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The current system of school finance in Texas allows for gross inequities among districts. Statistics indicate that although Texas ranks slightly higher than the nation's average in state wealth, its support of schools, as measured by the percentage of personal income devoted to education, ranks about 35th. These figures suggest that the state could be spending more on education. Two suggestions for correcting the state system, consolidation of districts and elimination of the "economic index" in current use, are inadequate. The major problems that must be addressed are how enrichment monies for operating expenses are provided, how capital outlay money must be raised, and how foundation program current expense allotments are determined. The reform of these problems must take into consideration district wealth, district family income, local school taxes, local municipal taxes, different common costs of education, concentrations of students with special needs, and different transportation needs. It must be kept in mind, however, that finance reform alone will not help the station of the poor and those from minority backgrounds unless the factors of cultural difference, language difference, economic difference, and Anglo political domination are also faced. (Author/IRT)

The Texas Foundation School Program, popularly known as the Minimum Foundation Program (MFP), is a very complex approach to school finance. It provides basic assistance in three areas--minimum salaries, operating allowances, and transportation--and additional assistance in two others--vocational education and special education. The state pays roughly 80% of the MFP costs. On the whole, the Texas system favors smaller districts, especially those under 500 average daily attendance, even though district wealth is generally an inverse function of district size. The major sources of the inequities have to do with how enrichment monies for operating expenses are provided, how capital outlay monies are raised, and how foundation program current expense allotments are determined. The manner in which local fund assignment is calculated is also weak but it is not as large a problem as the other three. An equitable system must take into consideration district wealth, district family income, local school taxes, local municipal taxes, different common costs of education, the concentration of students with special needs, and different transportation needs. (Author/IRT)