“Adequate” Funding – The amount of money schools would need to meet minimum, or basic, “adequate” state education requirements, with “adequate” being defined by the state or, as in
Basic Allotment – The specific amount of money a
Chapter 41 District – A school district with property wealth that is greater than $476,500 per student (WADA) is considered to be a property wealthy school district. These school districts are subject to the recapture provisions in the
Cost of Education Index (CEI) – A way to adjust for the fact that the cost of doing business in some cities is higher than in others. The index takes into account five types of costs that are out of a school district’s control: (a) the average beginning salary of teachers in nearby school districts, (b) the percent of economically-disadvantaged students in the school district, (c) school district size (in terms of ADA), (d) location in a rural county (with a population less than 40,000), and (e) whether the school district is classified as an "independent town" or "rural." The CEI is based on a 1991 analysis of differences in payroll costs among school districts. It is applied as an adjustment to a school district’s Basic Allotment.
County Tax Appraisal Districts – The political subdivision in each county that is responsible for appraising property for ad valorem tax purposes and whose property value estimates are used by counties and the state to levy local taxes.
District Property Wealth – The total amount of (real) taxable property located within a school district’s legal boundaries, as determined by state estimates, divided by the total number of weighted students (or in some cases average daily attendance) in the school district.
Edgewood Cases – A series of four lawsuits that challenged the inequalities in the Texas school finance system, known as Edgewood I (1989), Edgewood II (1991), Edgewood III (1992) and Edgewood IV (1995).
Equality – The availability of equal dollars per student.
Equalized Wealth Level (EWL) – When a school district has more property wealth per Weighted Average Daily Attendance (WADA) than the equalized wealth level, it is subject to recapture provisions of Chapter 41 of the Texas Education Code. In 2009, there were actually two equalized wealth levels $476,500 per WADA in Tier I of the funding systems and $319,500 per WADA at Tier IIb.
Equitable Resources – Goal 5 of the Six Goals of Educational Equity – Funding, staffing and other resources for equity-based excellence that are manifested in the existence of equitably assigned qualified staff, appropriate facilities, other environmental learning spaces, instructional hardware and software, instructional materials and equipment, and all other instructional supports, are distributed in an equitable and fair manner such that the notion that all diverse learners must achieve high academic standards and other school outcomes become possible.
Equity – Equity is defined as “equal treatment of equals” or ensuring that schools have equitable amounts of money to educate students, including taking into account that students with different needs require differing levels of funding to address those needs.
Faux Chapter 41 School Districts – Among
school districts that are subject to recapture, there is a subset that get all their recapture monies returned to them due to hold harmless or other adjustments to funding formulae. Since these school districts do not actually contribute to the recapture money used by the state to equalize school funding, they are not truly “Chapter 41” school districts but only appear to be so because of their high property wealth level. A few Faux 41 school districts “complain” about sending money to the state (and blame their tax rate levels on recapture) when they actually know they wind up getting it all back – a fact that many of their residents are not aware of. (A list of Faux Chapter 41 school districts is available online at: http://www.idra.org/education_policy/fair-funding-common-good/)
General Revenue – Monies that are collected by the state of
Guaranteed Yield – The amount that the state “guarantees” is provided for school districts for every penny of tax effort that they collect at the local school district level. Used by the state of
to “equalize” the amount of money raised by school districts that have different levels of property wealth. For example if the Guaranteed Yield is $25 per penny of tax effort, all school districts are guaranteed that amount per penny of local tax effort. If school district A raises only $5, the state provides the additional $20 needed to reach the guarantee; if school district B raises $15, the state provides an additional $10 to that school district. This is also referred to as equalizing returns for local tax effort, or equalized yield.
Hold Harmless – Provisions that promise school districts that they will receive at least as much state funding as they got before legislative changes in school funding formulae would have reduced their funding.
Instructional Facilities Allotment – The portion of the
Local Enrichment – Local enrichment refers to extra money raised by school districts beyond the minimum funding provided by the state system. Local enrichment can be equalized (see #1) or unequalized (see #2). Unequal local enrichment has been considered to be a weakness and monumental flaw of the
- Equalized enrichment is supplemental tax effort where the school district gets the same amount for the same tax effort.
- Unequalized enrichment refers to that portion of the state school finance system where some school districts get more tax revenue than other school districts, though both tax at the same level.
Local Share – Each school district is required to pay a portion of the cost of local education based on the amount of value of taxable property in each school district. That share is determined by the state of
Maintenance and Operation – M&O taxes pay for administration and operational costs of schools (teachers, busses, classrooms, etc.) but not school facilities. The state limits M&O taxes to $1.19 per $100 valuation.
Progressive Tax – A kind of taxation that is based on wealth. The more money one has, the more one pays. Federal income tax is an example of a progressive tax. This is the opposite of regressive tax. Property taxes are not progressive taxes because lower income persons tend to use a higher percentage of their income to cover that cost than higher income persons.
Property Poor School Districts – School districts that cannot raise enough revenue to provide even a minimum education without state funding.
Property Wealthy School Districts – School districts whose property wealth per student is notably higher than the state average. These school districts have a property wealth level above the “equalized wealth level” ($476,500 of taxable value per weighted student), which also are referred to as “Chapter 41” school districts. Put another way, this refers to school districts that are so wealthy that they do not need to get any money from the state to run their schools. In
Property Tax – The property tax is an ad valorem tax. Schools charge and collect property taxes (as do cities, counties and other taxing school districts).
Property Value – An estimate of the value of property if it were sold on the open market.
Recapture – The provision of the Texas school finance system that was created in 1993 in response to court rulings that found the system inequitable and, thus, unconstitutional. Currently, property wealth in the state’s wealthiest school districts is used to help support educational equity across the whole system. A school district with a wealth level of $800,000 keeps all the local tax money for the first $475,500 in its wealth base; however for the remaining $323,500 of wealth, it must share the extra revenue with the state.
Regressive Tax – A tax in which the proportion of one’s income that one pays in taxes is larger for people that are poor. An example of a regressive tax is the sales tax.
“Robin Hood” – Name erroneously given to the school finance system that requires wealthy school districts to share their locally-generated property tax money with the state of Texas to help pay for public education for all children. The name is a myth because the finance system does not “take from the rich and give to the poor,” rather it spreads the funds from property taxes across more than 800 poor, average and some above average wealth school districts around the state. The recapture system benefits more than 90 percent of students.
Sales Tax – A tax that is charged based on how much a person pays for an item or service. A sales tax is an example of a regressive tax in that low-income people pay a larger share of what they earn on such taxes than richer people. For example, if a person pays $1,000 in sales taxes in a year but only earns $10,000 in that year, 10 percent of his or her income is used to pay that tax. Even if a richer person pays $2,000 in taxes but makes $200,000 in a year, this amounts to only 1 percent of his or her income in taxes.
Special Population Funding – Refers to the four major student subgroups that have been determined to have special needs and therefore require supplemental funding. The student groups include: students who are eligible for free or reduced-price lunch (compensatory education); students with unique physical or emotional needs (special education); students needing specialized instruction because they are in the process of learning English (bilingual education and English as a second language); and students who are academically gifted or have fine art talent (gifted and talented). There are corresponding funding formulae dedicated to those groups.
State Income Tax – A state-collected tax that is charged based on how much money a person earns. Income tax is an example of a progressive tax because if you earn more, you pay more, and if you earn less, you pay less.
is one of the few states in the
State-Local Shares – The state funding system is based on the idea that recognizes that education can be jointly paid for by the state and local school districts. The local share is based on the ability of a local community to pay for its public schools based on the total amount and value of taxable property and the number of students it must educate. Some communities are well off with high-value homes, businesses, and oil or minerals; other communities have smaller homes and businesses. The state share is the difference between the cost of educating children in a school district, minus the local share that the state requires schools to pay for.
Target Revenue – The minimal amount of funding per WADA that is guaranteed for each school district based on its 2006-07 state and local revenue plus additional add-on funding provided to school districts in subsequent years. Until 2009, target revenue amounts were used as the basis for determining local school district funding, thereby over-riding existing more equitable state finance formulae that might produce less than or greater funding per WADA.
Tier I – The part of the state education finance system that covers basic costs for providing a minimum education in
Tier II – The portion of the
Tier IIa – The portion of the
Tier IIb – Includes an additional 11¢ of extra local tax effort school districts can levy after the meet their $1.00 local share requirement and use up the 6¢ allowed under Tier IIa. For the additional 11¢ tax effort (between $1.12 and $1.17) school districts are guaranteed a yield of $31.95 for each penny of tax effort. All school districts that have property wealth that generates more than the guaranteed amount are required to share the extra revenue through recapture.
Tier III – Allows school districts to raise funds for existing school facilities with the state guaranteeing a certain amount of funds for each extra penny of local bonded debt tax effort. This facilitates funding, however has been given only to a small subset of school districts that qualify because of limited state funding.
Unequalized Enrichment – A term used to describe money that is unequally available to school districts because of differences in local property wealth per student and that is not equalized by state funding. This gives certain school districts different amounts of additional funds for enhancing educational opportunity beyond the basic programs provided by the equalized foundation school program and equalized enrichment.
WADA – Weighted Average Daily Attendance – The state practice of providing extra money for schools based on the number of special needs students enrolled in a school district. The basic allotment is adjusted to take into account school district and student characteristics, such as limited English proficiency, disability and poverty.
Weights – Students differ greatly in their educational needs. The costs associated with meeting these needs vary widely (i.e., it is more expensive to provide vocational education than it is to offer a traditional academic program). The state finance system assigns an extra weight for each student with certain special needs and uses this to deliver extra money to school districts to help pay those extra costs. Under
West Orange-Cove Case – Is a challenge to the