• by Albert Cortez, Ph.D. • IDRA Newsletter • August 1999

Dr. Albert CortezSix months or 180 days after its grand opening, the Texas legislature went home with little fanfare. Legislators had approved a $2.5 billion increase in state funding for education over the next two years, a $3,000 increase in teacher salaries, a new funding tier for existing debt service (including targeted support for fast growing school districts), and modest increases for Tier I (basic allotment) and Tier II (equalization funding). Yet there seemed to be little excitement surrounding these developments.

Many people acknowledged that teachers were in need of a pay raise, in part because the state is facing a growing teacher shortage created by severe competition for new workers in the health economy.

However, many lawmakers tended to pay as much attention to limiting the extent that school districts can raise local taxes to supplement state allocations – even when those supplements are equalized by state funding formulas.

In the name of property tax relief, local schools were required to cut back local taxes by $1.4 billion to offset some of the increased state funding.

Legislators also considered action on such topics as mandated retention in grade based on student performance on the Texas Assessment of Academic Skills (TAAS), school dropout rates, disciplinary alternative education programs and vouchers.

Retention In Grade and Early Childhood Education

Concerns about student achievement led to extensive discussions in the education committees of the House and Senate about the best ways to improve student performance. Some lawmakers pressed for punitive measures that focus on retaining students who fail the TAAS – proposing a multi-year phase-in that will lead to mandated retention in grades four, eight and 10. The mandatory retention is automatic unless a local grade placement committee unanimously votes to promote the student.

Strongly endorsed by the governor, the in-grade retention provisions call for early identification of pupils who are having academic difficulties as reflected on state measures and for targeted interventions to help students do better in subsequent TAAS administrations. If the interventions prove ineffective and the student fails the TAAS in two successive administrations, the student must be retained in grade, unless a special committee votes unanimously to promote the student.

In contrast, other policy-makers stressed expanding state funding for kindergarten, pre-kindergarten and HeadStart programs, believing that providing early access to high quality early childhood programs is a more effective means of preventing future student under-achievement (as is supported by educational research) (McCollum et al, 1999).

The fact that both programs were included in the final bill reflects the accommodations used to resolve conflicts programs that were characteristic of this last session.

School Dropouts

Despite much attention to dropout counting and reporting irregularities examined by IDRA and chronicled in media accounts from across Texas before the legislative session, policy-makers were unable to agree on any specific improvements to the current inadequate system (Supik and Johnson, 1999).

Many people acknowledged that local school system reports of dropout rates are being grossly underestimated. State dropout statistics are considered so suspect that national agencies, such as the National Center for Education Statistics, report an alternative statistic based on state reported census data.

Yet resistance from administrative and school board forces (concerned with the affects of accurate dropout counts on their state accountability ratings) and some state leaders (concerned about how Texas might “look” in national media coverage) combined to stifle urgently needed changes in the state dropout reporting process.

State Senator Gonzalo Barrientos attempted to deal with the shortcomings in the state dropout counting and reporting procedures. He succeeded in getting his proposal (Senate Bill 1516) through the Texas Senate. Unfortunately, opposition to some of its provisions and a crowded calendar at the end of the session contributed to the bill’s failure to be voted on by the House public education committee.

The state education agency in turn tried to ease concerns by touting emerging changes in its own methodologies and movement toward a state “leaver” counting approach that would help ascertain the status of students who may have left the Texas school system prior to graduation.

Unfortunately, the school leaver reports submitted in the first reporting period included a disproportionate number of students who could not be accounted for by local district officials. State educational leaders decided to exclude these “unaccounted for” students from official dropout statistics. To “motivate” local school officials to improve student tracking efforts, local school officials were warned that next year’s dropout counts might include these “unaccounted for” students.

In attempt to alleviate some of the pressure on Texas schools that report high dropout rates, the Texas legislature provided a special allocation of $85 million to finance special intervention programs for ninth grade pupils identified as at risk of dropping out. The commissioner was given responsibility for drafting rules for awarding of grants for these programs. Some have suggested that criteria for awarding those special funds should consider not only the extent of local high school dropouts, but also whether the district proposes to use research-based interventions to impact the issue.

Perhaps a secondary criteria would also consider numbers of students reported as unaccounted for, giving priority to those schools that have done the best job of determining the status of all pupils who had left school prior to graduation.

Failure to directly address the state’s questionable dropout counting procedures continues to raise reservations about the credibility of the state accountability system, previously praised by some as a national model for improving school outcomes.

Disciplinary Alternative Education Programs

Growing state concerns with mushrooming disciplinary alternative education program (DAEP) operations led to extensive legislative debate during legislative hearings.

Proponents of alternative education placements argued for expanding teachers’ rights to remove students. Critics cited sub-standard curriculum, differential certification requirements for personnel working in DAEPs, absence of communication between DAEPs and referring schools, and creation of watered down alternative accountability systems for DAEPs as cause for major overhauls in the current system (Cortez and Robledo Montecel, 1999).

Witnesses described prison-type settings, sites where actual classroom instruction occurred for only a fraction of the day, and sites where students were left with little or no curricular materials that often were not align with instruction conducted on the regular school campuses. Some legislators were dismayed. Lawyers who testified before the committee talked of instance after instance where districts were challenged for failure to provide students with due process in the DAEP referral process. Others complained of young pupils being placed in DAEPs that mixed elementary and high school pupils and an absence of a graduated approach to student discipline in local school codes of conduct.

Because of major concerns raised by community members and educators, the legislature adopted a number of notable changes to Texas’ alternative education program operations. Among the most noteworthy were:

  • a requirement that DAEPs that serve pupils for longer than 90 days must be held to the same accountability standards as regular schools (rather than the alternative accountability process included in prior law);
  • provisions barring the referral of students younger than age 10 to alternative programs; and
  • expansion of teacher training in discipline management strategies and expanded training related to local district codes of conduct.

Subsidizing Private Education with Public Tax Money

Perhaps the most intense, divisive topic in education was the long debate on initiating a program to funnel state funding for private education, popularly referred to as school vouchers. Even before the session began, a collection of pro-voucher proponents actively campaigned for the issue – including funneling millions of dollars into the campaign coffers of pro-voucher candidates. Voucher proponents seemed poised for a victory even before the session began as they succeeded in getting the governor to endorse their concept of siphoning monies away from public schools into an “alternative” school funding scheme.

They had reason to be optimistic when the elections produced a victory for a pro-voucher lieutenant governor candidate (who also happened to receive a last minute million-dollar campaign loan from the state’s leading pro-lobby contributor). Add to that a Senate education committee chair who pledged to shepherd a measure through the Texas Senate. It is understandable how some pro-voucher proponents were already counting the millions of state dollars that would flow into private schools shortly following the session’s close.

On the other side of the voucher issue was a loose knit collaboration of distinctive forces that included professional education groups (public school teachers, school boards, administrator groups), advocates of separation of church and state, and community-based organizations that had serious misgivings about the prospective impact of a voucher-driven system on issues of equal access, finance equity, and quality neighborhood schools.

Voucher proponents celebrated as numerous legislative sponsors championed their cause, introducing several variations of “experimental” voucher plans, all designed to re-direct public school funding into private schools. A common thread in the major proposals targeted sub-groups of schools or districts in a strategic move perhaps intended to isolate those who would be impacted and thus decrease the possibilities of broad-based opposition.

A second common characteristic limited initial eligibility to students in low-income families – to strengthen the appearance that voucher proponents were seeking to “help” poor and minority pupils by expanding their school options.

A third common strategy called for targeting low performing school districts to allow for experimenting with the notion that low performing schools could be “motivated” to improve by taking away their money and their students. Citing anecdotal stories, relying on what on the surface seemed “logical” inferences, and often using misleading tactics, voucher proponents expressed great dismay when opponents challenged their empirical assumptions and the long-term intent of the voucher agenda.

Voucher proponents and opponents took their battles to all corners of the state, participating in countless debates, enlisting media coverage and bombarding policy-makers with weekly, sometimes daily, information.

The issue itself took on national significance in emerging presidential politics. Texas lawmakers struggled with the complex questions that arose during the long and often heated exchanges by the opposing camps. One of the state’s leaders even observed that he had found the issue to be only slightly less divisive than the state’s most contentious issues.

Within this context, voucher proponents and opponents collided. What ensued were weekly forays and feints and withdrawals as voucher proponents sought to modify their proposals just enough to garner the votes needed for passage. Yet as they succeeded in getting one legislator to drop objection to a specific provision, the same change caused new opposition in another camp.

The forces opposing the provision of public tax money to subsidize private schooling in turn initiated an array of strategies designed to inform the public and state legislators of the issues involved and countered each pro-voucher tactic with an organized opposition.

The effort eventually resulted in the Senate education committee’s passage of a pro-voucher proposal. That plan, sponsored by Senator Teel Bivens of Amarillo, would have established a state voucher experiment limited to the six largest school systems in the state. It would have provided state monies to a percentage of pupils who would choose to opt out of public schools and attend private schools. However, opposition by slightly more than one-third of the Senate led to the bill’s demise. It never reached the Senate floor for a vote.

In the House of Representatives, voucher proponents were stymied by a public education committee that included a majority of voucher opponents. The House anti-voucher sentiment in turn was reinforced by the House speaker who had long expressed serious misgivings about the affects of vouchers on the majority of students who remain enrolled in the state’s public schools. After months of bitter struggle, characterized by a siege type of mentality on the issue, anti-voucher forces once again successfully staved off corporate subsidized efforts to dramatically re-structure the manner in which Texas schools are funded.

IDRA worked collaboratively with anti-voucher forces pointing out that the proposals set forth by voucher proponents were little more than thinly disguised attempts to undo the years of struggle to create a more equitable funding system. Many people observed that a large proportion of policy-makers who now wanted to “improve” public education with vouchers were the same persons who historically opposed reforms that would have made the schools more equitable and who often opposed providing additional state funding to help local schools improve their programs (Cortez et al, 1999).

When the smoke finally cleared, voucher proponents once again gazed at an empty plate, as no bill or amendment that would have created a state-funded voucher plan was approved. Though disappointed, the voucher lobby vowed to resume its efforts during the 2001 legislative session. Anti-voucher forces no doubt will be ready for them again. Through constant grassroots action, voucher opponents proved that organized people can defeat organized money.

Teacher Salaries

In past years, actual local school teacher pay increases were impacted y whether or not school district salary scales already compensated teachers at levels above the state required minimum. Districts that paid above the minimum state salary scale had the option of either “passing through” the additional monies that they may have received as a result of the state prescribed increases in the minimum salary levels or providing only a portion of that increase since they were already paying above the state minimums.

The new policy however requires local school districts to provide an additional $3,000 above the levels that teachers would have received under the previous year’s pay scale, ensuring that school districts provide the across-the-board increase intended by the legislature. Districts that were considering salary increases in excess of the $3,000 level however, were allowed to limit their local increases to the state prescribed levels. No additional state funding was provided for teacher pay raises above the $3,000 level.

To help fund these salary increases, the legislature increased the basic allotment (the building block of the entire foundation program) from $2,396 per weighted ADA to $2,537 a net increase of $141 or 5.9 percent over the previous biennium level.

Special Population Program Funding

Funding for special population programs in Texas is based on a weighted pupil approach that is connected to the regular program funding provided through the basic allotment.

In this approach, special education, bilingual and English as a second language (ESL) programs, gifted and talented programs, and vocational programs are provided funding calculated as a percentage of the basic allotment.

For example, gifted and talented pupils are assigned a “weight” of 0.12, meaning that each pupil who is identified as gifted and talented and participates in a local gifted and talented program earns an additional 12 percent of the adjusted basic allotment amount for the district.

The amount of the additional funding that is provided by the state will vary from district to district, since the amount of actual state funding received for these programs, like most state funding, is based on the local property wealth of the school district.

In property poor districts, if the increase in the basic allotment produces an additional $50 per gifted and talented pupil, the district might receive $40 in state funding, with the additional $10 generated from local tax revenue.

In a wealthy district with similar ABA levels, $40 of the additional $50 gifted and talented allotment may come from local tax money, with the state providing only $10 from state coffers.

Weights for the populations other than gifted and talented include:

  • limited-English-proficient students who participate in districts’ bilingual education or ESL programs are assigned a weight of 0.10;
  • students who are identified as eligible for the federal free or reduced price lunch program are assigned a weight of 0.20;
  • students who participate in a district vocational education program are assigned a weight of 1.45 adjusted for the percentage of time they actually spend in vocational education courses; and
  • special education pupils are assigned a weight based on their level of disability.
  • State funding amounts may vary based on wealth and district enrollments in these special programs. But for the most part, school districts will receive additional state funding for special population programs as a result of the domino affect triggered by the state increase in the basic allotment.

Facilities Funding

Additional features of the school funding bill include a special formula to provide facilities funding for school districts that have had enrollment growth greater than the state average.

Under the new plan, these districts qualify as a higher priority under the state facilities funding program. This was done by adjusting their “need” factors within the state facilities funding formula. Under the formula, schools are rank ordered by a combination of factors that include local property tax base wealth and debt service tax effort.

These new adjustments add district growth rates as a factor in the formula, significantly improving a fast growth district rankings. Since in past years, state funding has failed to provide enough state monies for all eligible districts, the adjustment will help ensure that rapidly growing districts get a better opportunity to get some state assistance to deal with their critical new construction needs.

The legislation also includes a special $50 million for districts opening new schools to help offset associated short-term costs.

To address qualifying districts that have already built new schools or upgraded existing facilities without state support, the legislature finally created a new state funding formula that provides state monies to help schools pay for existing facilities-related debt.

Followers of the Texas school funding system litigation (known as the Edgewood cases) remember that while the state Supreme Court endorsed the constitutionality of the current funding system, it warned the state that its failure to adequately address the inequities in school facilities threatens the overall constitutionality of the system in the future.

Limited legislative action in this area and other areas has prompted the filing of a new challenge (labeled Edgewood V) to the funding system by the plaintiff intervenor who was involved in original Edgewood litigation. Judge Scott McGown, the presiding state district judge in the case postponed a hearing pending the completion of this legislative session in order to give the legislature an opportunity to address the issue before that court hearing.

The legislature proceeded to adopt a formula that provides new Guaranteed Yield funding based on existing debt service tax effort in local districts, a provision that IDRA has long championed. Whether there is sufficient state funding provided to fully support the new facilities Guaranteed Yield third tier remains to be seen, but incorporating this feature in the state funding scheme puts in place one more piece of the puzzle required for an equitable funding system.

At this writing a number of problems have been raised regarding this new tier including how to address “lease purchase” situations and debt paid from district fund balance revenue.

Property Tax Relief

Seeking to make political points for upcoming elections, policy-makers incorporated language into the legislation that requires local school districts to decrease local property taxes by excluding from school taxation the first $15,000 of local property values. To offset local school district tax revenue losses resulting from these exemptions, the legislature provided increased state funding to local schools. The cost of property tax relief provided by the state totaled $1.4 billion for the biennium. While giving a minimum amount of tax reductions to local property tax payers, school districts experienced no net growth in overall revenue from this provision, since they are required to cut back local taxes in an amount equal to the state revenues received as a result of mandated property tax cutbacks.


Early assessments of the overall impact of the state education funding bill indicate that the additional monies will slow the expanding gap in spending that had been created during the last legislative session, though its full effect may be impacted by the resolution of the questions related to funding for existing facilities.

Overall however the session may be marked by the prevailing concern with increasing teacher salaries and providing property tax relief (familiar old refrains in Texas) but not the types of reforms that put Texas at the forefront of educational reforms in this country over the last decade.

 In-Grade Retention Legislative Outcomes

Governor Bush’s Social Promotion Initiative

  • To be phased in starting in 2004
  • Children will be retained in grade if they fail the TAAS three times
  • Alternative assessment can be used
  • Each time a student fails an assessment test, the district must provide accelerated instruction in the area failed

Grade Placement Committee

  • Composed of principals, parent or guardian, and the teacher
  • Refers the student to an accelerated instruction group
  • Parent or guardian can appeal before the committee
  • Decides to retain or promote student based on indicators defined by the local board of trustees
  • Unanimous vote required for promotion
  • Decision is final


Cortez, A., and M. Robledo Montecel. Disciplinary Alternative Education Programs in Texas – What is Known; What is Needed (San Antonio, Texas: Intercultural Development Research Association, 1999).

Cortez, A., and J.D. Supik, A.A. Romero, C.L. Goodman. Students for Sale – The Use of Public Money for Private Schooling (San Antonio, Texas: Intercultural Development Research Association, 1999).

McCollum, P., and A. Cortez, O.H. Maroney, F. Montes. Failing Our Children – Finding Alternatives to In-Grade Retention (San Antonio, Texas: Intercultural Development Research Association, 1999).

Supik, JD, and R.L. Johnson. Missing: Texas Youth – Dropout and Attrition Rates in Texas Public High Schools (San Antonio, Texas: Intercultural Development Research Association, 1999).

Albert Cortez, Ph.D., is the director of the IDRA Institute for Policy and Leadership. Comments and questions may be directed to him via e-mail at feedback@idra.org.

[©1999, IDRA. This article originally appeared in the August 1999 IDRA Newsletter by the Intercultural Development Research Association. Permission to reproduce this article is granted provided the article is reprinted in its entirety and proper credit is given to IDRA and the author.]