Small Texas School Districts' Response to State Funding Reductions

Small public school districts scattered across Texas serve not only as educational institutions, but as the life blood of their communities. The school district is typically the largest local employer and a vast majority of community functions directly involve the parents, children and employees. For the students living within the district's boundaries, the school district serves as a place of learning and as a literal anchor for the history and traditions in these locales. In the sometimes recent past, whole small communities have either disappeared or become virtually non-existent following the closing of their school districts.Regardless of the importance of small school districts to their communities, they are extensions of the state government (Bigham, 2013) pursuant to Article 7, §1 of the Texas Constitution, with the primary mission of providing a quality education to their students (TEC §4.01(a)). As extensions of state government, they are subject to the same laws, policies, rules, and regulations as their larger counterparts. From a funding perspective, small school districts struggle with diseconomies of scale as they endeavor to comply with legal requirements in place for all public school districts in the state. Moreover, many of the smallest Texas public school districts have experienced decreasing student enrollments in recent years (Bigham & Nix, 2013), compounding their financial dilemmas in light of a state funding system that relies heavily on student enrollment as a basis for allocating funds to the state's public school districts.Problem, Purpose, and Research QuestionsIn response to the challenging state economy faced by the 82nd Texas Legislature, the Regular Program Adjustment Factor (RPAF) was implemented to reduce state funding to public school districts (TEC §42.101(c-l )). More specifically, the RPAF was an adjustment factor designed to reduce all Texas public school districts' regular program allotments (i.e., basic state aid) by 7.61 percent in the 2011-12 school year and 2 percent in the 2012-13 school year (TEC §42.101 (c-1 )).The purpose of this study was to determine how small Texas public school districts responded to the 7.61 percent cut in basic state aid. With RPAF coming into play, two research questions surfaced and this study was designed to answer them. First, what was the effect of the RPAF on state funding in the smallest Texas school districts? Second, how did the smallest Texas school districts respond to any change in state funding resulting from the RPAF?Theoretical FrameworkAmong the major theories of adequacy, equity, efficiency, and equalization applicable to school finance, the theory of adequacy was designated as most appropriate for this study. While giving credence to equity issues, and simultaneously acknowledging the increased goals and requirements placed on public school districts (NCLB, 2001 ), the concern of funding adequacy rises to the forefront. In simple terms, adequacy addresses the ability of a school district to generate enough money to fund its operations. Odden and Picus (2008) more thoroughly defined adequacy as "the provision of a set of strategies, programs, curriculum, and instruction, with appropriate adjustments for special-needs students, districts, and schools, and their full financing, that is sufficient to teach students to high standards" (p. 75). Brimley, Verstegen, and Garfield (2012) stated that "inequities in the amounts of revenue available per person to be educated and heavy property tax burdens on individual citizens have provided motivation for school finance reform in nearly every state" (p. 30), where the wording "amounts of revenue" equates to adequate funding. Given the nature and purpose of the RPAF in Texas, funding adequacy was the most appropriate theoretical framework upon which to base this study.Literature Review"Nationally, rural students represent about a quarter of all students attending public school" (Johnson, Malhoit, & Shone, 2012, n. …