The Fort Bend school district has declared a financial emergency. Aldine ISD is considering asking voters for a tax rate hike. They’ve joined a growing number of Texas districts projecting the toughest budget year since the latest recession — and beyond.
“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.
The Legislature awarded all districts an extra $120 per student last year, but school administrators complain most of that money covered a state-mandated raise for teachers.
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.”
HISD shortfall looms
Last month, Thompson warned Houston ISD, the state’s largest district, that it could face a $57 million shortfall in coming years — if the state doesn’t fund schools at the same level it did using federal stimulus money.
“HISD is in better shape than some of the other surrounding districts,” board president Greg Meyers said. “This year, we’ll have to prioritize. Next year is going to be the more difficult time.”
Fort Bend ISD is one of several districts this year to declare financial exigency, a move that allows the elimination of jobs. Pasadena ISD, which made the drastic call last year and cut about 130 jobs, is in better financial shape for the coming year, said district spokeswoman Candace Ahlfinger.
Hoke, Fort Bend’s financial chief, said she hopes to avoid layoffs and absorb the job cuts through attrition, as Pasadena did.
But Fort Bend students are likely to see their class sizes grow from 20 to 21 children per teacher on average at middle and high schools. The district also is considering moving bus stops farther apart, with older students having to walk up to half-a-mile for pickup, and ending late bus service for students who stay after school, unless it involves tutorials.
The Aldine school district, facing a $14.5 million deficit, is considering asking voters to approve a 13-cent tax rate increase. The school board has not made a decision yet, but district officials are holding community meetings to pave the way just in case.
Under the state’s 2006 school funding system, districts must hold elections if they want to raise the property tax rate by more than a few pennies. So far, more than 240 districts — about a quarter statewide — have turned to voters for more money.
Klein vote possible
Klein ISD, which plans to dip into its savings account to balance next year’s budget, is considering holding a tax rate election in 2011 if the state doesn’t fix the system, said Thomas Petrek, the district’s chief financial officer.
Cypress Fairbanks ISD, which eliminated dozens of positions this school year and reduced busing to cover a deficit, is projecting a better financial outlook for the 2010-11 school year. The preliminary budget includes a 5.5 percent raise for teachers and a 5 percent raise for other employees. Cy-Fair spokeswoman Kelli Durham pointed out that the district has cut $56 million from its budget over the last four years.