The Texas Commission on Public School Finance met on February 8, hearing from several witnesses. Topics generating significant conversation included campus level expenditures, identifying students in poverty, recapture, funding formula complexities, funding for charters and incentivize student outcomes. The chair of the commission, Judge Brister, also established workgroups in the subject areas of revenue, expenditures, and outcomes.
Texas Education Commissioner Mike Morath began testimony by clarifying previous comments to the Commission noting that money does matter but the question is “how” to distribute funding.
Campus-Level Expenditures
Committee members asked several questions regarding campus level expenditures, partially focusing on how district funding categories could obscure campus-level expenditures. However, more insight may soon be available as the federal government is now mandating that expenses be tracked at a school/campus level.
Identifying Students in Poverty
Several witnesses also noted that comparing Texas students in “poverty” to other states is challenging since states tend to use different methods to calculate poverty. For instance, while Texas uses free and reduced lunch as an indicator, other states may use census data or usage of safety net services.
Recapture and the need for greater funding transparency became a key discussion when Leo Lopez, Chief Financial Officer with the Texas Education Agency, spoke. He noted the percentage share of state education funding depends on if recapture is considered in the state calculation versus the local calculation – 42% and 38% respectively.
Charter Schools
The role of charter schools was also a primary discussion topic, including: how many charters were operating within areas of exceptional traditional public schools, the percentage of state funding provided to charters, and comparing the cost to educate a student at a traditional public school vs. a charter school.
Funding Formula Complexities & Incentivizing Student Outcomes
Regarding formulas, witnesses all agreed on the complexities within Texas’ school finance system, but differed on what should be tied to outcomes. 
Zahava Stadler, from EdBuild, testified that Texas’ student-based formula is derived from certain district characteristics, student characteristics, economic advantages/disadvantages, and English-Language Learners with adjustments being made at multiple levels. The witness argued that it was not the complexity of a formula, but rather the multiple adjustments being made that added unnecessary complexity in the system, forfeiting the benefit of transparency one could expect with a formula. It was also argued that tying funding to outcomes has less to do with tying it to formula and more about tying outcomes to an accountability system. Members were also cautioned when asking about incentivizing outcomes in areas such as STEM because Texas is large and diverse and presuming to know which career to incentivize, in which community, may be problematic.
Michael Griffith and Emily Parker, from the Education Commission of the States, also pointed to the complexities of the Texas formula, noting there is a difference between complicated and needlessly complicated. However, regarding outcomes it was pointed out that there is a need to define desired student outcomes, align desired outcomes with funding formulas, and set periodic goals to ensure achievement.
Lori Taylor, from the Mosbacher Institute for Trade, Economics, and Public Policy, argued that common budget practices in Texas fosters inefficiency in things such as district budgets and compensation. She also stated that the Cost of Education Index (CEI) was intended to help account for purchasing power differing across the state, but the CEI has not been updated in several years. Taylor also advanced discussion on schools following best practices to help foster efficiency and desired outcomes and pointed to Texas Smart Schools as a web-based platform tool that could be utilized as a resource.
Future meeting dates will be on March 7th and March 19th (public testimony included).