Part 3 – Analyzing Contrasts in Two Texas School Districts

Funding for public schools in Texas comes from property taxes, state funds, and federal funds. The majority of funding comes from local property taxes and state funding. The purpose of weighting the funding (WADA) is to ensure that all school districts, regardless of property wealth, receive equal access to similar revenue per student at similar tax effort.   Although the districts are similar in size, District 1 has more bilingual (D1=41%, D2=2%) and special education (D1=9%, D2=7%) students. District 1 also has more economically disadvantaged students than District 2 (D1=93.3%, D2=20.7%).   

These two districts are perfect examples of why the current funding system does not accomplish what it was intended to accomplish.  These two districts have very similar numbers of students, however the students in District 1 have a higher percentage of special needs that require additional instructional support.  The WADA is designed to provide this district additional funding to address those needs, and it does.  Even though District 2 has a higher ADA, meaning more of their students actually come to school, District 1 has a higher WADA because the students who are coming to school have greater needs.  When looking just at the WADA, the system seems to work.  However, it is when these two district are compared in total revenue that the problem becomes evident.  

To determine the base amount of money a district receives, the state uses a “revenue per WADA” rate.  This rate is set for each district but is not consistent across districts.  Between these two districts, there is a $2,162 difference in the per WADA rate. Across the state, these revenue amounts range in average from $2,500 to over $12,000 per WADA.   Even though the total number of students in these two districts only differs by 13 students, the lower revenue per WADA rate for District 1 significantly reduces the total base revenue.  Even with an additional 761 WADA, District 1 generates $6,522,581 less than District 2.  As a result, these two districts have exactly the same number of total teacher FTEs (265).   So the intention of the WADA to provide more money and staff to address the higher needs of the students in District 1 does not bring about additional services to those students when compared to District 2.

There are other obvious differences between districts 1 and 2 with each significantly impacting the distribution of funds.  District 2 could be considered property wealthy and district 1 property poor.  The CEI or cost of education index is slightly higher in district 1 than in 2.  The local fund assignment for district 1 has little impact on tier funding when subtracted. The local fund assignment for district 2 basically eliminates tier funding and is considerably less than what was locally collected.  Finally, district 1 has more students receiving special services than District 2.  These are significant marks when considering the formulas for all sources of funding.

It appears that district 2 has a large amount of industry and/or greater personal property wealth when considering their $2,995,592,970 state adjusted property value as opposed to district 1’s $141,705,076 valuation.  This is the argument used by past legislators in an attempt to create the “Robin Hood” act for state funding issues.  The factors discussed next help to explain how this occurs but may continue to be argued as unfair.  How do we provide equity in education for all children without an unfair system that takes from wealthier tax bases?  The idea of additional revenue generated by an income tax, state gambling revenues, etc…has been mentioned as possibilities.

    The CEI is a number set to adjust for the cost of delivering an adequate education in a particular area.  From our discussion it seems that political influence may be the main contributor to the number established.  It would seem, though, that district 2 would have a higher CEI if this were the case.

    There is a tremendous complexity in the application of formulas used for creating the final allotment but the local fund assignment seems to create a large gap and penalize district 2.  District 2 collected a total of $44,715,365 and was assigned $29,955,930 while district 1 collected $1,464,211 and was assigned $1,417,051.  The effect of tier I, II, and III monies greatly benefited district 1.  The higher number of students receiving special services certainly enhanced district 1’s allotment while providing little to benefit district 2.

All of the above factors contribute to the differences in WADA allocations but do little to satisfy either side in the debate over school finance. This is a difficult and complicated process that requires much time and energy to adequately address the issue of school finance.

Funding for Texas's public schools comes from property taxes, state funds, and federal funds. The majority of funding comes from local property taxes, which are collected by school districts, and state funding. M&O and WADA funds are meant to ensure that all school districts, regardless of property wealth, receive equal access to similar revenue per student at similar tax effort.   Although the districts are similar in size, District 1 has more bilingual (D1=41%, D2=2%) and special education (D1=9%, D2=7%) students. District 1 also has more economically disadvantaged students than District 2 (D1=93.3%, D2=20.7%).   When keeping in mind the definition of WADA and the purpose of the M&O funds, one would assume that District 1 would receive more funding however a weighted student count is used to distribute guaranteed yield funding.   Funding is based on property value instead of the number of students requiring more support to be educated so District 2 is receiving more funds.

When comparing the two districts, District 1 meets the criteria for more Title 1 funds because it has more students requiring special services.  On the other hand, District 2 meets the criteria for more funding when taking into the consideration of the compressed tax rate and M&O allotments including salary allotments for teaching staff.

 Because District 1 receives less funding, it has a higher teacher-student ratio.  I would assume that because of the high bilingual and economic disadvantaged population, high teacher-student ratio, and limited funds for resources, District 1’s school ratings would be lower than District 2.  Lower school ratings do not attract home buyers in the area so District 1 will also have a difficult time raising the necessary amount of revenue based on property tax.