Texas School Coalition Community Group Presentation October 2015

Court DecisionLegislative Response Edgewood I (1989)Senate Bill 1 (1990) Edgewood II (1991)Senate Bill 351 (1991) Edgewood III (1992)Prop. 1 (failed), SB 7 (1993) Edgewood IV (1995)System found constitutional West Orange-Cove (2005)House Bill 1 (2006) TX Taxpayer & Student Fairness (201 ? ) ???? From the Courthouse to the Capitol

School Finance Case Numbers  4 Plaintiff groups representing 591 school districts, and 2 intervenor groups  Trial: 45 days (over 13 weeks), with over 80 witnesses & more than 5,000 exhibits  Supplemental hearing: 11 days (over 3 weeks), with 12 additional witnesses and more than 700 exhibits  4 year process (so far), spanning 2 regular legislative sessions

Calhoun County ISD Plaintiffs file claims against State, along with 3 other school district plaintiff groups 12/11/2011 Judge Dietz announces ruling declaring system unconstitutional 2/4/2013 Final Judgment issued, declaring system unconstitutional 8/28/2014 Texas Supreme Court takes the case 1/23/2015 Texas Primary Election (assuming ruling to be issued after this date) 3/1/2016 Texas Legislature cuts education funding 5/25/2011 School Finance Trial begins 10/22/2012 Supplemental Hearing begins to address changes made by 83rd Legislature 1/21/2014 Appeal of Judgment is filed 9/26/2014 Oral Arguments before the Texas Supreme Court 9/1/ th Legislative Session begins 1/10/2017 1/8/ /27/201383rd Legislative Session 1/13/ /1/201584th Legislative Session 1/10/ /29/ th Legislative Session School Finance Litigation Timeline

“No State ad valorem taxes shall be levied upon any property within this State.” - Texas Constitution, Article VIII, Section 1-e Statewide Property Tax

6 M&O Tax Rate # Districts % Districts ADA% ADA <$ %76, % $1.00 to <$ %242, % $ %2,947, % >$1.04 to <$ %575, % $1.17 and above %797, % M&O Tax Rates for Texas School Districts Based on 2014 adopted tax rates

Statewide Property Tax – from WOC II “The State cannot provide for local supplementation, pressure most of the districts by increasing accreditation standards in an environment of increasing costs to tax at maximum rates in order to afford any supplementation at all, and then argue that it is not controlling local tax rates.”

“A general diffusion of knowledge being essential to the preservation of the liberties and rights of the people, it shall be the duty of the Legislature of the State to establish and make suitable provision for the support and maintenance of an efficient system of public free schools.” - Article VII, Section 1 Constitutional Adequacy

What’s Changed since WOC II? WOC II ( ) Now ( ) Total Enrollment 4,328,0285,232,065 % Economically Disadvantaged 53%60% Inflation Adjusted Total Per-Student Funding $7,128$6,816 % Meeting Final Standard Exit-Level Math Exam 67%47% % Meeting Final Standard Exit-Level English Exam 83%51%

funding funding % increase Overall funding$91.2 billion$106.7 billion17% Formula funding$80.4 billion$94.5 billion18% State programmatic funding $1.0 billion$1.8 billion77% Annual, per student$9,771$10,6729% Amicus Brief - Governor of Texas

Source: Legislative Budget Board With the exception of 2013, funding is lower than any other time in the last in the past 10 years in constant dollars.

Funding Funding % Change Instructional Formula Funding per student $8,366$8,213-2% State Programmatic Funding $2.4 billion$1.8 billion-25% Plaintiff response to Governor Abbott These numbers have not been adjusted to account for inflation. The Texas Comptroller has predicted 1.9% inflation per year for the next two years.

Chapter 41 & Recapture

 235 districts to receive ASATR in  For a total of $328 million  Average of $719 per WADA (9.7% of M&O Revenue) for qualifying districts  For some districts, ASATR makes up 30-40% of M&O Revenue Additional State Aid for Tax Reduction (ASATR) ASATR September 1, 2017

 $6.4 billion was left in General Revenue beneath the pay-as-you go limit  $2.9 billion remaining under spending limit  Plus $11.1 billion in the Rainy Day Fund What the Legislature left in the bank

 $3.8 billion expected in General Revenue  Plus $10.4 billion in the Rainy Day Fund Comptroller’s revised Revenue Estimate

When will the Texas Supreme Court rule?

“it’s really hard to fathom…that if Texas policymakers began with a blank sheet of paper today that they would create anything resembling sort of the complex sort of Rube Goldberg kind of contraption that we have that seems to lurch from one lawsuit to another Band-Aid on top of Band-Aid, on top of Post-it note, on top of paperclip sort of all bound together with a rubber band…” - Justice Willett The Goldberg Pencil Sharpener