Texas Public Education – Looking to the Future

48th ANNUAL PDK POLL OF PUBLIC ATTITUDES What grade would you give US public schools generally? A – 4% B – 20% C – 41% D – 20% F – 7%

48th ANNUAL PDK POLL OF PUBLIC ATTITUDES What grade would you give US public schools in your local community? A – 13% B – 35% C – 28% D – 10% F – 7%

48th ANNUAL PDK POLL OF PUBLIC ATTITUDES What grade would you give the public school your oldest child attends? A – 26% B – 41% C – 23% D – 5% F – 5%

48th ANNUAL PDK POLL OF PUBLIC ATTITUDES What is the biggest problem facing public schools in your local community? Financial support (lack) - 19% Discipline - 9% Quality - 9% Fighting/violence/gangs - 8% Quality of teachers - 7% Drugs - 6% Government interference - 5% Parental support - 5% Poor curriculum - 5%

Next Generation Assessments and Accountability Commission Composition: 15 members 4 appointed by the Governor and 3 each by the Lt. Governor and Speaker, which included: 2 School District Superintendents 2 Charter School Administrators 1 Chief Instructional Officer 1 Board Member 4 Chairs of House and Senate Public and Higher Education committees, 1 member of SBOE 2 school district Commission Purpose To develop and make recommendations for new systems of student assessment and public school accountability

Next Generation Assessments and Accountability Recommendations: Implement an individualized, integrated system of multiple assessments using computerized- adaptive testing and instruction Allow the commissioner of education to approve locally developed writing assessments Streamline the TEKS

Next Generation Assessments and Accountability Recommendations (cont’d): Limit state testing to readiness standards Add college-readiness assessments to Domain IV indicators and fund broader administration of college-readiness tests Align state accountability with ESSA requirements

Next Generation Assessments and Accountability Recommendations (cont’d): Eliminate Domain IV from state accountability calculations for elementary schools Place greater emphasis on Domains I-III in state accountability Retain individual graduation committees (remove the Sept. 1, 2017 expiration date now on TEC, §28.0258)

Next Generation Assessments and Accountability Considerations for further study: Align new assessments to TSIA, nationally recognized college- readiness tests and other non-traditional measures like ASVAB Explore implications of replacing state assessments with nationally recognized tests that are aligned to the TEKS Study alternative, district-based assessment and accountability systems Test relationship between results of stratified random sampling and whole-population testing, using existing data Study impact of weighting Domain I (achievement) by length of continuous student enrollment

TEXAS SBOE SURVEY JULY 2016 Surveyed multiple groups – parents, students, educators, business leaders, etc. 78% - 91% of each group favored reducing number of state tests 77% of educators and 68% of students favored streamlining state standards to reduce amount of content covered each year 60% of parents and 53% of educators favor moving to computer-based test to show student progress

Texas Constitutional Provisions ARTICLE VII, SECTION 1 A general diffusion of knowledge being essential to the preservation of the liberties and rights of the people, it shall be the duty of the Legislature of the State to establish and make suitable provision for the support and maintenance of an efficient system of public free schools. ARTICLE VIII, SECTION 1-e No State ad valorem taxes shall be levied upon any property within this State

Guiding Principles for Texas and Public Educations All children can learn We reject the “soft bigotry of low expectations” Resources well used make a difference in the lives of children The future of Texas depends on educating our growing population of poor and ELL children Public schools are charged by the Texas Constitution with this great mission for Texas

Bookends of an Era Edgewood ISD v. Kirby, Oct. 2, 1989 Morath v. TTSFC, et. al., May 13, 2016

Standard of Review “. . . . we presume the system is constitutional.” “. . . . very deferential standard . . . .” “If the Legislature’s choices are informed by guiding rules and principles properly related to public education – that is, if the choices are not arbitrary – then the system does not violate the constitutional provision.” Opinion does not mention requirement that “the State’s provision for a general diffusion of knowledge must reflect changing times, needs, and public expectations.”

Adequacy Edgewood I – “The amount of money spent on a student’s education has a real and meaningful impact on the educational opportunity offered that student.” Morath – “Even the general, qualitative question of the existence of a cost-quality relationship remains a highly contested issue in the social sciences.”

Adequacy cont. Low Income and ELL Students System is not constitutional because of performance of subgroups Coleman Report – non-school factors much more determinative of performance than school resources “The Plaintiffs presented much data on achievement gaps of ELL and economically disadvantaged students, but did not prove that those gaps could be eliminated or significantly reduced by allocating a greater share of funding to those groups.” “More money does not guarantee better schools or more educated students.”

Adequacy cont. Low Income and ELL Students Coleman Report was not even in the record before the Supreme Court. State never even argued that performance of low income and ELL students can’t be improved with resources and appropriate programs. Supreme Court ignored the evidence in the record and went outside the record to conclude that resources for low income and ELL students do not make significant difference.

State Property Tax Districts have not lost meaningful discretion. Only 24% of districts with 13% of students are at $1.17 cap. 69% of districts with 76% of students are at or below $1.04. Supreme Court rejected any distinction between $1.04 and $1.17 analysis. There still is $2.3B of capacity in system.

State Property Tax

Where to From Here? An era is over – Texas Supreme Court has withdrawn from holding the State to a high standard. State can impose requirements without resources, because the Supreme Court does not believe there is a strong relationship between requirements and resources. Will districts work together going forward? Or, will groups of districts, and groups of students, compete against each other for scarce resources?

85th Texas Legislature January 10, 2017 - convenes May 29, 2017 - adjourns

85th Texas Legislature PUBLIC SCHOOL FINANCE Base - $41B Student growth – 2% Property value growth to cover student growth – 3% Repeal of ASATR - $300M State savings Austin ISD yield on golden pennies - $1B for biennium Inflation - $800M year / $2.4B biennium Moak Casey & Associates

85th Texas Legislature PROPERTY VALUE GROWTH Each 1% of growth saves State $221.7M in 2016 tax year 5% growth saves State $1.108B in 2016 tax year 8% growth saves State $1.739B in 2016 tax year Moak Casey & Associates

Declining State Share of FSP Year Local M&O Taxes State Funding % State 2015-16 $22.2 B $16.8 B 43.1% 2016-17 $23.2 B $15.8 B 40.4% 2017-18 $24.4 B $14.4 B 37.1% 2018-19 $25.7 B $13.7 B 34.8% 2015-16, 2016-17, and 2017-18 from current MC&A statewide model; 2018-19 projected without a model

85th Texas Legislature REVENUE PICTURE July 2016 Sales Tax Report year-to-date collections down 2.26% compared to same period in 2015 Sales Tax is 56% of all State tax collections July Oil and Gas Production Tax year-to-date collections down 40.80%compared to June 2015 Alcoholic Beverages Tax year-to-date collections up 3.84%

85th Texas Legislature REVENUE PICTURE cont. Highway Funding – up to $2.5B of sales tax above $28B, beginning in FY 2018 End of 84th Session - $6B unspent GR Beginning of 85th Session - $2B unspent GR economic slowdown

85th Texas Legislature TEA Legislative Appropriations Request $2.1B less State aid for schools $3.1B less State General Revenue Reliance on property value growth to cover reduction plus all increase in students Recapture – 2016-17 biennium $3.7B 2018-19 biennium $5.1B

85th Texas Legislature FUNDING PRIORITIES Health Care - $1.3B-1.6B DPS Border - $300M TRS-Care - $1.35B deficit Higher Education - $345M Highways – diversion of up to $2.5B of sales tax revenue CPS - ? Public Education - ? Property Tax Reduction - ?

85th Texas Legislature PUBLIC EDUCATION ISSUES Choice Transparency Accountability ASATR phase-out Needs of low income and ELL students Performance-based funding Targeted program funding Differences in House and Senate approaches

J. David Thompson, Partner jthompson@thompsonhorton.com (713) 554-6752