Bloomberg News

Texas Republicans Won’t Budge on School Spending After Ruling

February 18, 2013

Texas Governor Rick Perry

Texas Governor Rick Perry says that keeping taxes low is the key to attracting business and expanding the second-largest state's economy. Photographer: Scott Eells/Bloomberg

The Eanes school district in suburban Austin, Texas, spent $7,921 per student last year. Twenty miles away, the Pflugerville school district, whose population includes far more low-income students, spent about $1,000 less, resulting in lower teacher salaries and more children for every special education teacher.

It wasn’t supposed to be this way. A state formula for distributing money -- approved seven years ago, after the Texas Supreme Court found the previous formula to be unconstitutional -- was designed partly to promote equality between rich and poor districts with big gaps in property tax collections.

A state judge ruled this month that the funding system is inequitable and doesn’t meet students’ needs. The ruling has set up a battle between Democratic state lawmakers seeking more money for schools and Republicans who control the legislature and refuse to consider changes until the ruling is appealed.

“The state funding formula is random and capricious and we have to do something about it,” said Pflugerville Independent School District Superintendent Charles Dupre in an interview. There isn’t enough money to pay teachers a competitive salary, he said. “The constant message I’m getting from good, high- performance people is that I love what I’m doing, but you can’t give me more so I’m moving on.”

Texas is among 10 states facing legal challenges over school finance, according to the Washington-based National Conference of State Legislators. Most of the cases involve how much must be spent to provide an acceptable education, said Dan Thatcher, a senior policy analyst for the conference.

Funding Disparities

Disparities in Texas school funding have become more pronounced as enrollment has grown and the state has approved property tax cuts that prevented funding from keeping pace, said Dan Casey, a partner at Moak, Casey & Associates, an Austin research firm specializing in school finance.

Governor Rick Perry, 62, says that keeping taxes low is the key to attracting business and expanding the second-largest state’s economy. Last week, he traveled to California, the largest state, to persuade companies to relocate.

Perry has “created such an anti-tax fervor that putting in any additional funding is unlikely,” said Albert Kauffman, a law professor at St. Mary’s University in San Antonio who represented low-income schools in previous financing lawsuits.

On Feb. 5, Texas District Judge John Dietz in Austin sided with lawyers for most of the state’s school districts. He ruled that the state formula used to determine how much each school system receives is “inefficient, inequitable and unsuitable” and that districts are “arbitrarily” funded. Texas contends that schools have sufficient funding.

Perry declined to comment on Dietz’ ruling, spokesman Josh Havens said.

Property Taxes

The state’s schools receive money from the federal government, state and local taxes. Rick Gray, an attorney for more than 400 poorer Texas school districts, told Dietz that the districts he represents tax property at higher rates than richer ones and yet receive less revenue per student from the state.

Republican House Speaker Joe Straus rejected Democrats’ requests for debate on school funding because he wants a final court resolution before considering the issue, said Erin Daly, a spokeswoman.

“Until the courts give us direction, we can’t act,” said state Representative Gary Elkins, a Houston Republican. “But at some point we’re going to have to equalize funding so that a district isn’t getting $1,000 per student more than a district within a 30-mile radius.”

Reserve Fund

Texas should address school inequities by tapping the state’s reserve fund and by using the tax collections, said state Representative Trey Martinez Fischer, a San Antonio Democrat.

“We’ve got a lot of money right now, but we don’t have the will,” he said.

Texas spends about $35 billion annually on public schools, little changed from 2004 when adjusted for inflation, the state’s nonpartisan Legislative Budget Board said in a January 2012 report. Average daily attendance since 2004 has grown to about 4.7 million, an increase of about 700,000 students. Perry has been Texas’ governor since December 2000, when he succeeded George W. Bush.

Texas ranked 44th in estimated per-pupil spending in the 2011-2012 school year, according to a June 2011 report by the National Education Association, a Washington-based teachers’ union. Average spending per pupil in Texas was $8,908 compared with a national average of $11,463.

Low-Income Families

Pflugerville has needier students, with 53 percent of those enrolled from low-income families, compared with 3 percent at Eanes Independent School District.

Pflugerville spent $6,907 per student in the last school year, according to the Texas Education Agency, whose data includes federal, state and local funding.

The school district has one special education teacher for every 15 students, compared to one instructor for every six children at Eanes.

Pflugerville, whose schools enroll 23,000, has experienced rapid growth as many residents moved to the community for lower- cost housing. Housing prices are higher in Eanes, whose school population is 7,776.

Both school districts are part of the lawsuit against the state.

The funding formulas for Texas schools were based on 2005 spending levels, which penalized Pflugerville and other districts that had been more frugal than peers, Dupre said.

Job Cuts

As the state’s school population increased, funding didn’t keep pace.

Pflugerville eliminated 40 teaching and administrative positions last year, about 1.5 percent of the district’s employees, Dupre said.

Eanes doesn’t have enough money to meet the community’s expectations, Superintendent Nola Wellman said in an e-mail. Teacher pay at Eanes is higher than other districts because instructors stay longer, she said.

Because spending hasn’t kept up with enrollment, parents spend more time raising funds, said Diane Harvey Anderson, president of the parent-teacher organization at Pflugerville’s Connally High School.

“I’ve seen layoffs happen, I’ve seen services cut and it isn’t fair to our teachers, who are being asked to do more with less resources,” Anderson said.

The cases are consolidated as Fort Bend Independent School District v. Texas Education Agency, D-1-GV-11-002028, Texas 200th Judicial District Court, Travis County (Austin).

To contact the reporter on this story: David Mildenberg in Austin at dmildenberg@bloomberg.net

To contact the editor responsible for this story: Stephen Merelman at smerelman@bloomberg.net


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