Good public school funding is an essential element to the quality of a school’s offerings. Funding usually directly affects a number of school aspects such as the quality of facilities, student to teacher ratio, richness of curricula, extracurricular programs, and access to supplies and technology. For an individual school in Houston ISD, annual budgeting is determined at three main levels: state, local district, and school.
Local property taxes are the heart of the Texas educational system. In 2011, the tax rate for HISD for Harris County residents was 1.1567% of a home’s appraised value. Next, state budgeting determines the overall bucket of money that Houston ISD will have including whether or not some of the local property taxes must be remitted to poorer districts (HISD is a net beneficiary of state redistribution). Local district budgeting determines how much money HISD decides to allocate to each of its 279 schools. Finally, individual school management decides how to use their received funds. Outside of annual budgeting, bond issues serve as the primary mechanism to fund major capital improvements such as renovating or building new school facilities. Additionally, parents exercise additional influence through the funding provided by independent “Parent/ Teacher Organizations” (PTO).
The current funding process at the state level is extremely convoluted and is the rather messy result of merging together three principle mandates on school finance: per pupil need, historical revenue, and equality across districts. Prior to 2006, school districts received their allocations using a per pupil formula system that calculated how much districts received based on the type and number of students in their systems; types of students such as indigent, handicapped, and gifted and talented received more funding versus average students.
Acting on a 2002 Texas Supreme Court ruling on high, local property taxes, in 2006, the Texas Legislature adopted the “Target Revenue” system, which required local districts to lower their property taxes. However, the state assuaged districts that they would not lose money by guaranteeing that the district would receive the same or more money it had received in the ‘05-‘06 or ‘06-‘07 school years, whichever was greater.
Finally, since 1993, Texas has equalized funding across districts essentially redistributing wealth from property rich districts to property poor districts. For the 2012-2013 financial year, the total estimated funds available to Texas schools is $46.3 billion of which 46% comes from local property taxes, 43% from the Texas state treasury, and 11% from federal funds.
HISD Local District Allocation
At the local district level, HISD employs a “Weighted Pupil Formula” to allocate approximately 90% of an individual school’s budget. The basic formula is:
+ Weighted Attendance
+ Special Population Units
= Total Refined Units
x Per Pupil Allocation
= Basic Allocation
+ Capital Allocation
+ Small School Subsidy
= Total Resource Allocation
Weighted enrollment sums up the number of students in two groups: early education through pre-kindergarten (EE-PK) and kindergarten through 12th grade (K-12) and multiplies that sum by the average daily attendance.
“Special Population Units” receive additional per pupil funding on top of the weighted enrollment and are as follows:
All schools receive a “capital allocation” that in the recommended 2012-2013 school year amounted to $10 per pupil. Finally, schools designated as “small schools” receive an additional subsidy to defray the higher marginal cost of running a small operation. The remaining 10% of a school’s budget is somewhat more discretionary and includes such items as school counselors, magnet program bonuses, special education staff, utilities, custodian, and facilities additions.
The approved 2013-2014 HISD budget totals approximately $1.62 billion, up $120 million from the prior year. Approximately 73% of the revenue for this budget comes from local property taxes, 23% from state funds, and less than half a percent from federal funding. Highlights from the year over year increase include a 2% teacher pay increase, $16 million to increase support for struggling children at struggling schools, and $14 million for local principals to use at their discretion to improve their school’s STAAR test results.
Individual School Funding
HISD is one of few school districts nationwide that practices decentralized budgeting and staffing. This decentralized system means that an individual school’s principal has broad discretionary authority to allocate their school’s funds. For example, a principal may opt to have more school counselors at the expense of larger class sizes or new computers at the expense of tutors. Ideally, this decentralized system should allow principals to better meet the need of their school’s students.
Bond Initiatives and Major Capital Improvements
Over the last decade, major improvements to HSID school facilities, such as renovation and the building of new schools, have largely been funded by two bond programs totaling more than $1.6 billion. On November 6, 2012, HISD voters approved a third major bond for $1.89 billion to replace and repair 40 district schools. As such, HISD has raised more than $3.5 billion in just over a decade to renovate, rebuild, or relocate more than half of HISD’s 279 schools. The 2012 initiative will be funded through a 7% HISD property tax increase phased in through 2017 and is estimated to cost the average home owner $100 more per year in 2017 versus 2012.
HISD has already begun the design process for schools funded by the 2012 bond; it anticipates the majority of construction to start in 2014 extending as far out as 2017. Profiled schools benefiting from the bond’s passage include:
District-wide projects include $100 million to upgrade the district’s aging technology equipment, improve regional athletic field houses and related facilities, renovate middle school restrooms, and improve safety and security through the district.
Parents Make the Difference
Although the Texas state legislature voted in May of 2013 to restore $3.4 of $4 billion in education cuts from the 2011-2013 budget, public school funding remains tight. However, this pain is generally being felt across all Texas schools. For example, per pupil funding at Lamar High School for 2011-2012 was approximately $4700 versus $4900 for Memorial High School (Spring Branch ISD) and $5000 for West Lake High School (Austin, Eanes ISD).
Through the non-profit corporations of a school’s Parent Teacher Association/ Organization, parents have been able to pick up some of the slack for their most cherished faculty members and programs. The funds raised by these non-profit organizations are not reported in HSID’s annual budget and are usually utilized in cooperation with the PTO leadership and a school’s management team. However, because the PTO is a separate entity from the school, parents have the ability to target funds at specific programs that they strongly support. Some examples of the influence of PTOs include:
Parents looking to strengthen their voice on a school’s budget should strongly consider joining their school’s associated PTO.
Article last updated on March 11, 2014.
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