Here’s What Texas Should Do, And Avoid, To Reform School Finance
© Dreamstime


Here’s What Texas Should Do, And Avoid, To Reform School Finance

Texas' school finance system is riddled with complexities that diminish fairness and productivity.

Texas’ school finance system is riddled with complexities that diminish fairness and productivity. The Legislature and Gov. Greg Abbott are wise to prioritize school funding reforms, but it’s important to remember that it is also possible to make a convoluted system even worse.

Unfortunately, that’s exactly what a proposal to tie education funding to standardized test scores would do. The scheme, which was one of 35 recommendations made by the Texas Commission on School Finance, would reward school districts with money for every third-grade student who achieves proficiency on the state’s reading exam and provide additional funding for low-income students who hit the mark.

The rationale is simple: Reading is a fundamental requirement of learning and incentivizing schools to focus on early-childhood education would pay dividends in later years. While it’s obvious that literacy is critical, the proposal has numerous flaws.

First, for too long Texas’ funding system has distributed revenue based on factors that are unrelated to student needs. For example, the state’s Cost of Education Index, which is supposed to account for differences in school districts, allocates about $2.9 billion annually using dramatically outdated data from 1989. This plan would create additional inefficiencies that move the system even further away from student-centered funding.

Which leads us to the second problem: Tying education funding to test scores punishes students in low-performing schools, not the education officials who are failing them. If anything, the plan would give low-performing schools a valid excuse to evade accountability — our low-performing students need more help but they’re taking away funding and we can’t catch up, they’ll say.

Additionally, the proposal does nothing to promote actual accountability. Tying dollars to test scores doubles down on high-stakes standardized testing and is unlikely to produce the results that some envision. “While testing has failed to produce meaningful accountability, it has distorted the operation of schools to the detriment of educational quality,” Jay P. Greene, head of the Department of Education Reform at University of Arkansas finds. “Test-based systems are politically doomed because middle- and upper-middle-class families tend to prevail in education politics. This phony accountability harms education and undermines schools’ direct accountability to parents.”

School finance reform should absolutely be a state priority. Policymakers should pursue reforms that provide the foundation for parent-driven accountability. One model to potentially emulate is California’s recently implemented Local Control Funding Formula, in which education funding is largely allocated based on student characteristics.

Texas likes to mock California, but in this case, that state has learned it is important to tie funding to students and this system allows money to easily move with the kids if they move from one school district to another. In fact, about 150,000 of California’s students now attend a school outside of their zoned district. Students have more freedom to choose the school that is best for them and schools are incentivized to design programs that meet students’ needs and align with parents’ priorities.

For Texas, a good start would be to eliminate antiquated funding streams such as the Cost of Education Index and Chapter 41 Hold Harmless, which provides funding for some districts based on their revenue in 1993. And if policymakers want to strategically provide more resources for K-3 students they could weight student funding by grade level and get rid of the High School Allotment, which allocates dollars outside of the equalization formula.

The core concept of a fair, transparent funding system needs to be based on money following students to their classrooms. Allocating dollars based on test scores moves the ball in the wrong direction and ensures that the system will remain fundamentally flawed. Policymakers should instead focus on reforms that eliminate inefficiencies and empower parents.

This article first appeared in the Corpus Christi Caller Times.

Stay in Touch with Our Pension Experts

Reason Foundation’s Pension Integrity Project has helped policymakers in states like Arizona, Colorado, Michigan, and Montana implement substantive pension reforms. Our monthly newsletter highlights the latest actuarial analysis and policy insights from our team.

This field is for validation purposes and should be left unchanged.