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John Folks

Plaintiffs rest their case in school finance lawsuit

Phase one is over.

Hundreds of districts suing the state over its school finance system wrapped up their case Wednesday with testimony that largely blamed the Legislature for creating the current funding crisis that stripped away an unprecedented $5.4 billion from public schools.

After more than six weeks of testimony, the four plaintiff groups of school districts put on their final witness, who summarized the main arguments against the funding system and asserted school districts will never be able to properly educate all their students without major changes.

On the list of the biggest challenges for schools are a rapidly increasing number of lower-income students, a new testing program that is already seeing widespread failures, the inability of districts to raise enough local tax revenue, and a cycle of funding cuts that is thinning teacher ranks and increasing class sizes.

John Folks, former Superintendent of San Antonio’s Northside ISD and 2011 Superintendent of the Year, was the closing witness for the school districts.

Folks discussed the impact of education budget cuts on Northside ISD, where officials cut spending by $61 million before the Legislature took away another $85 million for the past two academic years.

The district has cut computer specialists, library assistants, gifted and talent teachers, counselors, coaches, special education teachers and classroom teachers. In all, 80 elementary teachers, 80 middle school teachers and 64 high school teachers were eliminated, Folks told Judge John Dietz.

“We went from 6,218 teachers in 2010-11 to 5,972 in 2011-12 at a time when our enrollment increased by 2,500 kids,” he said, adding that Northside had to increase elementary class sizes for the first time.

Folks also described the structural deficit the Legislature created while passing the 2006 school-finance bill. Legislators miscalculated when they reduced school property taxes and replaced the revenue with a new business tax, which fell “far short” of what’s needed to replace the property tax cut, he said. The problems were compounded when lawmakers used one-time federal stimulus money in 2009 to fill the revenue hole.

“It (stimulus funds) was one-time money. We urged them not to use that money to fill the hole because it was going away. They were told not to put that money into recurring expenditures, but that is exactly what the Legislature did,” he said.

Like most Texas school districts, Northside’s student population is undergoing a major transformation. In the past 12 years, the district’s percentage of low-income students has jumped to 54 percent from 41 percent.

“As you get more of those students in your district, you have to have the resources needed to help those students be successful. I hold them to the same standard as I do other students who are not low-income or limited-English proficient,” Folks said.

He said districts have limited options to deal with their recent funding reductions.

“There is no meaningful discretion anymore,” Folks said, explaining Northside ISD has not held a tax-rate election to raise its current maintenance and operation rate of $1.04 because it has been forced to have a bond election every three years to handle tremendous enrollment growth requiring new schools.

And now Phase Two begins.

Shelley Dahlberg, lead counsel for the state, said during opening statements in late October that the school districts must prove that they are spending their money efficiently on providing students foundational knowledge rather than on extras such as iPads, teacher aides and sports.

“They make big, big budget decisions within their discretion,” Dahlberg said.

The Legislature has delegated a substantial amount of local control to the school districts when it passes on public money to them, Dahlberg maintained, so it would not be fair to fault the state for the districts’ failure to use that money wisely.

Speaking directly to state District Judge John Dietz, Dahlberg added: “I would ask you to look at district choices.”


Of the districts’ arguments, the most sweeping — and difficult to prove — is that the state has failed to provide adequate funding to ensure that students can meet the increasingly rigorous academic standards mandated by the Legislature.

In the 2005 school finance ruling, the state Supreme Court seemed to put the Legislature on notice that it could be headed for trouble absent reforms. The court cited substantial evidence that “the public education system has reached the point where continued improvement will not be possible absent significant change, whether that change take the form of increased funding, improved efficiencies, or better methods of education.”

But the high court did not uphold the district court’s finding that that system violated the Texas Constitution.

“An impending constitutional violation is not an existing one, and it remains to be seen whether the system’s predicted drift toward constitutional inadequacy will be avoided by legislative reaction to widespread calls for changes,” the Supreme Court wrote.

The state has homed in on that court language to suggest that the districts are jumping the gun in bringing the case so early in the roll-out of the new, more rigorous testing and accountability system.

So the state’s argument is basically “it’s too early to say that there are any problems, and if there are we can fix them later”. That may be true, but it won’t be of much use to the students who will be ill served until “later” arrives, whenever that is. Still, the state doesn’t have to have a compelling case, because the burden of proof is on the plaintiffs. That’s always a high bar to clear. We’ll see how much of a dent the state can make in the districts’ arguments.

That next school finance lawsuit is coming

Look for it when school starts this fall.

Texas lawmakers who left town recently after cutting public education and doing little to fix school funding disparities have guaranteed another school finance lawsuit, according to educators and lawyers involved in the case.

They expect to file a lawsuit later in September.

“There’s going to be litigation. The timing of it is really nothing more than putting together the case. We’re still analyzing all the impact of the mess that they passed,” veteran school finance lawyer Randall “Buck” Wood said.

School superintendents across Texas are “very frustrated,” said John Folks, superintendent of San Antonio’s largest district — Northside ISD — and a respected veteran among the state’s school leaders. Folks is past president of the Texas Association of School Administrators.

Folks sees litigation as a certainty: “If the only option that school districts have to force the Legislature to do what is right — as far as public education is concerned — is a lawsuit, that’s pretty sad.”

Another topic we discussed on that Houston 8 episode I was on was school finance. The mantra Sen. Dan Patrick repeated was that school districts supported the legislation that allowed them to do things like reduce teacher salaries. He’s right about that, but I hope this makes it clear that school districts were not supportive of the rest of the things they did. Lord knows they have no reason to be.

The lowest 10 percent funded school districts in Texas average $5,246 per student from a tax rate averaging $1.15, according to the Equity Center, an Austin-based consortium of nearly 700 Texas school districts. In contrast, the top 10 percent funded Texas school districts average $7,742 per student from an average tax rate of $1 per $100 of property valuation. Simply put, the state’s lesser funded school districts get about $2,500 less per student than the wealthiest districts, despite being forced into levying much larger tax rates.

The system is irrational, unfair, unequal and inefficient, lawyers say.

And they complain that state leaders and legislators willfully ignored the problem.


Humble ISD is one of about 220 school districts that have hit the maximum school operations tax rate of $1.17 (per $100 of property valuation) and cannot increase revenue.

The district’s administrators have made cuts every year for most of the past decade and now face “even more devastating cuts,” spokeswoman Karen Collier said: “Our backs are truly against the wall.”

The district must accommodate an additional 1,000 children every year.

School districts no longer reap the benefit of property value increases. Increased local property values results in school districts getting less state school funds.

“There’s no way to win. It’s a losing battle,” Collier said. “We’ll go to court.”

Everybody agrees that the Lege did not provide funding to accommodate the continued growth in public school enrollments. We all know that the Lege didn’t come close to addressing the structural deficit caused by the 2006 property tax cut, which will be a big driver of the next deficit. This lawsuit may eventually force a change in how the Legislature addresses school funding, but then it was the last lawsuit that led to the 2006 changes, and we see where that has gotten us. The only way this will truly change is with a different mindset in the Legislature, and that’s going to require throwing a bunch of the current members out. If you want something different, you cannot vote for those who are part of the problem.

Superintendents speak out against school funding cuts

More of this, please.

Speaking at a press conference during the Texas Association of School Administrators’ Midwinter Conference, superintendents and trustees urged the Legislature to use the Rainy Day Fund and search for new revenue through fees instead of the proposed $10 billion in cuts. They also asked the Legislature to fix the current school finance system, which Northside superintendent John Folks called one of the “most inequitable and inadequate” funding mechanisms in the country.

In remarks that could portend a new school finance lawsuit, school leaders reminded legislators that the Texas constitution mandates that the state provide a “free and adequate” education to all children, saying that “there’s no clause that says ‘if funds are available.'”

Folks, who serves as superintendent of the San Antonio district and president of TASA, said it was “totally irresponsible” for lawmakers to ask districts to make cuts when the legislature had created a structural deficit in 2006 when it compressed property tax rates, limiting the amount of money districts could raise locally. As his district faces what could be a 28.5 percent reduction in funding, he said there’s “no question” there will be layoffs — as many as 565 positions.

There’s that structural deficit again. How much are schools going to be asked to cut in 2013 when we have to deal with this then? Here’s what the budget would mean to Folks’ district:

His school district has cut or not filled 192 staff positions and is in the process of making 373 additional cuts. But that won’t be nearly enough to meet the state’s budget cuts.

It would take another 400 job cuts for his district to reach a 10 percent budget cut.

The state’s budget proposals would demand even more slashing at the local level, Folk said – about $97 million per year for Northside.

“I don’t know how we could operate. When you take almost $200 million out of an operating budget of $680 million, that’s a 28.5 percent cut,” Folks said.


“It’s that extra help that have allowed school districts all across Texas to raise student achievement and narrowing the gap. That’s going away,” Folks said. That’s one of my biggest fears. It’s going to hurt student achievement as we eliminate jobs, as we raise class size.”

If the proposed budget is not significantly changed, Northside has to cut nearly $100 million a year.

“At $50,000 a pop, that’s 2,000 teachers. We have 7,500 teachers at Northside. We can’t operate,” Folks said.

There’s the achievement question again. What are we going to do when test scores go down and the dropout rate increases? I don’t see the Republican leadership expressing any concern about that. Are they oblivious to it, or are they just hoping really hard that it won’t be quite that bad? The latter is my guess. It’s going to take another lawsuit to force the issue, but who knows how long we’ll refuse to do anything about it and how much damage that will cause until then.