The State of School Finance in Texas

"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" (emphasis added).

Texas School Finance - The Current State :

• For the 2002-2003 school year, the Texas Education Agency reports spending per pupil as $7,088. The U.S. Department of Education's National Center for Education Statistics reports spending per student in Texas at $6,549 for 2000-2001 which places Texas 37th in the nation on education spending.

•   The state share for public education has decreased to 38 percent, the lowest level since WWII, while the local share has increased to 62 percent. In 1945, the state share for funding public schools was at 55 percent. ( Legislative Budget Board )

• 494 school districts have a tax rate of $1.50 or higher representing 39 percent of all districts and 46.4 percent of all students enrolled in Texas public schools. Over 691 school districts, or approximately 70 percent of all school districts, have a tax rate ranging between $1.45 or higher ( Comptroller's property tax study, 2004 ).

• Texas has a very low state tax burden - 49 th among the 50 states in state taxes per capita (source: The Texas Revenue Primer Revised ).

• According to the House Research Organization general revenue-related funding through the FSP was reduced by $1.2 billion from the previous biennium. Much of the state funding decrease is made up by a $1.3 billion increase in funding from the Federal government, and an increase of $750 million in property taxes recaptured from property-wealthy school districts ( Texas Budget Highlights: Fiscal 2004-05; State Finance Report 78-3, Nov. 17, 2003 ).

• Recaptured monies - $765 M in 2001-2002
  $974 M in 2002-2003
  $1.3 B in 2003-2004 (estimated)

• Close to 63 percent of the $26.7 billion of basic educational costs go to fund instruction ( A Cost Analysis for Texas Public Schools, 2004 ).

• Less than 4 percent of school budgets are actually spent at the central office ( A Cost Analysis for Texas Public Schools, 2004 ).

• About 81 percent of school operating expenditures are for employee salaries and benefits. Of this 81 percent, 65 percent goes to salary expenditures for teachers, 4 percent to salary expenditures for instructional aides, and 12 percent to salary expenditures for auxiliary staff ( A Cost Analysis for Texas Public Schools, 2004 ).

• Education is a people-intensive profession. In total, salaries and benefits accounted for $21.7 billion (81% of basic educational costs). Salaries have seen the most growth in terms of total dollars. However, the costs of benefits has grown at a much faster rate (by 52 percent compared to 38 percent for salaries) ( A Cost Analysis for Texas Public Schools, 2004 ).

• Texas currently spends about $745 per student less than the national average ( Texas Education Agency ).

• Texas ranks 48th among the 50 states in total taxes as a percentage of personal income ( U.S. Census ).

• The average daily attendance ( ADA ) of Texas public schools increases by approximately 2 percent every year, or about 75,000 students. In 2002, enrollment for Texas public schools was almost 3.9 million and it is expected to increase to 4.1 million by 2005.

• Over the last ten years, the population of Texas students who lack English fluency has grown by 48 percent ( Texas Education Agency ).

Compared to Other States:

• According to the RAND Corporation, when comparing the performance of various states it is important to control for family characteristics that impact learning, such as, parental education, family income, age of mother at birth, family size, number of parents in the home, and ethnicity. Texas ranks 42 out of 47 on a weighted measure of family characteristics predicting achievement ( RAND Corporation, Assessing NAEP Achievement in Texas : Good News and Bad News ).

• According to the RAND Corporation, an evaluation of raw NAEP scores from 1999-2000 shows Texas to rank 27 out of 47 states. When the results are controlled for family variables, Texas ranks 1 st out of 47 states for scores for students from similar families ( RAND Corporation, Assessing NAEP Achievement in Texas : Good News and Bad News ).

• Texas has the 5 th highest scores on NAEP for black students from similar families. Texas ranks 1 st out of 46 states for white students NAEP scores from similar families. Texas ranks 9 out of 46 states for Hispanic NAEP scores for students from similar families ( RAND Corporation, Assessing NAEP Achievement in Texas: Good News and Bad News ).

• A landmark 1996 study published in the Harvard Educational Review by Brian Powell and Lala Carr Steelman found that for every $1000 spent per student above the national average, SAT scores increased by 15 points. Texas ' spending per student, according to the National Center for Education Statistics, is more than $400 per student below the national average. Texas currently ranks 47 th nationally in average SAT scores.

• According to Hannaway, McKay, and Nakib (2000), Texas is considered one of four major reform states and the data reflect that Texas "disproportionately allocated resources to instruction in the period under study" (1991-1997) (p. 69). In addition, they found that in the major reform states that there was increased spending on school level administration and less on district administration compared to other states. " Kentucky appeared to invest more heavily in district administration while Texas invested less" (p. 69).

Administrative Ratios:

According to the National Center for Education Statistics (2000-2001):

• Texas employs 13,550 campus administrators representing only 2.5 % of overall staff and the overall average across the US was 2.5 %
• Texas employs 2,844 school district administrators representing 0.5% of overall staff the average for the US was 1%.
• Texas employs 25,379 administrative support staff which represents 4.7% of overall staff - US average was 6.6%, Florida was 10.1%, California was 9.5%

According to Steve Murdock, official state demographer, if present education performance trends continue, by 2040 Texas will have:

• A less skilled, less educated workforce earning lower wages
• An increased demand for workforce training
• A 40% increase in the poverty rate
• A 50% increase in people on welfare
• Declining average income for households
• 54.3% increase in prison population
• 36.8% increase of youth in Texas Youth Commission programs
• $6.3 billion increase in elementary-secondary costs
• $840 million increase in higher education costs

According to Steve Murdock, official state demographer, if education achievement gaps are closed, by 2040 Texas will have:

• An additional $143 billion in total household income annually
• An additional $100 billion in spending
• More citizens paying taxes to support public services
• Stronger economic competitiveness