Constitution of the State of Texas 1876

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(No Transcript)
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Basis of Public Education

• Constitution of the State of Texas (1876)

Article VII Education Public Free
Schools Section 1 Support and maintenance of a
system of public free schools

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Current Law

• 4.002 Exemplary performance in reading, writing,
  mathematics, science, and social studies
• 4.003 Access to programs and services
  appropriate to individual needs
• 28.002 Foundation and enrichment curriculum
  offered by each district
• 42.002 Basic instructional program and
  facilities suitable to students educational needs

Source Moak, Casey Associates, LLP
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Who are the Children of Texas?
20022003 19971998 Enrollment
4,239,911 3,891,877 Economically
51.9 48.5

Disadvantaged Special Education 11.6
12.0 LEP
14.9 13.4
Source TEA AEIS Profiles
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Who are the Children of Texas?

20022003 19971998 Hispanic 42.7 37.9 Africa
n American 14.3 14.4 White
39.8 45.0 Asian/Pacific Islander 2.9 2.4 Nati
ve American .3 .3
Source TEA AEIS PROFILES

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Changing Needs

• State Patterns
• Growth 70,000 new students each year
• Inflation 2.5 percent per year
• Equivalent to about 1.2 billion per year

Source Moak, Casey Associates, LLP
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Changing Needs

• Higher growth rates in critical areas
• Economically Disadvantaged
• Limited English Proficient

Source Moak, Casey Associates, LLP
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Testing Expectations Have Changed

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More Standards/Requirements

• NCLB Adequate Yearly Progress
• NCLB Highly Qualified Personnel
• Recommended High School Program
• State Accountability Program
• Stronger Curriculum Standards

Source Moak, Casey Associates, LLP
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School Finance Components

• Property Taxes
• Levied by local school districts with limits set
  by state statues
• Valuations set by county appraisal districts

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School Finance Components

• State Funding
• Based upon local property wealth of local
  districts
• Number of students and their educational needs
• Assistance for debt and facilities, if eligible
• Hold harmless funds and transportation aid
• Adjustments (Cost of Education Index, etc.)

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State Share of Texas Public School State and
Local Funding, 19472003
1947 1957 1967 1977 1987 1997 2002
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Property Wealth per Student
Wealth per student is based on WADA.
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Calculation of Per Penny of Tax Effort
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What Happens When the Tax Roll Rises?
When local values rise, state funding Falls
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How State Equalization Funding Works
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Summary of 20032004 Maintenance and Operating
Tax Rates
Total Districts 1,031 Source Moak, Casey
Associates, LLP
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HISD Demographics

20032004
19971998 Enrollment 211,116 210,988 Projected
ADA 190,944 190,568 Estimated Tax
Roll 70.9B 46.9B MO Tax Rate 1.45 1.29 Debt
Tax Rate 0.13 0.08
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Our Children at HISD
20032004
19971998 Economically

Disadvantaged 81.6 73.1 LEP 28.9 27.6 Bilingua
l/ESL 26.9 23.6 Special Education 10.1 10.3 Gi
fted and Talented 9.8 8.7
Source HISD Facts and Figures and TEA AEIS
Reports
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Our Children at HISD
20032004
19971998 Hispanic 58.1 52.4 African
American 29.7 34.0 White 9.1 10.7 Asian/Pacifi
c Islander 3.0 2.8 Native American .1 .1
Source HISD Facts and Figures and TEA AEIS
Reports

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Revenues Trends

• Local Revenues
• Property value growth, while still increasing in
  total dollars, it is decreasing in percentage
  from prior years.
• Interest rates continue to be flat.
• State Revenues
• State Foundation revenue continues to decline.

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Local Tax Roll
Total Assessed Value 19992005
BILLIONS
Note Represents total assessed value as of each
fiscal year end.
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Taxable Value Changes 20012003
Source HISD Internal Audit Department
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State Revenues (Foundation School Program and
110 per Weighted Average Daily Attendance)
Note 2000-2003 are Actual Revenues 2004-2005
are Projected Revenues
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Why is State Aid Decreasing?

• As local values rise, state aid decreases.
• The state Comptroller uses the previous years
  roll to determine wealth valuation used by the
  state in calculating aid.

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Why is State Aid Decreasing?

• HISD has had double-digit tax roll increases in
  the past and now the growth is projected to be
  2.83 percent.
• The tax roll has to grow enough to offset the
  decrease in state aid in order for the district
  to remain at least even.

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Local Taxes vs. State Funding
Note 2000-2003 Are Actual Revenues 2004-2005
are Projected Revenues
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Interest Income
MILLIONS
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Sources of RevenueGeneral Fund
20042005 Projected Sources of
Revenue TOTAL 1.293 Billion
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Appropriations History
The General Fund budgeted appropriations have
been decreased in the past two years over
85,000,000.
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Why Budgets Increase

• Salary Increases
• Health Insurance
• Electricity and Other Utilities
• TRS Payroll Tax
• Medicare Taxes
• Operational Costs for New Schools

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Budget Reductions

• 39,959,833 for 20022003
• Reduced Department Budgets
• Reduced District Office Budgets
• Reduction from Voluntary Retirement Program
• Districtwide Stipend Reductions

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Budget Reductions

• 117,321,741 for 20032004
• Cut 367 central-office positions
• Reduced district office and department budgets
• Reconfigured bus routes and reduced
  Transportation Department budget
• Reduced Magnet allocations
• Reduced consulting and out-of-district travel
  budgets

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Schedule of Administrative Cost Ratios
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Budget Planning20042005 Financial Status

• 20032004 General 1,325,000,000 Fund Budget
• 20042005 Revenues 1,293,067,808

Revenues are not sufficient to appropriate
funding at the current 20032004 level.
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20042005 Budget Issues

• Increases
• Utilities
• Health insurance
• Tax-increment zone contributions
• Crossing guard program
• Decreases
• 125 positions being eliminated from central
  office
• District office and departmental reductions
• Consulting and out-of-district travel reductions

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Cost Drivers in Urban Districts

• Salaries
• Health insurance
• Security
• Transportation
• Special-needs children
• Prekindergarten programs

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Teacher Salary Comparisons
New teachers receive a 3,000 sign-on
bonus. Source 2002-2003 TASB Salary Survey
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Cost of Special Programs
Source Summary of Finances 2002-2003, HISD
Financial Records 2002-2003
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Cost of Security
64.2 increase in expenditures
Source HISD CAFR Report
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Cost of Education Index

• HISD Cost of Education Index 1.17
• Basic Allotment 2,537
• HISD Adjusted Basic Allotment 2,843
• Estimated Funds Generated by
• Cost of Education Index Factor
• 53 million annually

Source HISD Summary of Finances
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SchoolPerspective
Town Hall Meeting on Public School Finance
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The Future

• Adequate funding for special-needs students
• Adequate funding for new requirements
• Accurately reflect geographic cost differences
  through an updated cost-of-education index
• Ensure the future by safeguarding revenue sources

(continued)
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The Future

• Create a balanced solution
• Adequate funding for public education
• Reduce property tax burden on citizens

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Our children areLEARNING!
Every student. Every day. One at a time.