Texas School Finance Experts Discuss Education Crisis

As educational institutions throughout Texas, including El Paso, get ready to establish their budgets for the upcoming 2024-25 academic year, many are anticipating a deficit where expenses surpass revenue.

Despite the state’s surplus of billions of dollars, legislators did not enhance school funding in the 2023 legislative session as Governor Greg Abbott linked public education funds to a contentious voucher program allowing parents to use state funds for private schooling.

Now, with pandemic-related relief expiring in September, districts are under pressure to deal with budget challenges by reducing staff, shutting down schools, and axing programs.

Some districts like the Canutillo Independent School District have chosen to seek a tax increase through a bond measure to potentially boost enrollment and revenue.

Others such as the Ysleta and Socorro independent school districts are tightening their budgets by eliminating vacant positions and exploring cost-saving measures. The El Paso Independent School District is considering school closures to prevent future financial struggles.

Most districts are unlikely to provide salary increases to teachers or staff in the upcoming school year.

Most El Paso school districts are anticipated to approve their budgets for the 2024-25 academic year in the latter part of June.

To delve deeper into the reasons behind the financial challenges facing Texas school districts, El Paso Matters engaged in discussions with two school finance experts: Tiffany Dunne-Oldfield, Deputy Executive Director of the Texas Association of School Boards, and Bob Popinski, Senior Director of Policy for Raise Your Hand Texas.

The Texas Association of School Boards is a nonprofit organization offering guidance and training to school boards, while Raise Your Hand Texas is a statewide nonprofit organization dedicated to policy reform for enhancing public education.

El Paso Matters: Why are many Texas schools projecting a budget shortfall in the upcoming school year?

Dunne-Oldfield: “Several factors contribute to the surge in school district budget deficits as they prepare for the next academic year. The Texas Legislature has not raised the basic allotment, the primary component of student funding, since 2019, despite significant inflationary price increases.

In reality, lawmakers left nearly $4 billion in additional funding unused as they could not reach an agreement on a school voucher legislation. The stagnant per-student funding alongside new mandates like the necessity of a commissioned peace officer on each campus and ongoing funding deficiencies, such as the $2.3 billion shortfall for special education, are worsening the financial challenges for school districts.”

Popinski: “During the previous legislative session, the legislature had the opportunity to alter the funding structure for school districts with a surplus of $33 billion and $24 billion in the rainy day fund. However, they did not take action to adequately fund our schools.

Currently, Texas ranks among the lowest 10 states in per-student funding, approximately $4,000 below the national average. Teachers in Texas receive about $8,500 less than the national average. All of these factors combined create a challenging situation for districts facing significant budget shortfalls, resulting in the adoption of deficit budgets, program cuts, and in some instances, school closures. While each district’s circumstances differ, the financial strain is felt across the state.”

El Paso Matters: Why might a district experiencing declining enrollment anticipate a financial deficit?

Dunne-Oldfield: “State funding to schools is based on average daily student attendance. A decrease in enrollment leads to reduced funding. Districts witnessing a drop in enrollment will be particularly affected by the state’s failure to address inflation, enhance student safety measures, or adequately support students in special education programs.

School districts are still required to maintain operational activities like electricity, transportation, and facility maintenance irrespective of the student count. Certain operational and instructional costs do not diminish simply because a district has fewer students.”

Popinski: “When districts are crafting their budgets at present, they must staff teachers and support staff based on projected student numbers. They forecast enrollment figures to determine their staffing needs, and if these estimations are off, it results in decreased funding.

On average, the foundation school program provides around $10,000 per student. Losing 10 students, especially for small districts, translates to a $100,000 loss in funding. This amount could equate to the inability to retain one or two teachers.”

El Paso Matters: How is the conclusion of COVID-19 funding affecting school district budgets?

Dunne-Oldfield: “Budget planning has become more complicated for school districts due to pandemic-related data irregularities surrounding enrollment, attendance, and the availability of time-limited (Elementary and Secondary School Emergency Relief) funding. Additionally, the state introduced costly mandates for accelerated instruction post-pandemic, resulting in recurring costs even as federal relief for such instruction is ending.”

Popinski: “School districts recognized the necessity to use COVID-19 funds for one-time expenses, with many utilizing them for HVAC upgrades or staffing for accelerated instruction. While this funding concludes at the end of the academic year, the issues arising from the pandemic era persist.”

El Paso Matters: What actions can school districts take to mitigate their deficits?

Dunne-Oldfield: “Given that staff expenses account for up to 85% of a district’s budget, navigating financial challenges without evaluating staffing levels is exceedingly difficult. Districts are likely to strike a balance between staffing and instructional needs, typically beginning with eliminating unfilled or soon-to-be vacant positions.”

Popinski: “School districts have limited avenues to generate additional revenue through the funding system, mainly by boosting enrollment and average daily attendance or raising the tax rate. Increasing the tax rate necessitates an election, which might not be viable for certain districts. Consequently, districts have few options to address budget shortfalls.

Some districts are adopting deficit budgets while simultaneously cutting programs. The repercussions on academic quality and instruction for students in the next school year remain uncertain.”

El Paso Matters: What measures should lawmakers adopt to provide assistance?

Dunne-Oldfield: “It would be beneficial for legislators to assess the cost of educating a student, establish the basic allotment at that level, and ensure funding escalates automatically with rising inflation.”

Popinski: “Lawmakers can take several steps, including the crucial task of increasing the basic allotment, a figure of $6,160 per student that has not been raised since 2019. To match the 22% inflationary rise since 2019, this amount should surpass $7,500.

Furthermore, incorporating automatic inflation adjustments can prevent inflationary pressures from significantly impacting school districts, ensuring that the basic allotment increases correspondingly as inflation rises.”

El Paso Matters: How can citizens contribute to a resolution?

Dunne-Oldfield: “We encourage parents and families to engage with their elected representatives and emphasize the vital importance of fully funding Texas public schools for their local communities and the entire state.

Popinski: “Community members should remain abreast of the reasons behind the school district budget cuts. Understanding the happenings at the Texas Capitol by January 2025 is crucial as that’s where funding decisions are made for our children. Until then, school districts face constraints in their financial operations.”