1. Funding K-12 Education: State Experiences in Strengthening School Funding Formulas
10:30 – 11:40 a.m.
Room: Roosevelt 1

2. Primary School Funding Formula
1st Generation: Flat payment 2nd Generation: Take district wealth into account 3rd Generation: Take both relative wealth & student needs into account 4th Generation: 3rd gen plus provides flexibility to districts 5th Generation: Ensuring that the resources are targeted to the student

3. School Funding Formulas in Each StateWA OR CA MT ID NV AZ UT WY CO NM TX OK KS NE SD ND MN IA MO AR LA MS AL GA FL SC TN NC IL WI MI OH IN KY WV VA PA NY ME VT NH NJ DE MD
Washington D.C. MA CT RI AK HI
Foundation Programs (35)
Resource Allocation Systems (7)
Other (8)

4. Transitioning to a New Funding Formula
Legislative Action
Governor Initiative/Voter Initiative
Court Mandate

5. Major Wyoming School Finance Cases
The Wyoming Supreme Court’s five major K-12 school finance rulings
Washakie 1980 – The Court held the major portions of the Wyoming school finance system, including the financing for capital facilities, to be unconstitutional. The Legislature’s response was implemented in the 1983 legislative session.
Campbell I 1995 – The Court held the Wyoming school finance system to be unconstitutional. The Legislature’s response in a 1997 special session was to attempt to fund education through a “cost-based” approach.
Campbell II 2001 – The Court held the Wyoming school finance system to be unconstitutional.
Campbell III 2001 – A rehearing on Campbell II, specific to the financing of capital outlay. The Court held the Wyoming school finance system for capital outlay to be unconstitutional. The Legislature’s response to Campbell II and III was to continue to refine the school finance formula and capital construction funding.
Campbell IV 2008 – The Court held the Wyoming school finance system to be constitutional and released its jurisdiction.

6. Wyoming K-12 Funding Model (State Funding) per Pupil
Note: Not adjusted for inflation.

7. Texas 2018 Commission on Public School Finance
Legislatively mandated; Commission report due Dec. 2018; Commission includes members of TX legislature and appointees from Gov., Lt. Gov., and Speaker
One Key Commission Challenge:
TX has very limited additional tax revenue to spend on public education. With little additional funding, how can the TX school finance system be proactively designed/engineered to encourage districts to use existing funds to improve student outcomes?
Pay high performing teachers more, differentiated pay
Provide more funding to districts with extreme poverty
Focus on early education
Remove state strings/mandates on local funding use
Encourage programs that improve student performance: math blended learning and STEM

8. Texas Supreme Court School Finance History
Date/Case
Holding
Supreme Court Holding
1989
Edgewood I
Unconstitutional
State relies on local property taxes to fund 50% of system; therefore, state must equalize per student funding disparities between property poor and property rich districts
1991
Edgewood II
Similar
1992
Edgewood III
State has illegally adopted statewide property tax in violation of TX constitution
1995
Edgewood IV
Constitutional
State recapture (collection) of local property taxes from property wealthy districts to provide to property poor districts to equalize wealth was constitutional
2005
West-Orange Cove
Local property tax cap of $1.50 was illegal statewide property tax because local districts had no meaningful discretion in setting tax rates
WATERSHED CASE:
2016 Morath
System design is up to legislature, extreme limit on judicial intervention in legislative policy
No clear evidence increased funding = improved student results
No illegal statewide property tax; no unconstitutional district wealth disparities; recapture constitutional

9. Texas Recapture
Recapture = To equalize per student funding across similar districts, State collects local property taxes from districts with high per student property wealth, and distributes that funding to districts with low per student property wealth.
Illustrative Example:
Property Rich District A: Taxing at $1.00 and has 100 eco. devo. students. It raises $20k per student per year in local property tax revenue.
Property Poor District B: Exact same as District A, taxing at $1.00 and has 100 eco. devo. students, but raises only $5K per student per year
Texas will (1) recapture property tax revenue from District A, and (2) provide recaptured funding to District B, along with significant State revenue, so that both districts have closer to $9k per student per year.
Asserted Problems with Recapture
Urban and rural districts with 70%+ economically disadvantaged students want to stop paying as much recapture and keep their local property tax revenue to spend on their district’s high needs students
Many districts now recaptured as property wealth in Texas is rapidly rising

10. Questions? Emily Parker Policy Analyst
Education Commission of the States
Matthew Willmarth
Senior School Finance Analyst
Wyoming Legislative Service Office
Kara Belew Senior Education Advisor Center for Innovation in Education
Texas Public Policy Foundation
Questions?

11. Your Education Policy Team.

12. Download session resources: bit.ly/ecsnf18resources