Transcript Document

School Finance 101
Your Name
Your School District
Contact Information
Date:
School Funding Sources
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Shared Arrangement
State Funding - sales tax revenue,
business taxes, etc.
Local Funding - property taxes
Federal - smallest source, usually
dedicated to specific purpose
Sources of Revenue
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School Year 2007
Funds for these three sources
amounted to $39.5 billion.
 Local share = 55%
 State share = 33.9%
 Federal share = 11.5%
Basic Principles
of School Finance
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Equity
Equal access to resources for public
education for all school districts
regardless of property wealth.
Lessen the disparity in per-student
resources across school districts that
result from relying heavily on local
property taxes to fund schools.
Basic Principles
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Meaningful Discretion Is…
The ability of a school board to
set tax rates and provide resources
to educate students at or above
state requirements.
A cornerstone of 2005 Texas
Supreme Court ruling on school
finance that guided new
legislation in 2006.
“Hold Harmless”
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In 2006 the Legislature compressed local tax
rates by 1/3, providing tax relief to property
taxpayers.
To make up for the lost revenue to schools
due to tax compression, the state guaranteed
to “hold harmless” each district at the better
of its 2005 or 2006 funding levels per
student.
Hold harmless state funding, plus teacher
salary increase funds, and a special allotment
for high schools form the Revenue Target for
each district.
Where Are We Now?
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Districts are currently in the 3rd
year of using Revenue Targets.
Translation: Funding for the
2008-09 school year is based on
out-of-date funding levels from
2005 or 2006.
Where Are We Now?
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Revenue Targets are out of date, and
the school funding system is now less
equitable.
Per-student Target Revenue amounts
range from a low $3,600 to over
$12,000 (average is $5,075).
There is no link between Revenue
Targets and the cost of state
requirements for student instruction
and district administration.
Tax Rate Increases
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Districts may raise property tax rates up to 17
cents above compressed tax.
The first 4 cents can be levied by the school
board without an election. These pennies are
guaranteed to generate the same level of
revenue as Austin ISD – Chapter 41.
The next 2 cents also yield the same revenue
as Austin ISD, but the board must get voter
approval to levy these two pennies.
The remaining 11 cents also require voter
approval and do not yield the higher Austin
ISD level of revenue.
Tax Rate Increases
Aside from money provided for
student growth, the only way for
districts to access additional
money is by asking local voters to
approve a tax rate increase or
asking the Legislature for more
resources.
Effect of Property Value
Increases
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There is an inverse relationship between
local property tax revenue and state
funding for schools.
Bottom line: If property values increase,
the state’s obligation to provide funding to
that district decreases.
The estimated benefit to the state of
property value increases is about $2
billion a biennium
New Cost Drivers
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Rising transportation and utility prices
Rising food prices
Rising teacher salaries
Competition for auxiliary staff and
rising salaries for those staff
Increasing state academic standards
Increasing number of required courses
(4x4 Rule, 12 hours of college credit)
State mandates (unfunded or under
funded)
Current Funding Problems
 The funding system put in place in
2006 was supposed to be temporary.
 The school finance system fails to
account for student instructional needs
or cost differences between districts.
 Irrational Revenue Targets exacerbate
inequities.
 If there is no fix in the 2009 session,
system will continue through 2011-12
school year.
Current Funding Problems
 District options for new money
through tax rate elections.
 Current system fails to take into
account rising costs of fuel,
salaries, utilities, insurance,
higher standards, etc.
 No inflation adjustment.
 Districts will reach the $1.17 cap.
Solutions
 Conduct a state study in 2010 to examine
the true cost of education as well as a way
to fund education fairly.
 Provide an inflation adjustment to
Revenue Targets for the next two years.
 Increase state support for facilities
funding.
 Adjust current Revenue Targets.
Solutions
 Permit school districts more
flexibility to set tax rates.
 Increase funding for technology
and transportation.
 Provide districts with
discretionary money to meet
unique local needs.
 Increase the special allotment to
fund high school programs.
What Next?
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Contact your legislator to express
concern for the adequacy and
fairness of the school funding
system.
Describe the local situation to
your legislator so he or she has a
clear picture of the needs in your
district.