It sucks to be a school district

And it's not going to get better any time soon.

School districts across Texas are likely to face extreme fiscal hardships over the next two years as transportation costs spiral out of control, enrollments continue to grow and the transition from textbooks to technology progresses.

That was the word from a panel of educators and advocates at the Texas Education Agency's school finance summit Tuesday. They and Texas Education Commissioner Robert Scott began laying the groundwork for what they would seek from lawmakers when the 81st Legislature convenes in January.

"We just don't have enough money, basically, to provide a quality education experience to our students," said Sharon Shields, superintendent of the tiny La Vega school district near Waco.

Like several of her counterparts who participated in the six-hour discussion, Shields said her district needs more financial aid from the state and greater flexibility to raise and spend the money it receives from local taxpayers.

Most of the educators agreed that the school finance overhaul enacted by lawmakers two years ago -- an attempt to settle the ongoing dispute between rich and poor school districts -- is already falling short on generating the funds needed to sustain public schools.

"We always pull up with a penny-wise, pound-foolish solution," said Richard Kouri, who represents the Texas State Teachers Association.

The crux of the problem is that the funding for school districts didn't include any room for cost-of-living increases. Which might not have been a big deal in some years, but when things like gas and food prices skyrocketed, it put a huge hole in their budgets. Their operating expenses have gone up while their financial resources have not. As you might expect, that has been disastrous for them.

Now, the Legislature could choose to do something about this in 2009. Perhaps with a new Speaker, some help could be on the way for the schools. But thanks in part to the maneuvering that separated the property tax cuts from the rest of the budget in 2007, and in part to the slavish devotion to property tax cuts uber alles, it's hard to picture anything other than more penny-wise "solutions" coming forth.

Harvey Kronberg reported on this as well.

The informal consensus of the group appeared to hinge on the fact that a significant new infusion of money was not expected for education next session. Indeed, the business margins tax already is showing a lower-than-expected return. That means that lawmakers might have to dig even further into the anticipated $10.7 billion surplus in order to bridge the 50-cent reduction in property taxes.

With all these factors in play, the minimum the group appeared ready to accept was a three-pronged approach to the problem: First, that some type of floor be set on target revenue so that every district hits a minimum target revenue of around $5,000 per student. That amount would be adjusted by various weights.

The second measure would be some type of funding put in place to address the inflation that is eating up school district budgets. If the revenue targets were increased by 1 percent a year, the cost would be about $630 million. If the revenue target were increased 1 percent in the first year and an additional 1 percent in the second year, for a total of 2 percent, the total cost would be about $950 million.

Then it would be the fervent hope of those who have dealt with the school finance system the longest - and especially [Lynn] Moak and Bill Grusendorf of the Texas Association of Rural Schools - that lawmakers start to move the system back to one driven by formulas and not the various past hold harmlesses.

The "hold harmlesses," added each time the school finance system is revised, is funding intended to make sure no school district is worse off going into a new school finance system than they were going out of the old system. The system has been changed so many times in Texas that the amount of the past three hold harmlesses - or "hold harmli," as Scott calls it -- is now $2 billion, an amount that means the hold harmlesses have more impact on the system now than any aspect of the school finance formula.

What needs to be done is to close the gap between the basic school allotment and the target revenue amount. Either aspects of the funding formula can be adjusted or, as Grusendorf suggested, the guaranteed yield on tax effort can be increased. Right now, in an effort to equalize funding between poor and wealthy school districts, the state guarantees about $43 per penny of tax effort. By raising that yield to $50 per penny, about $1.8 billion can be shifted into the basic allotment, Grusendorf said.

Good luck with all that, that's all I can say. I just hope everyone can hang on till 2011. Eye on Williamson has more.

Posted by Charles Kuffner on July 31, 2008 to Budget ballyhoo