ways to increase revenue are to either (a) raise the M&O tax rate which can only be raised through a tax ratification election to voters (TRE); or (b) increase student enrollment. Well, GCISD didn't want to have high tax rates back in 2005 like some of our surrounding districts so the tax rate was set at $1.04 instead of the $1.17 cap--if our tax rate would've been higher back then, we would have more money now. Also, people like living in this area and don't move very much--there aren't a lot of young families moving in while families with older kids who have graduated move out. We're also pretty land-locked, so it's hard to increase student enrollment.
- The state of Texas is working under a huge budget defecit ($27 billion shortfall in its revenues) and is cutting its funding across the board, including public education. Public education represents about 44% of the state's budget, therefore equalling about $10 billion in cuts. The revenue GCISD receives from the state represents about 17% of the total sources of revenue (82% from local taxes, 0% federal and 1% other).
Sample Letter to Vicki Truitt
Here's an e-mail that Laurie Jackson, a very informed and involved parent and HMS PTA President sent out. Please take the time to read this and follow her lead!
********************
Hello, all,
I’m sure all of you know by now that our school district is facing a drastic financial crisis.
The state’s school finance system (House Bill 1) already had our district in a budget crunch.
Now that the state itself is experiencing a huge budget shortfall, GCISD is facing an even greater financial emergency.
With looming state budget cuts, SCHOOL FINANCE REFORM IS EVEN MORE IMPERATIVE!!
I know that most of you know that this has been a soap box of mine for a while, but things are getting worse.
As citizens of this community and as parents of children in GCISD, we have a responsibility to let our lawmakers know that the current system of school financing is UNACCEPTABLE!
Don’t know what to say?
The email below is the most recent email I sent to our state representative, Vicki Truitt.
Please feel free to use that info as a guide or send the note as is (just change the name, etc. J).
If our lawmakers don’t hear from us about this, they will not know that we think it’s important!
Thanks!
Laurie
From: The Jacksons [mailto:laurie_brian_jackson@verizon.net]
Sent: Tuesday, February 01, 2011 9:31 AM
To: 'vicki.truitt@house.state.tx.us'
Subject: I am a concerned citizen of Grapevine, Texas .
Dear Ms. Truitt,
My name is Laura Jackson. I am a mother of four children, and I have been a Grapevine resident for 10 years. I have been extremely active in the schools my children attend, serving in capacities ranging from PTA president to homeroom parent. I have witnessed first-hand the caliber of programs and staff in our schools. We have one of the finest school districts in the state. One of the primary reasons my family and I settled here is the outstanding quality of the Grapevine-Colleyville school district. In fact, I believe our school district is one of this area’s (and your constituencies’) most important features.
However, I am highly distressed about the future of this school district and, consequently, the future of my community. As you (should) understand by now, GCISD is facing a serious economic deficit. The Legislature’s current system of school financing (House Bill 1) continues to fail and is letting our children – the children of voters who elected you – down.
The quality of a community’s school system is the bedrock of a prosperous, thriving community. An area’s schools are what attract hard-working families to settle down and spend their hard-earned income there. The tax dollars spent in that community SHOULD be used to continually improve the school system – all for the benefit of its children. Under our state’s current system of school funding, our hard-earned tax dollars seem to be flying out of our community faster than we can earn them – all to the detriment of our children.
If GCISD and our children continue to fall victim to the Legislature’s ridiculous excuse of a financing system, the quality of this district will begin to plummet. For the first time EVER, our district is facing the possibility of firing teachers. With fewer teachers, we will be facing not only fewer curriculum choices but also larger class sizes, a condition under which both students and teachers suffer. With larger class sizes, it will be difficult to retain and attract the high-caliber teachers we expect in our classrooms.
Following the lay-offs, our wonderful programs will be at risk. No longer will the district be able to support our outstanding fine arts or even gifted and talented programs. These are the very features that the citizens of this community demand in a school district. What happens when GCISD can no longer offer the very things that set it apart from other school districts? The whole community will feel the negative effects.
Ms. Truitt, as a concerned citizen and distressed parent, I am wondering what exactly you are doing to support the children of the communities you represent? Every legislative session I look for your name on bills that address this dire situation. Every legislative session I have been disappointed. There are solutions to this unacceptable situation:
1. Remove the revenue cap on our districts. GCISD has a large, healthy tax-base. HB-1 is limiting our access to our own money.
2. Provide for an inflation factor when allocating funds. The Legislature is forcing the district to operate at a 2011 cost-of-living with a 2005-2006 level of income. It’s absurd.
3. Return the authority to raise taxes to our school boards. We voters ELECT these officials for this very reason: to act on behalf of the district and our children. Under HB-1, the school district must hold an election to approve a tax rate increase. Even if an increase is approved, our district can only keep roughly half of every dollar, while the other half goes to the state. That is unacceptable.
I truly hope you grasp the situation into which the Grapevine-Colleyville school district has fallen. I worry first and foremost about our children and the quality of their education. I am equally troubled by what is going to happen to this wonderful community should the quality of GCISD diminish as a result of House Bill 1.
It is my sincerest wish that you are not only equally concerned but also ready to take up the fight and support our children. It is past time for new legislation. Are you, Ms. Truitt, a true representative of your community? If you are, then you can not ignore what is happening in your own back yard.
Thank you,
Laura Jackson
Citizen of Grapevine
Welcome to this new blog!
Welcome to this new blog! We have a new Facebook site, "Grapevine-Colleyville ISD Voices for Public Education Funding". The purpose of this Facebook site and blog is to provide communication tools and news updates for GCISD residents who would like to draw attention to our school district's financial crisis and the actions of our state legislature in funding public education. This blog is for those who aren't on Facebook but still want access to the information provided. We hope that you will become an active voice in the fight to provide adequate funding to our public schools, especially our own GCISD, so that our children have continued access to the BEST education!
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