1. January 2016 Update

2. National Comparisons
In the latest Quality Counts report released by Education Week a few weeks ago, Texas isn’t ranking anywhere to brag about. This particular ranking is not just based on spending alone. It’s a combination of K-12 achievement, the chance for success in a state (made of opportunities, participation and quite a few adult factors like employment and education attainment), and school finance.

3. Quality Counts Rankings
2013
2014
2015
2016
Chance for Success
36th
40th
39th
42nd
School Finance
41st
45th
K-12 Achievement
17th
21st
24th
So knowing that the financial data is always 1-2 years behind the achievement data, you could look at these rankings and definitely see the trend that as our ranking on spending declines, so does that of achievement.
I would also note that when you break down our performance data by ethnicity and socio-economic status, our students do quite well when compared with their peers, ranking higher than the overall numbers show. It’s important to remember that the overall ranking for performance in Texas is compared to states like Utah, New Hampshire, and Iowa with far less diverse student populations. One could automatically assume that given the diversity in students, Texas would have to spend more to educate students. But that is not the case.

4. Quality Counts: Texas Report Card
Category
Letter Grade
Score
Chance for Success C
73.3
Early foundations
74.8
School years C-
71.1
Adult outcomes
75.9
K-12 Achievement
70.9
Status D
64.3
Change D+
69.3
Equity B
85.4
School Finance
64.8
83.0
Spending F
46.6
Diving a little deeper on the school finance data, we see that equity isn’t the culprit behind the poor ranking on finance. In fact, we’re doing pretty well on equity. Education Week gave Texas a B. But on spending, that’s where we see the grade of F.

5. Quality Counts: Texas Report Card
Category
Letter Grade
Score
Chance for Success C
73.3
Early foundations
74.8
School years C-
71.1
Adult outcomes
75.9
K-12 Achievement
70.9
Status D
64.3
Change D+
69.3
Equity B
85.4
School Finance
64.8
83.0
Spending F
46.6

6. Quality Counts Finance Rankings
Equity
Wealth-Neutrality
23rd
McLoone Index
(spending toward the median)
18th
Spending
Per-Pupil Expenditures
(adjusted for regional differences)
49th
% State Spending on Education
38th
Even with the adjustments applied for the lower cost of living in Texas, we still ranked 49th on spending.

7. Quality Counts Finance Rankings
Equity
Wealth-Neutrality
23rd
McLoone Index
(spending toward the median)
18th
Spending
Per-Pupil Expenditures
(adjusted for regional differences)
49th
% State Spending on Education
38th

8. School Finance Litigation Update

9. What’s Changed since WOC II?
( )
Now
( )
Total Enrollment
4,328,028
5,232,065
% Economically Disadvantaged
53%
60%
Inflation Adjusted Total
Per-Student Funding
$7,128
$6,816
% Meeting Final Standard
Exit-Level Math Exam
67%
47%
Exit-Level English Exam
83%
51%
Here’s the reason why schools once again find themselves in court: when you look at what’s changed since the last school finance ruling, this slide says it all. The State of Texas has seen enrollment increase by nearly 1 million students (many more of whom are economically disadvantaged). Yet, when you adjust for inflation, we are actually funding our schools at a lower level than more than 10 years ago. And it isn’t any surprise why far less students are able to achieve the exit-level standard (standards that have increased at the same time funding has decreased).

10. State programmatic funding
Amicus Brief - Governor of Texas
funding
funding
% increase
Overall funding
$91.2 billion
$106.7 billion
17%
Formula funding
$80.4 billion
$94.5 billion
18%
State programmatic funding
$1.0 billion
$1.8 billion
77%
Annual, per student
$9,771
$10,672 9%
As you know, Governor Abbott filed an amicus brief shortly before the case was argued before the Texas Supreme Court. You may remember that Governor Abbott was Attorney General Abbott when this case went to trial. According to the Constitution, it was his job to defend the State against the claims filed.
His brief pointed out that since , school funding has increased by some pretty substantial numbers. You might have heard similar claims from other state leaders about how much additional funding they have spent on public education. And you can certainly make the numbers tell that story. We’re not disputing the truth of these numbers—just the context.

11. Plaintiff response to Governor Abbott
Funding
Funding
% Change
Instructional Formula Funding
per student
$8,366
$8,213
-2%
State Programmatic Funding
$2.4 billion
$1.8 billion
-25%
The school district plaintiffs collectively responded to the Governor’s numbers, and here is what we said:
First of all, we believe that the fair thing to do is to go back one more year in time than the Governor did. You need to look back to the school year, BEFORE the major cuts were made at the State level. Because after all, it’s pretty easy to show an increase from your lowest point. Secondly, we believe that it is only fair to look at INSTRUCTIONAL spending. Evaluating dollars districts bring in due to bonds for facility purposes or federally for child nutrition should rightfully be excluded because the use of those funds is restricted by law.
When you do both of those things, you can clearly see decreases in funding, and that’s even without adjusting for inflation of any kind over this six year period.
These numbers have not been adjusted to account for inflation. The Texas Comptroller has predicted 1.9% inflation per year for the next two years.

12. School Finance Litigation Timeline
Calhoun County ISD Plaintiffs file claims against State, along with 3 other school district plaintiff groups
Final Judgment issued, declaring system unconstitutional
8/28/2014
Texas Supreme Court takes the case
12/11/2011
1/23/2015
Judge Dietz announces ruling declaring system unconstitutional
Texas Primary Election (assuming ruling to be issued after this date)
2/4/2013
3/1/2016
2011
2011
2012
2013
2014
2015
2016
2017
2017
10/22/2012
9/26/2014
9/1/2015
85th Legislative Session begins
1/10/2017
School Finance Trial begins
Appeal of Judgment is filed
Oral Arguments before the Texas Supreme Court
5/25/2011
Texas Legislature cuts education funding
1/21/2014
Supplemental Hearing begins to address changes made by 83rd Legislature
The words on this slide may be too small to read, but that’s because there have been so many events along the way of this lengthy timeline. Students who were freshmen in high school when this case was filed were already freshmen in college by the time this case was argued before the Texas Supreme Court. And those students will likely be half-way through their college careers before any actions are taken by the Legislature in response to the claims filed back in December 2011.
Students who were kindergartners when the case was filed in 2011 will be teenagers before it resolved. That’s a long time to attend school in an unconstitutional system.
While we could see a ruling any day now, my best guess is that we will not see the school finance ruling until after the March 1, 2016 primary election. Several Texas Supreme Court justices are up for re-election, and for political reasons, I do not expect to hear from the Court until then.
140 days
140 days
83rd Legislative Session
1/8/ /27/2013
140 days
84th Legislative Session
1/13/ /1/2015
85th Legislative Session
1/10/ /29/2017

13. Texas State Supreme Court - 2015
Nathan L. Hecht
Paul W. Green
Phil Johnson
Jeffrey V. Brown
Jeffrey S. Boyd
John Devine
Debra H. Lehrmann
Don R. Willett
Eva Guzman
When you take a look at the supreme court justices that heard the arguments in this case, keep in mind that only three of the justices weighed in on the West Orange Cove ruling. Justice Willett was newly appointed to the Court at the time, so he did not sign the ruling. Justice Boyd was involved, but not on the Court. He was actually working to defend the State at the time West Orange Cove was heard.
Now, three of the 9 justices are currently up for re-election, and all three are facing opponents in the March 1 primary election. At least two these races are predicted to be close.

14. Ruling expected after March 1 Primary Election
What’s next?
Ruling expected after March 1 Primary Election
What if remanded back to District Court?
If favorable ruling, when will the Legislature respond?
Regardless of what the ruling may be, there will be someone who disagrees and doesn’t like it, so we would be very surprised to see the ruling prior to the March 1 primary given that one-third of the Court are facing primary opponents that could use this ruling as ammunition against them in the election.
There is always the chance that this case could be remanded back to the District Court. We think the chances of this are not high, but it is certainly possible. As you know, the Legislature passed a law last year that would send any future school finance cases to a 3-judge panel rather than a single district court judge in Travis County. And you may have heard something in the news about the new rules adopted that could send THIS case to a three-judge panel if it is remanded. We think that if that were to happen, we believe things should play out according to the rules that were written when this case was filed. And it is certainly something we would challenge. But for now, we’re simply hoping that isn’t a challenge we will have to worry with, because either way, remanding the case draws out the timeline for districts to get the relief they so desperately need.
So then, if a favorable ruling is issued, when will the Legislature respond? That’s anyone’s guess, and certainly at the discretion of the Court. When looking to history to be our guide, we believe that the Court will most likely give the Legislature at least through the next legislative session in 2017, and we know from history there that it is nearly impossible for the Legislature to pass a comprehensive school finance fix during the course of a regular legislative session. So that means that with a favorable ruling, our best hope is to see this decided during the summer of 2017—right as you are all planning and voting on final budgets (with those final budget numbers still widely unknown).

15. Election Update
We know March 1 is the magical date for when we might expect a court ruling, but let’s also take a moment to look at what’s at stake and what to expect in the upcoming March 1 primary.

16. Texas Senate 2 incumbents not returning:
SD 1 (Eltife)
SD 24 (Fraser)
3 incumbents with primary opponents:
SD 19 (Uresti)
SD 26 (Menendez)
SD 27 (Lucio)
No seats expected to change party hands
What isn’t reflected on this slide is that Senator Rodney Ellis of Houston has announced his desire to seek a Harris County Commissioner’s Court seat, so even though he will still appear (unopposed) on the primary ballot, it is possible that we will see 3 incumbents not returning.

17. Texas House of Representatives
150 seats up for election
60 incumbents with no major party opposition
16 incumbents not returning (open seats)
28 incumbents with only primary opponent
33 incumbents with only general opponent
13 incumbents face opponents in both

18. I can’t emphasize enough how important it is to do your homework, and encourage members of your community to do their homework. Be informed about which candidates share your priority of public education.

19. Key Dates Relating to 2016 Elections
February 1
Last day to register to vote
February 16
First day of early voting
February 26
Last day of early voting
March 1
Primary Election Day
May 24
Primary Election Run-off Election
November 8
General Election Day
In the last primary election (2014), there were a total of 1.9 million people who voted in that election (Republican and Democratic primaries combined).

20. 1. 9 million people voted in the last primary election
1.9 million people voted in the last primary election. Want to know how many Power Ball tickets have been sold in January 2016 alone? 3.9 million. While I know people buy multiple lottery tickets, I would still argue that more people buy lottery tickets than vote.
Whether you bought a ticket or not, it’s not possible that you escaped hearing about the Power Ball frenzy on the news. You probably even heard about how much the Powerball ticket sales benefitted education. The $1.5 billion jackpot pumped a whopping $106 million into the Foundation School Fund. And while I don’t mean to sound ungrateful that the lottery’s $1.2 billion donation to education might climb as high as $1.3 billion, I would like to talk for a moment about the REAL jackpot in Texas…

21. Chapter 41 & Recapture
The real jackpot that delivers a much greater source of revenue for the State of Texas is Robin Hood recapture.
This graphic shows the steady climb of recapture and of Chapter 41/recapture districts. The bottom line is that we have become a funding source for the State. By FY 2017, recapture is expected to reach $2 billion per year. Meanwhile the Texas Lottery will continue to contribute $1.2-$1.3 billion per year.
We’ve come to a point in time when Robin Hood has been accepted as a necessary part of our system. It’s the reason our state received a ‘B’ in equity. And it’s certainly better than the alternative of a statewide property tax! But what we need is a State willing to properly fund schools in accordance with its constitutional obligation so that less recapture is required of our districts and that more local property tax revenue remains in our local communities.
I would also point out on this slide that even though the number of districts identified as Chapter 41 this school year has increased slightly, the number of districts required to pay recapture has declined. Even so, we see a major jump in the overall amount. What that means is that those who are paying recapture are doing so at much higher amounts—not that we’re spreading it around in an increasing number of distircts.

22. Expected Annual Revenue 2015-16
The Real Jackpot for Texas
Revenue Source
Expected Annual Revenue
Texas Lottery
$1.2 billion
Robin Hood Recapture
$1.8 billion

23. Robin Hood over Time 1st year of Robin Hood: 2013-2014:
34 Chapter 41 districts :
395 Chapter 41 districts
When Robin Hood began, it was intended to address the outliers—the districts with wealth so great that the State simply could not afford to bring the entire system up to that funding level. But as state standards for funding continue to decline, and property wealth continues to grow, more and more districts are deemed “property wealthy,” whether they feel “wealthy” or not!

24. Additional State Aid for Tax Reduction (ASATR)
218 districts to receive ASATR in
For a total of $321 million
Average of $765 per WADA (11.4% of M&O Revenue) for qualifying districts
For some districts, ASATR makes up 30-40% of M&O Revenue
ASATR
September 1, 2017
As if we haven’t already covered enough bad news…we would be remiss not to mention a word or two about ASATR. September 1, 2017, the deadline for ASATR, looms, and for many districts the fiscal cliff they face is very real. These are updated numbers from TEA, which show less districts relying on ASATR, but for those who do require it, they are relying on it even more, due to property value decline in certain areas.
While only slightly more than 200 districts still rely on ASATR and only $321 million is required to keep districts whole in accordance with the promise that was made, it has an expiration date all the same.
The AVERAGE loss for these 218 districts is $765 per WADA. And that’s the average, because there are some districts that stand to lose 30, and even 40% of their M&O revenue when and if ASATR expires. We are fighting to protect districts from this fiscal cliff, and Wylie Coyote's fate in If you are an ASATR district, you need to be talking to your local legislators about this issue, and you need to be doing so now. (And every opportunity you get from now until something is done.)

25. Issues at play in 2017 School finance ruling?
Budget deficit due to drop in oil prices?
Legislature hesitant to spend
School finance ruling?
Ongoing shortfall from Medicaid needs
Transportation and water needs
Calls for further property tax relief
Calls for school choice/private school vouchers

26. Advocacy is important 181 Legislators 140 days 6,000 plus bills
10-15% relate to public education
1,500 bills will pass (5-10% related to public education)
Legislative Session: 181 legislators spend 140 days passing about 1,500 of the 6,000 bills that are filed. Between 10-15% of the bills filed relate to public education and typically 5-10% of the bills that pass relate to public education. That’s why building a PRIOR relationship with legislators and staff is important.

27. 7 Seven Times Meet legislator at ESC meeting
Follow-up with data responsive to their remarks
Call to offer assistance with school finance questions
Meeting in their district office
Send a thank-you note with follow-up from meeting
Invite legislator to visit your district/specific campus
You still have one more to go!
In sales, they teach that it takes 7 contacts before a buyer remembers who you are. Think about that in terms of the vendors many of you deal with who sell various things to your district.
Do you buy from someone just because the sell something for the best price? Maybe. But I’m willing to bet you have relationships with some long-term vendors. And I bet those vendors have relationships with you and your district so that they know what you need, and they are able to connect you with the products and services you need for the best price because of that relationship.
This statement won’t apply to all, but there are some vendors with whom you work who you TRUST.
Think about that for a moment (and don’t deny it—we’re among friends in this room, and admitting that you trust a vendor will help illustrate a point that will help you to be a more effective advocate). Why do you trust them? You need to build a high level of trust with your legislator. This time, you are the one selling.
Let’s set a goal between now and the next legislative session to have seven points of contact. You have 350 days to accomplish this goal. Here’s an example of what I’m talking about (and yes, I know that some of you have legislators who don’t make themselves available quite like this illustration shows).
You might meet the legislator for the first time when they visit your region service center…That’s only six. You have one more to go!
Set a goal for yourself to have seven interactions with your legislator and/or their staff.

28. Thank you!