The way the state distributes money to school districts, and how much, will be center stage when a trial begins this fall involving more than half of the state’s districts serving the majority of its students, along with Texas charter schools and a group of parents and business leaders asking for a more efficient system. Because of the complexity of school finance, it’s tempting to turn to per-student spending to understand how well — or how poorly — a district is spending its money. But the circumstances of the two districts above illustrate the potential perils of that approach.
“A straight-up comparison of the dollars spent per student in District A and dollars spent per student in District B can be grossly misleading,” said Lori Taylor, a government professor and education researcher at Texas A&M University who has helped the state analyze school district efficiency. Such a comparison, she said, could give people the idea that their district is “wasting their money when it is actually enormously frugal but facing enormous challenges.”
After the state changed the way it finances schools in 2006, most Texas districts do not receive money based on what it costs to educate a student there. Instead, the state bases what districts receive largely on how much they raised through property taxes that year. Intended to help districts transition after the Legislature reduced property taxes, the “target revenue” system has become permanent, though schools are also financed based on a formula that takes into account factors like regional cost-of-living expenses and a district’s number of bilingual, low-income and special-education students. But because of the same political pressures that have already landed school finance in the courts several times since the 1970s — even before target revenue came around — the formula is based on estimates that in many cases have not been updated in almost three decades.
Last year, the state comptroller’s office released a study analyzing districts’ spending compared with their academic performance, attempting to control for factors like demographics, size and regional costs. Although some education finance experts have questioned whether it adequately did that, it does rank Canyon as more efficient than Sheldon — but neither of them are the outliers they would be based on their per-student spending.
Cypress-Fairbanks, a district in the Houston suburbs that the study regarded as one of the state’s most efficient, achieved that distinction not by design but because of a confluence of circumstances, said Stuart Snow, the district’s associate superintendent of business and financial services.
The district — the third-largest in the state with nearly 104,000 — like Canyon, is among those that receive the least in target revenue financing. That happened because of various factors, said Snow, including the rapid influx of students which he said outpaced property tax values when target revenue levels were set in 2006.
Since then, the district has shaved almost $107 million from its budget to make ends meet, largely through increasing class sizes because it could not hire the staff to keep up with the yearly increase in students. It also saved about $20 million in last year’s budget by reducing the district’s share of employees’ health benefit premiums by about 25 percent.
“It’s been hard, and it’s been a big sacrifice,” Snow said. “It’s hard to measure the impact of that on student learning. Our student performance hasn’t suffered yet, but when you get larger classrooms, at some point in time you expect to see student performance to decline.”
Cy-Fair always comes up in these discussions. It’s one of those places that people have moved to, and still move to, for the schools. That requires them to have schools worth moving for, of course, and the state has been doing its best in recent years to make that a lot harder for them. I keep thinking that sooner or later, the parents will demand better from the Lege. It can’t happen soon enough, that’s for sure. Anyway, file this as another story about the complexities of school finance and the difficulty of finding a solution that works for all, or even most, of the thousands of school districts in Texas.