1. Cohort X Doctorate Students July 13, 2016 - Austin, TX

2. Platinum Sponsor

3. Gold Sponsors

4. Road Map
“You’ve got to be very careful if you don’t know where you are going, because you might not get there.” -Yogi Berra
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5. Three Principles of an Efficient School Funding System
A world-class, free public education system must be our new standard, because we compete on a global basis. A second-rate system of public education will result in a second-class Texas.
Children in any Texas school district must have access to educational opportunities that are appropriate to their needs and similar in quality to those provided to children in any other Texas district. An efficient school funding system does not pick winners and losers among children; all children are given an even chance.
An efficient system is devoid of waste. Differences in funding that are not justified by differences in either tax effort or educational and operational costs that are beyond a district’s control must be eliminated in order for available resources to be focused on real costs.
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6. The Foundation Formula System
The first step to building anything of importance is to build a solid foundation and supporting structure. Without that, it cannot stand.
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7. The Foundation School Program
Maintenance & Operation (M&O)
Generally, the costs of running the school district
Interest & Sinking (I&S)
Generally, to make bond payments
Local Funding
State Funding
Ad valorem or Property tax collections generated by a locally-adopted I&S tax rate
Instructional Facilities Allotment (IFA)
& Existing Debt Allotment (EDA)
Tier 1 Basic
Instructional Program
Regular Program Allotment
- Special Education
- Compensatory Education
Bilingual Education
Career & Technology Education
Transportation
New Instructional Facility (NIFA)
- Public Education Grant
High School Allotment
Gifted & Talented
9 Special Purpose Allotments
Tier 2 Enrichment
Tier 2, Level 1 Golden Pennies
First 6 pennies of adopted M&O tax rate above the compressed tax rate; called “golden” because high funding level and no recapture
All pennies of M&O tax rate above the golden pennies (at least 11); called “copper” because low funding level and recaptured
Tier 2, Level 2 Copper Pennies

8. The Foundation School Program
Maintenance & Operation (M&O)
Generally, the costs of running the school district
Interest & Sinking (I&S)
Generally, to make bond payments
Local Funding
State Funding
Ad valorem or Property tax collections generated by a locally-adopted I&S tax rate
Instructional Facilities Allotment (IFA)
& Existing Debt Allotment (EDA)
Tier 1 Basic
Instructional Program
Regular Program Allotment
- Special Education
- Compensatory Education
Bilingual Education
Career & Technology Education
Transportation
New Instructional Facility (NIFA)
- Public Education Grant
High School Allotment
Gifted & Talented
9 Special Purpose Allotments
Tier 2 Enrichment
Tier 2, Level 1 Golden Pennies
First 6 pennies of adopted M&O tax rate above the compressed tax rate; called “golden” because high funding level and no recapture
All pennies of M&O tax rate above the golden pennies (at least 11); called “copper” because low funding level and recaptured
Tier 2, Level 2 Copper Pennies

9. Band-Aids = Inefficiencies = Stealing from Kids
Texas does not have an inexhaustible supply of public funds
There will always be a limited amount of funds available for public education
Every expenditure by the State, School Districts, and Charter Schools must be justifiable, and waste must be avoided
All funding must address state-recognized costs, and those that don’t, must be eliminated
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10. There Are No Free Lunches
When a dollar is spent in a way that does not address known costs, there is one less dollar available to be spent in an efficient way
The State, school districts, and charter schools can spend a dollar only one time
A dollar misspent is an opportunity wasted
An opportunity wasted is a child hurt
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11. Texas Clings to Inefficiency and Waste
Hold-harmlesses that become government entitlements
The use of taxable values from the prior year to determine the Tier 1 local fund assignment (LFA) and the local shares for Tier 2
Guaranteeing Tier 1 funding in excess of the Tier 1 allotments
ASF per capita distribution, the High School Allotment, and the New Instructional Facilities Allotment (NIFA)
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12. Texas Clings to Inefficiency and Waste
Early agreement credits – a discount on the amount of recapture if a district signs its agreement to purchase attendance credits from the State by September 1
Minimum of 5% of recapture amount or $80 per credit purchased
Outside-the-system funding, such as the staff allotment
High School Allotment – a giveaway masquerading as cost- based
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13. Since the pot of money available for public education is finite, these public fund gifts (what else would you call them?) reduce the funding that would otherwise be available to all districts via formula (i.e., cost-based) funding.
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14. This means other districts (and their taxpayers) are actually footing the bill for them. Non-privileged districts have less to spend and must tax at higher levels to subsidize higher funding and lower tax rates for a handful of specially-treated districts.
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15. The Gap Calculator
Truth aggravates the hell out of people who benefit for a lie.
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16. Rick Gray Interview
Ideology over Justice
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18. Too many decry our broken system, while foolishly insisting we must keep the parts that are broken—then we can make it even by giving everyone more.
A quality formula system, covered by layers of visceral fat, that negatively affects its function and integrity. It benefits the few, and tells the rest they can go suck eggs.
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19. Formula Funding (Tiers 1 & 2 Allotments)
Our M&O System Now
Funding Gap per WADA
Formula Funding (Tiers 1 & 2 Allotments)
Inefficiency
Gifts of Public Funds
Waste?
Formula Funding (Tiers 1 & 2 Allotments)
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20. Formula Funding (Tiers 1 & 2 Allotments)
Funding Gap per WADA
Formula Funding (Tiers 1 & 2 Allotments)
Inefficiency
Gifts of Public Funds
Waste?
BA/EWL increase
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21. Formula Funding (Tiers 1 & 2 Allotments)
Funding Gap per WADA
Inefficiency
Formula Funding (Tiers 1 & 2 Allotments)
Formula Funding (Tiers 1 & 2 Allotments)
Even More BA/EWL increase
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22. Examples of our ongoing foolishness
We are either for all children, or we are not. Saying we are, while acting otherwise doesn’t let us skate by the sad reality of what we truly are. Isn’t it clear that we shouldn’t cheat children?
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23. Target Revenue/ASATR (2007) and Wealth Hold-Harmless (1993)
Temporary Hold-Harmlesses
that Never Go Away
Target Revenue/ASATR (2007) and Wealth Hold-Harmless (1993)
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25. FY 2015 ASATR and M&O Tax Rate
ASATR per WADA
Average Adopted Tax Rate
Average Revenue per WADA
More than $1000
$1.018
$7,416
None
$1.094
$6,117
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26. Will Target Revenue/ASATR Go Away on its Own?
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27. Every district has a Target Revenue
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28. Every district has a Formula Funding Level
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29. Additional State Aide For Tax Reduction (ASATR)
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30. Is ASATR a Temporary Hold-Harmless?
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31. Does it slowly go away?
ASATR
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32. Basic Allotment/Equalized Wealth Level
…verrrrryyyy slowly
Basic Allotment/Equalized Wealth Level
ASATR Cost
Number of Districts
$5,140/$514,000 (Current Law)
$328,000,000
287
Plus $500/$50,000
$203,000,000
167
Plus $1,000/$100,000
$136,000,000
105
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33. …even with the mandatory Fractional Funding fix
Basic Allotment/Equalized Wealth Level
ASATR Cost
Number of Districts
$5,140/$514,000 (Current Law)
$328,000,000
287
Plus $500/$50,000
$181,000,000
146
Plus $1,000/$100,000
$121,000,000 96
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34. Outdated Practices
Using Prior Year Values to determine the Local Fund Assignment and Tier 2 Local Shares, even though Districts tax on Current Year Values
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35. Extra Tier 1 Revenue
Local Fund Assignment (Prior Year’s Values at CTR)
Prior Year
Current Year
Increasing Taxable Values
Tier 1 Collections at CTR
When taxable values grow, using Prior Year’s Taxable Values to determine M&O local shares, it provides a bonus that ends up costing the State funds that could otherwise be rolled into the Basic Allotment/EWL and benefit all districts and charter schools equally.
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36. Untapped Taxable Value
District A (2% Growth)
District B (2% Growth)
Taxable Value
Untapped Taxable Value
Bonus at $1.00 Tier 1 Rate
Year 0
100,000,000
1,000,000,000
Year 1
102,000,000
2,000,000
20,000
1,020,000,000
20,000,000
200,000
Year 2
104,040,000
2,040,000
20,400
1,040,400,000
20,400,000
204,000
Year 3
106,120,800
2,080,800
20,808
1,061,208,000
20,808,000
208,080
Year 4
108,243,216
2,122,416
21,224
1,082,432,160
21,224,160
212,242
Year 5
110,408,080
2,164,864
21,649
1,104,080,803
21,648,643
216,486
Totals
104,081
1,040,808
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38. 7/13/2016
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39. Equity Center Standing Up for Texas Taxpayers and Children
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40. Texas Taxpayer & Student Fairness Coalition
What the decision means for children, taxpayers, the Legislature, and Public Education
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41. “TTSFC refers us to calculations from its expert Dr
“TTSFC refers us to calculations from its expert Dr. Wayne Pierce, showing a slightly different ratio. It shows, for 2013–14, average M&O revenue per student in WADA for the top and bottom 5% of districts at $8,146 and $5,737, for a ratio of 1.42.”
— Page 73 of Texas Supreme Court decision, Texas Taxpayer & Student Fairness Coalition litigation, emphasis added.
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42. constitutionally unacceptable yields in Edgewood I.
The parties offered yield evidence in today’s case, including calculations by Dawn-Fisher,
a State expert, and Pierce, an expert for the Financial Efficiency Plaintiffs. Depending on the
methods used and the precise figures being measured,268 the yields vary considerably, but overall are
264 Edgewood I, 777 S.W.2d at 397.
265 See id. at 393 (describing the richest districts as spending an average of $7,233 per students at an average
tax rate of 47 cents, while the poorest spent an average of $2,978 at an average tax rate of 74.5 cents).
S.W.2d at 730–31.
267 Id. at 731 n.12.
268 As described supra note 260, there are numerous parameters that can be used in making these sorts of
calculations, and depending on the precise methods employed, the ultimate resulting ratios can vary. 76
much closer to the constitutionally acceptable yields described in Edgewood IV than the
constitutionally unacceptable yields in Edgewood I.
Using 2013 data and 2014 legislative parameters, and considering actual tax rates, Dawn-
Fisher’s assessed the richest and poorest 10% of districts, with each group consisting of 102 districts,
inviting a comparison to Edgewood I’s richest and poorest 100 districts. She calculated weighted
average M&O yields of for the richest 10% and for the poorest, for a ratio of
Looking to the richest and poorest 15% of districts yielded a ratio of These ratios fall within
the ratios of 1.36 and 1.07 described in Edgewood IV, which considered the richest and poorest 15%
of districts, and are far below the ratio of 3.85 in Edgewood I, which considered the richest and
poorest 100 districts. Similar though not identical ratios can be derived from Pierce’s calculations,
which also considered 2013 actual tax rates and 2014 legislative parameters. Looking at the districts
comprising the top and bottom 15% of students, as was done in Edgewood IV, produced average
M&O yields of and 51.94, for a ratio of Pierce’s data showed a ratio of 1.56 for the top
and bottom 15% when Pierce combined M&O and I&S average revenues. These ratios are higher
than the ratios described in Edgewood IV (1.36 and 1.07) but still far below the 3.85 ratio in
Edgewood I.
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44. TTSFC refers us to calculations from its expert Dr
TTSFC refers us to calculations from its expert Dr. Wayne Pierce, showing a slightly different ratio. It shows, for 2013–14, average M&O revenue per student in WADA for the top and bottom 5% of districts at $8,146 and $5,737, $9,021 and $5,757 for a ratio of
In what world is 157% more (or 157% less) to educate Texas children SIMILAR revenue?
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45. $9,021 minus $5,757 = $3,264 per WADA Funding Gap
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46. Average classroom disadvantage for the poorest 5% of districts
(when compared to the wealthiest 5% of districts)
$3,264 per WADA Funding Gap
multiplied by the
30.1 WADA
in an average classroom of 22 children for this group
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47. $98,246 less funding on average for every classroom of 22 children for the poorest 5% of districts
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48. $98,246 less funding per classroom
and at an
11.3 cent higher tax rate
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49. The Supreme Court decision in the Texas Taxpayer & Student Fairness Coalition case, signed by all 9 Justices, contains the following extremely important sentence with respect to equity.
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50. Our basic framework for deciding this issue has not changed since Edgewood I, where we held that ‘districts must have substantially equal access to similar revenues per pupil at similar levels of tax effort’.
Our basic framework for deciding this issue has not changed since Edgewood I, where we held that ‘districts must have substantially equal access to similar revenues per pupil at similar levels of tax effort’.
Our basic framework for deciding this issue has not changed since Edgewood I, where we held that ‘districts must have substantially equal access to similar revenues per pupil at similar levels of tax effort’.
Our basic framework for deciding this issue has not changed since Edgewood I, where we held that ‘districts must have substantially equal access to similar revenues per pupil at similar levels of tax effort’.
— Page 69-Opinion of the Court, Texas Taxpayer & Student Fairness Coalition litigation
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