The school district squeeze

Everywhere you look there’s bad budget news.

“This is the worst I’ve ever seen it,” said Fort Bend ISD Chief Financial Officer Tracy Hoke, who’s worked in school finance for two decades. “I could turn out every light, and we’d still have a deficit.”

Hoke isn’t exaggerating about the lights. The Fort Bend Independent School District is facing a $20 million deficit for the coming academic year. The district’s annual utility bill is expected to top $18 million, a $1 million increase over this year.

The district’s other expenses also are rising — staffing three new schools will cost $2.3 million, for example — but its revenues are staying essentially flat under Texas’ school funding system. In 2006, state lawmakers slashed property tax rates and capped districts’ revenue at a certain amount per child. That amount varied widely and tended to penalize school systems with booming student enrollment. Fort Bend, for example, got $4,871 per student, while Tomball ISD earned $5,783.

Three things to note here. One is that any school finance system that cannot keep up with the needs of the fastest growing districts is a system that is built for failure, in every sense of the word. My thesaurus isn’t big enough to adequately describe the magnitude of the catastrophe that is brewing.

Two, education and health care are the biggest parts of the budget. As was recently pointed out to me, you could zero out the criminal justice article of the budget – shut down the prisons, set all the inmates free, close the courts – and you still wouldn’t cover even half of the revenue shortfall. (Don’t believe me – see for yourself. Schools are covered in Article 3, health and Human services in Article 2, with the biggest piece (Medicaid) being under the Health and Human Services Commission, and criminal justice is in Article 5, under Department of Criminal Justice.) We basically froze school spending in the 2006 special session where that giant unaffordable property tax cut originated, and the Lege is going to be forced to cut school spending further in 2011. Did I mention this was a giant disaster about to happen? Which leads to point three:

David Thompson is a Houston attorney who represented districts in a school finance lawsuit that was decided by the Texas Supreme Court in 2005. The court ruled for the districts, noting that they no longer had “meaningful discretion” over their property tax rates. The Legislature responded with revisions to the funding system in 2006.

Thompson said the changes provided “temporary relief,” but schools now are struggling under their fourth year of the so-called target revenue system. He wouldn’t say whether school boards are considering suing again.

“I will say that the trends to me are disturbingly looking like they looked prior to 2006,” Thompson said. “We have funding for schools that is arbitrary and not rational and not related to the standards we’re trying to accomplish. We have growing equity gaps in some places.”

You want to make a sure-fire bet on something? Bet on there being another school finance-related lawsuit in the coming decade, quite possibly in the early part of it. And before you say “well, maybe we can do more cuts on the health and human services side”, let me say three words to you: Frew v. Hawkins. It’s lawsuits all the way down. Fixing the revenue side of the equation is the only way out.

Related Posts:

• School districts are still a long way from getting relief
• Senate committee restores some money to public education
• This time it’s different