Tarrant County school districts hope for funding relief from lawmakers
Posted on Tue, Aug. 26, 2008
By MARK AGEE
Canceled programs, fewer extracurricular activities, teacher layoffs and even closed schools.
These are scenarios that area school districts say they will confront next year unless state lawmakers change the school funding model implemented two years ago. The system, school officials say, is inflexible and makes it difficult to cover increasing costs.
The Fort Worth and Arlington school districts are shifting millions from their savings accounts this year to cover budget shortfalls, as are most school districts in Northeast Tarrant County. Their financial situations are expected to be even more desperate next year.
"All we have are hard choices and not many options," said Ron Wilson, chief financial officer for Fort Worth schools. The district will spend about $43 million more than it brings in during fiscal 2008-09, according to the proposed budget.
Most districts around the state have to set their budget by Aug. 31, and many are facing similar problems, said Catherine Clark, associate executive director of the Texas Association of School Boards. The Legislature must either allocate more money for schools or make it easier for school boards to raise local money through taxes, she said.
"There's going to be loud conversation this fall and real screaming in 2009 unless there is real relief," Clark said. "Or one by one, we're going to be toppling over the edge of the cliff."
Rep. Dan Branch, R-Dallas, said he hears the districts' pleas. Branch, chairman of the House Select Committee on Higher and Public Education Finance, said he is confident that changes in school funding will be made in the 2009 session, which begins Jan. 13. But he said he isn't sure what they may be.
"We've gone all around the state listening, and we've heard a lot about rising costs," Branch said. "My sense is that my committee gets it and we'll be looking at ways to provide funds."
House Bill 1
The Texas Supreme Court ruled in 2005 that the state's former school financing system violated the state constitution. In 2006, lawmakers met in a special session to craft what became House Bill 1. That law forced districts to cut property tax rates by about a third; the difference was to be made up with state funds.
Clark and other experts cite three main problems with it:
State funding does not increase with inflation or rising fuel and food prices; it's based on figures from the 2005 tax year.
An increase in property values does not result in more money for school districts because any revenue increase from higher values is offset by a dollar-for-dollar cut in state funds.
School trustees cannot compensate for those issues by raising tax rates unless they ask voters for approval to set a rate higher than $1.04 per $100 of assessed property. And school tax rates are capped at $1.17, significantly lower than the $1.50 cap in the days before HB1.
What it means
"Basically the same money we all had two years ago is the same money we'll have next year, only things don't cost the same," said Steve Brown, associate superintendent of finance for Arlington schools. The district fell about $17 million short of balancing its 2008-09 budget after trustees approved a 2 percent pay raise for employees last week.
The Fort Worth district's revenue remains about the same as last year's $545 million, but utilities and fuel will cost an extra $3.5 million in 2008-09, and escalating food costs are projected to cause a $2 million shortfall in the food services budget.
Many school boards see no option besides trying to persuade voters to raise the tax rate.
"The goal of this change was to cut taxes, so it's frustrating that the Legislature is pushing us to raise taxes," Brown said.
Richard Kouri, director of public affairs for the Texas State Teachers Association, estimated that about a third of Texas districts will hit the $1.17 tax cap this year or next and that most other districts will be at the maximum soon after.
"When the majority gets back to $1.17, we're right back where we started," Kouri said.
Fixes
Branch said lawmakers will have to find a half-billion dollars to compensate for new students arriving at Texas schools before any structural changes can be made to school funding formulas.
"I know they're hurting, just like the private sector is hurting," Branch said, adding: "Right now we have it a lot better than other states. Things could be worse. We could have decreasing property values like California."
Clark said much of the strain could be relieved if the state updated the formula used to help support buses and transportation. That formula hasn't changed since 1984, she said.
She doubts that legislators will find the political will to confront the hot-button school finance issue, on which rich districts and poor ones agree on little.
"It's not like school districts expect there to be a Santa Claus, but I think there might be more optimism that is warranted," she said. "In the back of your mind, you've got to think: What if they don't fix school finance? What if this continues?"
Wilson has speculated that some smaller Fort Worth schools may have to be shuttered next year to save money.
Staff writers Traci Shurley, Jessamy Brown, Matt Frazier and Eva-Marie Ayala contributed to this report, which includes material from the Star-Telegram archives.