Brilliant Analysis of the Problems with the 65% Rule

The Texas Equity Center has released a brilliant report that discusses the problems with the Governor Perry's Executive Order that requires school districts to allocate 65% of their revenue for "direct classroom expenditures."

While I think there is no debate that the maximum dollars possible should be directed to the classroom, you can read my prior posts here, here, here, and here about the problems I perceive with this mandate.

The Equity Center's report accurately states that this Executive Order, if implemented using the National Center for Education Statistics' definition of "direct classroom expenditures," amounts to the largest unfunded mandate in Texas history.

As an example, transportation costs are excluded from the NCES definition.  The Equity Center makes the following analysis:

For a timely example, consider the impact of a $2 per gallon increase in the cost of diesel fuel for school buses. Not only must a district find away to come up with the extra $2 in actual cost (35% portion), it must also find an additional $4 to spend in the 65% portion to maintain the required ratio, for a total increase of $6 per gallon.  That would make $3.00/gallon diesel actually cost a total of $9.00, once the 65/35 ratio is maintained. This illustrates the inherent problem with restricting expenditures to a given ratio—a problem that certainly needs to be addressed.