Transcript Slide 1

Disclaimer
The following presentation has not been approved or
endorsed by the GISD Board of Trustees or the GISD
Administration.
This information contained in this presentation is my sole
responsibility and I take full responsibility for any factual
errors.
- Norman Pappous
1
This presentation will demonstrate that the
terms of the Conciliation Agreement will:

Harm GISD’s tax base and GISD’s ability to
collect the same level of revenue without
raising taxes.

Force GISD to adopt budgets that spread
resources thinner among our students,
teachers, and staff than other communities
that have no additional requirements
attached to their federal relief funding.
2
You’re
out of
order!
GHA, the City of
Galveston and GISD
did not negotiate the
Conciliation
Agreement or sign it.
It is being enforced
by the State.
It was never
created,
ordered, or
reviewed by any
legislature or
court!
Conciliation Agreement requires Galveston to house a minimum number of
“Economically Disadvantaged” (ED) families. No other community has this
requirement in order to receive their federal funding.
3
Carrot

Choose to rebuild all
Stick

Choose to not rebuild
your public housing
all your public
units and we will give
housing units and the
the city $200 million.
city will not receive
any federal funds.
No other community in Galveston County is mentioned in
the Conciliation Agreement.
No other Galveston County school district will be
adversely impacted.
4
New ED residents moving to
GISD to fill vacancies
created by GHA families
moving into PH.
New residents moving into
GHA PH and GISD
(per Harish)
Former GHA residents
now attending GISD
(per Harish)
• 475 new families
• 665 new students
• 94 families
• 140 students
• 475 current families
• 665 current
students
These numbers do not include
future ED students living in GHA
“mixed-income” housing.
5
School districts
not adversely
affected by
Conciliation
Agreement
School district adversely
affected by Conciliation
Agreement
.
6
Galveston
County offers
over 88% of all
public housing
residents just
one school
district to
attend: GISD.
Housing Authority
residents cannot
attend these
school districts
Housing Authority residents
can attend these school
districts
Over 65% of all
Section 8
vouchers in
Galveston
County are
issued by GHA
.
The
Conciliation Agreement provides for those who lost their homes to be rebuilt
on site, or to be bought out and relocated. The students of these families will be
able to use this federal funding to have a choice of what school district and
schools they will attend in the future. Why won't the students of public housing
have this choice? Same funds - unequal benefits.
7
Clear Creek ISD braces for spending cuts
By Hayley Kappes
The Daily News
Published October 24, 2010
LEAGUE CITY — With no expectation of additional state dollars for the next four
years, Clear Creek Independent School District officials are identifying ways to
cut spending.
School districts throughout the state are facing cuts as the
state Legislature prepares to address a shortfall that is
expected to top $20 billion.
The Dallas Morning News
By Robert T. Garrett
10/25/2010
The bottom line: Public schools, college students, and government
employees, not just poor and needy, might very well lose money grants…
“They’ll have to cut,” said for Rep. Heflin, R-Houston, The House’s
budget chief during the last budget meltdown, in 2003. “When you look at the
big numbers, I just don’t think there’s any way you can make it
match without making some reductions in education, both
higher and public education,” [k-12]
8
Does the Conciliation Agreement
have a financial impact on GISD?
Impact Fees and Housing
Affordability
– 2007 report sponsored by HUD’s office of policy
development
5 Types of Impact Fees –
•Parks and libraries
•Police and fire
•Water and Sewer
•Roads,
•Schools
“School impact fees are the most expensive and
libraries the least”
9
Does the Conciliation Agreement
have a financial impact on GISD?
Texas Law used to require
school impact studies!
Tx Gov’t Code 2306.0661 (f)(8)
(f) The rules must require the department to consider the following topics in relation to a
proposed housing development:
(8) the anticipated impact on local school districts;
Judge Terry Means - 2005 written opinion in Arbor Bend Villas v Tarrant
Housing Finance (p.15):
"Furthermore, Texas state law now requires state agencies to consider school impact when
evaluating applications seeing state-issued financial assistance for proposed public housing. See
Tex. Gov't Code Ann. Sec. 2306.0661 (f) (8) (2004). Simply because TCHFC considered the potential impact
that the Arbor-Bend project could have on the community does not constitute direct evidence of familialstatus discrimination. Were the court to rule otherwise, communities would be forced to
embrace unlimited housing projects regardless of the potential impact."
10
The Conciliation Agreement will impact GISD’s tax revenues!
S
D
Price
E
Let’s review some basic
Economics….
Quantity
11
S
S2
D
Price
E
E2
Galveston’s current
housing surplus
creates a lower
equilibrium price
and, therefore, a
lower tax base.
Quantity
12
S
S2
D2 D
Price
E
E2
E3
The current financial
crisis lowers demand
which further lowers
Galveston’s
equilibrium housing
price and tax base.
Quantity
13
S
D2 D
Price
S2
S3 = current
housing surplus
plus new public
and mixed
income units advocated by
GHA and City
Council
E
E2
E3
E4
Tax base has
shrunk further than
necessary due to
the implementation
of the Conciliation
Agreement.
Quantity
14
S
S2
D2 D
Price
Issuing vouchers to
qualified renters would
not further worsen a
bad market!
E
E2
E3
No new housing
introduced into
Galveston’s market by
GHA means equilibrium
Quantity
stays at E3!
15
Letter to the Editor
Occupancy Rates
Mr. Jackson, I have rentals in Galveston and lowered
my rent on a water-view two-bedroom, two-bath
from $900 usual rent to $700, just to get it rented in
this slow market. I have lowered another from $600
to $400. There are so many vacancies in homes and
apartments in Galveston now.

Always, I am agreeable to bargain and adjust the
rent lower if the tenant is desirable, has a good
payment history, a job and understands my rules.
I’ve rented to ex-felons, families, singles, students —
and I do not discriminate. I have no vacancies now.

If you want to live in Galveston, and you have a
DHAP or Section 8 voucher or even if you pay your
own rent, landlords like myself will be willing to
bargain and lower the rent, so don’t be afraid to ask
your own price and come to an agreement….
The landlords are suffering in Galveston and will
need to pay their property taxes soon, so bargain
with them and their agents.
Pat Hazelwood
Galveston



Pre-Ike
85 – 95%
Current
65 – 75%
It is unquestionable
that GHA’s plans will
either lower appraisal
values or lower the
rate of appraisal
value growth!
10/27/2010
Rental Yields Dictate Market and
Appraisal Values!
16
Payment In Lieu Of Tax
“PILOT”
GHA buys, owns, and maintains the
housing – taking it off the tax rolls,
determining rental rates, and making
PILOT payments.
 GISD forced to negotiate for PILOT
payments with GHA.
 PILOT payments funded by annual
Congressional appropriation – did anyone
watch the election returns?!
 22% cuts in non-defense discretionary
spending!


Section 8 Housing




What happens to GISD’s money if
Congress defunds the PILOT program?

$52,000 – Galveston County
“low income” limit eligibility
Private property owners own
and maintain property –
property stays on tax rolls.
GHA provides payments to
renters.
Property owner pays normal tax
due.
GISD gets paid no matter what
happens in Washington DC!
Texas City negotiated with HUD (prior to Ike), got rid of most
of their public housing, and went to a voucher program.
17
There are over 500 Section 8
housing units in Galveston
paying GISD full value on their
property taxes!
GHA PILOT
Payments
Chief Economist for GHA and
Galveston City Council
# of
Housing
Units
2006
$
13,000.00
990
2007
$
4,944.00
990
2008
$
2,819.00
990
2009
$
2,819.00
410
“How is the housing question to be settled then? In present-day
society, it is settled just as any other social question: by the gradual
economic leveling of demand and supply...”
- Engels, “The Housing Question” 1872
18
Annual Impact to GISD Tax Levy 2001 - 2010
Tax Year
1.0%
2.5%
5.0%
7.5%
10.0%
2001
$
377,558
$
943,895
$ 1,887,790
$ 2,831,684
$ 3,775,579
2002
$
407,000
$ 1,017,499
$ 2,034,999
$ 3,052,498
$ 4,069,997
2003
$
458,011
$ 1,145,027
$ 2,290,053
$ 3,435,080
$ 4,580,107
2004
$
535,627
$ 1,339,068
$ 2,678,137
$ 4,017,205
$ 5,356,273
2005
$
596,770
$ 1,491,925
$ 2,983,850
$ 4,475,774
$ 5,967,699
2006
$
613,697
$ 1,534,242
$ 3,068,483
$ 4,602,725
$ 6,136,967
2007
$
520,752
$ 1,301,881
$ 2,603,762
$ 3,905,643
$ 5,207,524
2008
$
579,769
$ 1,449,423
$ 2,898,846
$ 4,348,269
$ 5,797,692
2009
$
455,268
$ 1,138,170
$ 2,276,340
$ 3,414,511
$ 4,552,681
2010
$
504,013
$ 1,260,033
$ 2,520,066
$ 3,780,099
$ 5,040,132
This impact
represents 569
units – financial
impact to GISD
will increase if
City Council
adopts
public/private
partnership
development
(AKA
Subsidized
Housing)!
Actual Annual Tax Levy Impact to FISD, CCISD, LMISD, DISD, TCISD?
$0.00
19
Economics 101
AKA
“The Inescapable Conclusion”
In order to collect the same level of tax revenue,
GISD Trustees will have to raise tax rates!
CCISD, FISD, DISD, LMISD, and TCISD will not!
20
Is the GISD budget being asked to
shoulder more than it’s fair share?
21

It costs significantly more to produce
higher levels of output quality, both in
terms of changes in passing rates and
in the percent of students taking
advanced courses. It also costs districts
more to operate in environments that
require a more resource intensive
instructional technology, such as when
the percentage of economically
disadvantaged students or of special
education students is high or when
districts are relatively remote from
large metropolitan areas. For an
example, when evaluated at the
sample mean values for all explanatory
variables, the cost of educating an
economically disadvantaged
student is 27.6% higher than the
education cost for a student who is not
eligible for free or reduced lunch.
The Adequacy
of Educational
Cost Functions:
Lessons from
Texas
June 2009
*Timothy J. Gronberg
Department of Economics
Texas A&M University
*Dennis W. Jansen
Department of Economics
Texas A&M University
*Lori L. Taylor
The Bush School of Government and
Public Service
Texas A&M University
GISD has the highest
% of economically
disadvantaged students
in the county and one
of the highest in Texas!
GISD only receives 20% more for an economically
disadvantaged student. We lose at least 7.6% per ED student! 22


The state's school
funding system is set up
to pay districts more for
their impoverished
students, but some
believe the extra dollars
aren't enough.
But it costs an estimated
40 percent more to
educate children from
low-income families,
according to expert
testimony in school
funding trials.
More Data….
According to S&P,
economically
disadvantaged
students cost 1.35
times as much to
educate, on
average, as the
non-disadvantaged
student.
Schools see more minority, poor kids
By Gary Scharrer and Ericka Mellon – MySanAntonio.com; Express-News; 01/10/2010
23
% Economically Disadvantaged
19%
64%
22%
Friendswood ISD
Economically
Clear Creek ISD
Disadvantaged
La Marque ISD
students attend the
Dickinson ISD
ISD with the highest
Galveston ISD
Texas City ISD
63%
Agreement
mandates
75%
77%
The Conciliation
percentage of
Economically
Disadvantaged
students!
.
24
“At Risk” AND
31%
“Free Lunch”
29%
DISD
This population of
students require
GISD
2%
9%
LMISD
more resources for a
student to attain a
similar achievement
CCISD
FISD
51%
42%
TCISD
level as a non- “at
risk and free lunch”
student.
GISD has 25 times
more than FISD!
No way to know how many “At Risk and Free Lunch” students will
attend GISD due to the Conciliation Agreement – but isn’t GISD doing
more than our fair share?
25
16.7%
$5306
While GISD has
16.7%
$5306
GISD
LMISD
17.3%
16.3%
$5522
$5205
TCISD
DISD
FISD
CCISD
16.4%
$5239
16.6%
more expensive
obligations than
our County
peers, GISD
receives no
more funding
than they do.
$5280
GISD’s Share of State Funding
26
At Risk & Free Lunch –
% of Student Population
Economically
Disadvantaged
64%
19%
9%
22%
2%
29%
75%
42%
77%
GISD
63%
% of Total ISD State Revenue
for Galveston County
16.7%
The Conciliation
Agreement
reinforces this
disproportionate
distribution of
resources and
obligations!
51%
GISD
16.7%
GISD
17.3%
16.3%
16.4%
16.6%
27
Where was the Impact Study?!
Economically
Minimum
Disadvantaged Economically
Funding
Funding
Per Student
Student
Disadvantaged
shortfall
shortfall
Contribution Contribution Student Cost to (.1 weighting) (.1 weighting)
from Texas
from Texas
GISD
per Student if attending KIPP
$5,400
$6,480
$6,858
($462)
($1,920+)
The Conciliation Agreement adversely impacted
just one school district - GISD!
28
Average # of ED students per GHA family Pre-Ike
1.4
Number of GHA Housing based students Pre-Ike
768
Number of new GHA Housing based
students –
Post-Ike
140
Former GHA Residents living in GISD now
569 - 94 = 475
Number of new ED students to move into
housing vacated by GHA Residents –
Post-Ike
475 * 1.4 = 665
Total number of new ED students attending
GISD because of Conciliation Agreement
665 + 140 = 805
29
Numbers do NOT include GHA’s proposed
“mixed-income” ED students!
Number of
GHA/ED
students
attending PreIke
768
Future number
of ED students
attending GISD
from 569 GHA
units
781
Number of ED
students living
in housing to
be vacated by
GHA residents
665
Annual cost to
GISD not
associated with
GHA’s 569 units Total annual cost
(Represents
to FISD, CCISD,
losing .1
DISD, LMISD, and
weighting)
TCISD
Between
($307,000) &
($1,300,000)
$0
The Conciliation Agreement adversely impacted
just one school district - GISD!
30
Number of ADDITIONAL
Economically Disadvantaged students
0
250
500
Annual Budget
Deficit
750 1000 1250 1500
$0.00
($500,000.00)
($1,000,000.00)
Annual
Deficit
($1,500,000.00)
($2,000,000.00)
Galveston
KIPP
Galveston
($2,500,000.00)
($3,000,000.00)
($3,500,000.00)
($4,000,000.00)
Texas provides an
extra .2 weighting
per economically
disadvantaged
student. Studies
show educating
these students to the
achievement level of
a non-economically
disadvantaged
student requires a .3
weighting! We are
losing at least .1
weighting per student
due to the
Conciliation
Agreement.
31
The Texas Supreme Court weighs in…..
Edgewood vs. Kirby
“We conclude that, in mandating "efficiency," the
constitutional framers and ratifiers did not intend a
system with such vast disparities as now exist. Instead,
they stated clearly that the purpose of an efficient
system was to provide for a "general diffusion of
knowledge." The present system, by contrast, provides
not for a diffusion that is general, but for one that is
limited and unbalanced. The resultant inequalities are
thus directly contrary to the constitutional vision of
efficiency…. There must be a direct and close
correlation between a district's tax effort and the
educational resources available to it; in other words,
districts must have substantially equal access to
similar revenues per pupil at similar levels of tax
effort.”
32
Texas Constitution, Article 1, Bill of Rights,
Section 3, Equal Rights

“All free men, when
they form a social
compact, have equal
rights, and no man,
or set of men, is
entitled to exclusive
separate public
emoluments, or
privileges, but in
consideration of
public services.”
The right of an
education is
fundamental.
 Providing an
education is the
state’s responsibility.
 In meeting it’s
responsibility, the
state cannot favor
some over others.

Conciliation Agreement forces TDHCA to violate
the Texas Constitution
33
FACTS

GISD’s budget will be annually impacted between
$307,000 and $1,300,000+.

GISD’s tax revenue will be annually impacted
$500,000+.

These figures significantly increase with GHA’s
future proposed “mixed income” developments!

Estimated legal costs will be less than one year of
GISD’s lowest impact cost.
34
Conciliation
Agreement was
never ordered,
reviewed, or
approved by any
court!
The Conciliation
Agreement is
signed and the
signatories have
no motivation to
change it.
GISD has no
other option but
to take the
Conciliation
Agreement to a
person that has
never formally
been asked to
review it – a
judge.
Let’s not be naive
35
Votes:
1.
The Board recommends the creation of a $250,000 budget amendment to pay for all
costs associated with stopping any adverse consequences of all Federal funding
distributions not equitably shared by other area ISDs.
2.
The Board instructs the Superintendent to retain a suitable law firm.
3.
The Board instructs the Superintendent to ask the law firm to formally present
recommended options prior to the Board’s January meeting.
4.
The Board recommends that these agenda items, or items that seek to negate or alter
the votes on the above agenda items, will not be revisited until the current Conciliation
Agreement is voided in whole or is approved by a court with appropriate jurisdiction.
36