School Finance
School finance system still not fixed
By By John M. Folks, Ed.D Northside Superintendent
May 22, 2008, 08:35

Over the past several months, I’ve been educating as many people as possible about what I believe is the single most pressing issue facing public education today: school finance. In my discussions with community members, I’ve discovered that many are under the mistaken belief that school districts are getting more money under the new school finance system that was set in place in 2006.

In fact, it’s exactly the opposite.

Under the current finance system, every school district is funded per student based on what’s called “target revenue.” Target revenue is the amount of local and state funding a district received per student for either the 2005-06 or 2006-07 school year, whichever amount is greater. For Northside, it’s the 2006-07 figure, which is $5,058 per student.

The bottom line is NISD is receiving the same amount of money per student this year as it did last year. No provisions have been made for inflation, salary increases, or the slew of unfunded mandates passed by the Legislature last year.

Every school district has a different target revenue. The formula that is used to figure out a district’s target revenue is very complex and confusing, and there is no logic applied to how a district’s target revenue is set. In looking at large districts across the state, Northside fared much better than some, but there are still many districts that have a target revenue figure higher than ours. To put this in perspective, if NISD had neighboring North East ISD’s target revenue, we would collect $21.2 million in additional funding annually. Or, if we had Austin’s target revenue, we’d be getting more than $67 million in additional funding. My point is that the system not only is unfair, but it’s inequitable as well. Why are some school districts expected to make do with less?

A better question may be why are school districts expected to make do with the same revenue level year after year, while the state continues to gain revenue? Many of you may be wondering about all the new businesses and homes that are being built and the additional property tax revenue that they generate. That money does go to public schools, but it just means districts gets less money from the state. In other words, it’s a wash.

In fact, because of growth in property tax revenues in Northside, we estimate that in 2008-09, Northside will get $10 million less from the state even though we will grow by 3,000 students. Plain and simple, it means more money for the state but not for school districts.

The only way for a school district to increase its revenue is to increase the tax rate. A Board of Trustees can only increase the tax rate by 4 cents per $100 of property value; additional tax rate increases must be taken to the voters for approval. Currently, Northside is the only school district in San Antonio that has not accessed any of the additional four pennies.

That’s because several years ago, the NISD leadership made several difficult decisions in order to keep our finances sound. In 2003-04 and 2004-05, salaries were frozen for one year and block scheduling was ended in order to cut more than $40 million from the budget. Since then, we’ve enjoyed a stable budget and have been able to give good salary increases to staff members. Unfortunately, under the current school finance system, the good times soon will be over.

In a nutshell, the effort to overhaul the way public education is funded was about property tax relief; it was not about reforming school finance. In fact, the current finance system we have may be more inequitable that the previous system, which was ruled unconstitutional by the Texas Supreme Court.

Currently, a Select Committee on Higher and Public Education Finance established by the Legislature is examining the way the state funds education and is expected to make recommendations to lawmakers. I recently submitted testimony, and I encourage community members to share thoughts or concerns with your state elected representatives as well.