Welcome!

Membership Meeting

September 27, 2014

Meeting Overview

I. Welcome and Introductions

II.School Finance Litigation Update

III. Legislative Update

IV. Election of Officers

V. Adjourn

© 2014 Haynes and Boone, LLP 3© 2014 Haynes and Boone, LLP

Update on Texas School Finance Trial

Frisco I.S.D. School BoardMarch 4, 2013

Update on Texas

School Finance LitigationTASA ConventionSeptember 27, 2014

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The 2012-13 School Finance Litigation: Six Consolidated Cases

It would be arbitrary, for example, for the Legislature to define the goals for accomplishing the constitutionally required general diffusion of knowledge, and then to provide insufficient means for achieving those goals.

West Orange-Cove v. Neeley, 176 S. W.3d 746,785 (Tex. 2005)

West Orange-Cove v. Neeley

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The Perfect Storm

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Figure 46. 1991-92 through 2011-12 Adjusted Per Student Operating ExpendituresSource: MCA Analysis of PEIMS Actual Financial Data, Adjusted by State and Local Government Price Deflator

Source: Moak, Casey & Associates October 2012

7

Revenue per Student in 2004 Dollars

Ex. 6618

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The 2012-13 School Finance Litigation: Six Consolidated Cases

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RISD Inflation Adjusted Revenues per WADA:

Operating Fund (Net of Recapture)

RISD Inflation Adjusted Revenues per WADA: Operating Fund (Net of Recapture)

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The 2012-13 School Finance Litigation: Six Consolidated CasesDifference Between Texas Per-Pupil Spending and National Average

11

$1.50$1.25$1.00$.75$.50$.25

2004

12

$1.50$1.25$1.00$.75$.50$.25

2006 Restructuring(post WOC II)

13

$1.00$.75$.50$.25 $1.50$1.25$1.00$.75$.50$.25

2006 Restructuring(post WOC II)

14

Enrichment

$1.00$.75$.50$.25

2006 Restructuring(post WOC II)

$1.04(TRE)

$1.17

15

$1.00$.75$.50$.25

Enrichment

$1.17

GDKHB3CCRS (curriculum changes)STAAR/EOCIncrease in ELL/Econ. Disadv.

$1.04(TRE)

Changes since 20062006 Restructuring(post WOC II)

16

Enrichment

$1.00$.75$.50$.25

$1.17

GDKHB3CCRS (curriculum changes)STAAR/EOCIncrease in ELL/Econ. Disadv.

$1.04(TRE)

What should have happened

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Arguments regarding financial efficiency

The 2012-13 School Finance Litigation: Six Consolidated Cases

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The 2012-13 School Finance Litigation: Six Consolidated Cases

1. Districts with higher Tier 1 per-WADA funding are overwhelmingly districts in smaller communities for whom funding comparisons are not always meaningful.

Arguments regarding financial efficiency

19

Presentation of Catherine Clark of TASB

Ex. 6622

= $228$5,801$5,573

176,531 / 6,078,575 = 2.9%

6,078,575Total WADA

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The 2012-13 School Finance Litigation: Six Consolidated Cases

2. Chapter 41 districts have already borne the brunt of funding cuts over the last several years and still have not been restored to pre-cut levels.

Arguments regarding financial efficiency

21Ex. 6622

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The 2012-13 School Finance Litigation: Six Consolidated Cases

3. In an environment of rising costs and standards, no district should now be brought below its hold-harmless level established years ago.

Arguments regarding financial efficiency

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The 2012-13 School Finance Litigation: Six Consolidated Cases

4. Taking funds from a small group of districts (or increasing recapture on these districts) would help no one. The emphasis should be on bringing up all school districts in Texas.

Arguments regarding financial efficiency

Texas State Supreme Court - 2005

Scott A. BristerDon R. WillettHarriet O’NeillDavid M. MedinaDale Wainwright

Wallace B. JeffersonPhil JohnsonPaul W. GreenNathan L. Hecht

Texas State Supreme Court - 2005

Scott A. BristerDon R. WillettHarriet O’NeillDavid M. MedinaDale Wainwright

Wallace B. JeffersonPhil JohnsonPaul W. GreenNathan L. Hecht

Texas State Supreme Court - 2011

Scott A. BristerDon R. WillettHarriet O’NeillDavid M. MedinaDale Wainwright

Wallace B. JeffersonPhil JohnsonPaul W. GreenNathan L. Hecht

Eva GuzmanDebra H. Lehrmann

Texas State Supreme Court - 2014

Don R. WillettDavid M. MedinaDale Wainwright

Wallace B. JeffersonPhil JohnsonPaul W. GreenNathan L. Hecht

Eva GuzmanDebra H. LehrmannJeffrey S. Boyd John Devine

Jeffrey V. Brown

© 2013 Haynes and Boone, LLP 28© 2013 Haynes and Boone, LLP

Calhoun County ISD, et al. PlaintiffsJOHN TURNER

Partner

Haynes and Boone, LLP

john.turner@haynesboone.com

214.651.5671

Thank You!

Legislative UpdateChristy Rome

Executive Director

All new state leaders Governor Lieutenant Governor Comptroller Attorney General

New Committee Chairs Senate Education Senate Finance House Appropriations

84th Legislative Session

Speaker Straus expected to be re-elected

Currently, 63% of members are certain to return (51 Republicans and 43 Democrats)

22 are not returning to their seats (due to retirements or primary losses)

34 face general election opponents

Texas House of Representatives

New Lieutenant Governor (which also means new committee chairmanship assignments)

17 of 31 senators are certain to return to their seats (with Hegar and Van de Putte maintaining their seats and returning if their bids for others offices fail)

Could be as many as 8 new senators (meaning that one-third of the Texas Senate will not have served a full four-year term in the Senate in 2015)

Texas Senate

Analysis from Mark P. Jones, chairman of Rice University's political science department

14 Members of the Texas Senate were serving as legislators during the last special session on school finance (12 as senators and 2 as house members)

51 members of the Texas House were serving at the time.

The Learning Curve

Percent with Majority Ch. 41 Legislative District

Texas House Texas Senate

62%

38%

<50% Ch. 41>50% Ch. 41

61%

39%

<50% Ch. 41>50% Ch. 41

Budget surplus (projected $2.5 - $5 billion)

But a Legislature unwilling to spend

$1 billion shortfall from Medicare needs

Transportation and water needs

Calls for tax relief

Property tax appraisals

Issues at play

Pre-Kindergarten Debt Limitations & TransparencyTRS contributionVirtual SchoolsTeacher QualityAccountabilityAchievement School DistrictsPrivate School Vouchers

Education Issues at Play in 2015

Step in the process Possible timeline

Judge Dietz files final judgment & findings of fact

August 28, 2014

Appeal filed (30 days) September 26, 2014

Supreme Court takes case October – December 2014

Briefings scheduled Spring 2015

Arguments before Supreme Court May 2015?

Supreme Court issues final ruling September/October 2015

Legislative responseSpring 2016

(maybe 2017)

Timing of the School Finance Case

Since it is very unlikely that a school finance bill will pass in 2015, it is even more important to monitor what can be accomplished through the General Appropriations Act. Basic Allotment: statutory floor of $4,765, but may be higher by

appropriation ($5,040 in FY 2015)

Tier 1 Equalized Wealth Level (EWL): statutorily linked to Basic Allotment, so it increases when the BA does ($504,000 in FY 2015)

ASATR Reduction Factor: percentage set in appropriations (0.9263 in FY 2015)

Golden Penny Yield: increases with Austin ISD wealth per WADA

Tax Rate Compression Percentage: Established by appropriation

Appropriations Levers

FY '07 FY '08 FY '09 FY '10 FY '11 FY '12 FY '13 FY '14 FY '15 $-

$1.0

$2.0

$3.0

$4.0

$5.0

$6.0

$4.3

$5.6 $5.3

$2.1 $2.5

$2.1

$0.6 $0.4 $0.3

(in billions)

ASATR Over Time

ASATR Reduction Factor, leading up to current statutory expiration in 2017

Increased property values

Increased Basic Allotment and Equalized Wealth Level

The Decline of ASATR

Secure suitable funding for public schools

Ensure funding for public schools remains with public schools

Provide local control for locally collected revenue

Objectives for the 2015 Legislative Session

Secure suitable funding for public schools

Guarantee per-student funding for each school district to at least 2010 levels.

Reduce Robin Hood’s impact by increasing the State’s investment in education thereby keeping local dollars in local communities; create more “golden pennies” or raise the Basic Allotment and therefore the Equalized Wealth Level.

Protect the promise of Additional State Aid for Tax Reduction (ASATR) until another funding source is put in place to ensure that no school receives less revenue.

Provide resources necessary to achieve reasonable state standards and expectations for college and career readiness.

Continue state assistance for new Teacher Retirement System (TRS) required contributions until such a time when adequate funding is provided by the school finance formulas.

Secure suitable funding for public schools

Oppose vouchers or any measure that would divert money away from public schools.

Support measures that empower locally-elected school boards with authority over local tax rates and revenue for the purpose of enrichment.

Increase flexibility for innovation and choices within public school districts.

Ensure the funding for public schools remains with public schools

Provide local control for locally collected revenue

How do we get there?

The Abraham Lincoln Rule:

“In the long run, legislative battles are not won in the halls of the legislature but in communities across the state.”

Don’t suffer in silence

Provide personal experiences Personal experience is the single most powerful factor

that will influence how a legislator votes.

Tell your story & make it their story

Effective Advocacy

Credibility requires time – invest it nowBegin or strengthen personal

relationships with legislators and staff Invite legislators and staff to your district Schedule meetings at their district office Make personal phone call or write a hand-written note

congratulating elected officials on their election/re-election after November 4 and offer your assistance during legislative session

Between now and January

Plan your visit to the Capitol to meet with legislators

Consider coordinating with other districts in your area

Let us help you!

January 13 – March/early April

The Applause Meter The Intensity Meter

Two Meters that Matter to Legislators

www.crcstx.org

www.crcstx.org

November 4, 2014 - Election Day

November 10, 2014 - Bill filing begins

January 13, 2015 – 84th Session begins

June 1, 2015 – Sine Die

84th Legislature - Dates to Remember

Election of OfficersMike Motheral

Executive Committee Member

President: Kevin Brown, Alamo Heights ISD

Vice President: Karen Rue, Northwest ISD

Secretary/Treasurer: Scott Marshall, Sundown ISD

Proposed Officer Slate

Thank you for attending!