Analysis of the Effects of Target Revenue on Two Texas ISDs

When taking an initial look at the two districts, I immediately noticed that there was a similarity in size.  Unfortunately, that is where the similarities end.  Looking at the chart below, one is able to determine that there is a distinct difference between the two student populations.

	District 1	District 2
Total Students	3,903	3,890
% Econ Disadvantaged	93.3	20.7
% LEP	48	2
% SPED	9	2
% CATE	24	14

                                                                                                                                           

Upon further review, it was noticed that District 1, by all appearances, has a student population that will be much more resource consumptive to educate. 

            Under the current funding formula, each district in Texas receives Maintenance and Operations (M & O) funds based upon a Target Revenue.  Target Revenue consists of the product of a district’s WADA and its Revenue per WADA.  Target Revenue is the specific amount of funding that the State guarantees to a school district in exchange for the mandatory reduction of the district's M&O tax rate per HB1 (3^rd Special Legislative Session – 2006). The revenue target amount is different for each school district and is based on the state and local M & O revenue a district would have earned had it not lowered its tax rate.

            According to the information above, the Target Revenues for our two districts are:

	WADA	Revenues per WADA	Target Revenue
District 1	5,555.815	$ 5,044	$ 28,023,530.86
District 2	4,794.076	$ 7,206	$ 34,546,111.66

            As you can see, despite the fact that District 1 has a much more difficult student population to educate, it receives over $ 6 Million less than District 2.  The disparity lies in the basis of Revenue per WADA.  The Revenue per WADA is based upon the highest of three calculations.  The calculations are based upon tax receipts (or estimated) for the years 2005-2006 or 2006-2007 at the rates in effect at that time.  In other words, property-rich districts will have higher Revenue per WADA than property-poor districts.

            Under the current system, it does not matter where the money originates.  The majority of funds may be distributed to a district by the State or the majority may come from local taxpayers.  The point is that each district receives its mix of revenues based upon property wealth.  Poor districts receive less money.  That makes the current system inherently inequitable.

            It is for that (and other) reasons that the current litigation is ongoing in Travis County.  Poor districts that have a student population that requires more intensive resources should not have to do business with less money than more fortunate districts.  School funding should be based upon the costs related to educating children, not how much the land in a district is worth.