Texas has one of the largest and fastest growing school-age populations in the nation. There were 3,828,975 students in the public school system in 1996-1997. The school-age population in Texas will, according to the U.S. Department of Education, increase by14 percent between 1996 and 2008.[1] The cost of educating large numbers of students, particularly students with special needs, is increasing dramatically.

Texas Spends Less on Students than National Average
      Texas spends less per pupil on education than many other states in the nation. In spite of a greater than 10 percent increase in state appropriations for education since 1996 [2], Texas ranks toward the bottom compared to other states in per pupil spending for education (31st out of 50 states).[3] The average per pupil expenditure (including all funding sources) in the U.S. for the fiscal year 1996 was $5,652 and Texas' average per pupil expenditure was $5,168 ¾ $484 less per pupil in Texas. [4]
      School finance has been the subject of numerous political, legislative, and legal discussions (See History of School Finance). However, Texas children still do not have equal access to school funding. There is a great degree of variance in per pupil expenditures from one district to the next. In Texas, some school districts spent more than twice as much on total operating expenditures per pupil than others. While most of the school districts spent between $4,019 to $8,146 per student in 1996-97, four counties spent more than $10,000 per student and four counties spent less than $4,000 per student on operating costs.[5] This inequity in spending, along with the resulting inequities in resources, performance, and student achievement, affect the quality of the entire educational system in Texas.

How are schools funded?
      Schools in Texas are funded through a combination of federal, state, and local funds. School funding in 1996-1997 included: federal funds, 4 percent; state general revenue funds, 44 percent; and local funds, 52 percent.[6] The high wealth districts receive most of their funds from local sources (such as property taxes) while the low wealth districts receive more funds from state sources.[7]

      The state budget for public education during the 1998-9 biennium is $21.6 billion -- up 12.3 percent over the previous biennium.[8] At the state level, elementary and secondary education is the largest item in the state budget making up 44 percent of the General Revenue Funds.[9] Increased appropriations for education have been made possible by a variety of measures including: increasing and expanding tax rates, adding new revenue sources such as the lottery, and including recaptured taxes from wealthy school districts.[10] (See History of School finance for more information on recaptured taxes.)

      In addition to the program of state, federal and local aid, Texas school districts receive free textbooks, which are purchased by the state and distributed to schools using established formulas.[12]

Equity in School finance
      Researchers concerned about the equity of School finance have focused on two important definitions of equity: vertical equity and fiscal neutrality. Vertical equity recognizes that legitimate differences occur among children and that some students, such as those who are disabled, have low academic achievement, or limited English proficiency, need additional educational services. Therefore, school districts receive additional funds from the state for students in these special programs.[13]
      The concept of fiscal neutrality holds that no relationship should exist between revenue generated per pupil per penny of tax rate and local district property wealth per pupil.[14] School districts should be able to obtain similar revenue for similar tax effort. However, in the current system people living in districts with lower property wealth per student have to tax themselves at a higher rate than people living in higher wealth districts in order to raise the same amount of revenue per student, creating a greater tax burden on poorer households. In addition, school property taxes have increased statewide by 174 percent over the last 13 years.[15]

Conclusion
      Texas needs to re-evaluate its level of educational spending. Texas must provide adequate educational opportunities for all of its children, regardless of their income or residence within a specific school district. Increasing the state-funded portion of public education funding would help ease pressure on local property taxpayers. Texas must consider ways to increase its spending on education so that it is more in line with the nation as a whole.