Education in Crisis: Q&A with Texas School Finance Experts

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As school districts across Texas – including El Paso – prepare to set their budgets for the 2024-25 school year, many are expecting their expenses to outweigh their revenue, leaving them with a deficit.

Despite the state’s multi-billion dollar surplus, lawmakers failed to increase school funding during the 2023 legislative session after Gov. Greg Abbott tied public education dollars to a controversial voucher program that would have allowed parents to pay for private school using state funds.

Now with pandemic-era relief set to expire in September, districts are scrambling to address a budget crisis by cutting staff, closing schools and eliminating programs.

Some like the Canutillo Independent School District have opted to ask voters to increase taxes through a bond measure, in the hopes of increasing enrollment and bringing in more revenue.

Others like the Ysleta and Socorro independent school districts are tightening their belts by eliminating vacant positions and exploring ways to save money. The El Paso Independent School District is looking into closing schools to avoid any future budgetary woes.

Most are unlikely to give raises to teachers or staff in the coming school year.

Most El Paso school districts are expected to approve their budgets for the 2024-25 school year in mid- to late June.

To find out more about how Texas school districts got into this situation, El Paso Matters spoke to 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.

TASB is a nonprofit organization that provides assistance and training to school boards, and Raise Your Hand Texas is a statewide nonprofit focused on policy reform to improve public education.

El Paso Matters: Why are so many Texas schools expecting a budget deficit next school year?

Dunne-Oldfield: “Several factors are contributing to the rise in school district budget shortfalls as districts are preparing their budgets for next year. The Texas Legislature has not increased the basic allotment — the main component of student funding — since 2019, despite inflationary double-digit price increases.

In fact, legislators left almost $4 billion in additional funding on the table because they could not agree on a school voucher bill. That stagnant per-pupil funding coupled with new mandates, such as the requirement to have a commissioned peace officer on every campus, and ongoing funding shortages, like the statewide $2.3 billion gap in special education funding, are exacerbating school district budget woes.”

Popinski: “The legislature had the ability to change the funding structure of how much flowed to school districts last legislative session. They had $33 billion in surplus funds and another $24 billion in the rainy day fund. The legislature did not act on funding our schools up to the level that it needs to be.

Currently, we are ranked in the bottom 10 in the country in per student funding. That’s about $4,000 below the national average. We pay our teachers about $8,500 below the national average. … So all of that wrapped up is really the perfect storm for districts facing these big budget shortfalls. They’re having to adopt deficit budgets. They’re having to cut programs and in some cases, they’re having to shutter schools. While it’s different in every district it’s reaching almost everyone in the state.”

El Paso Matters: Why might a district with declining enrollment be expecting a deficit?

Dunne-Oldfield: “The state funds schools based on student average daily attendance. Fewer students means less funding. Districts seeing a decline in enrollment will be hit particularly hard by the state’s failure to help schools keep up with inflation, improve student safety measures, or adequately provide for students receiving special education services.

“Consider that school districts still need to keep the lights on, buses running, and their buildings clean and safe. There are certain operational and instructional expenses that don’t simply decrease because a district has fewer students.”

Popinski: “When districts are shaping their budgets like they are right now they have to staff their teachers and paraprofessionals based on how many students they think are going to attend. So they’re going to try to project what that enrollment is going to be and if that enrollment is off, they get less funding.

On average, it’s about $10,000 per student that our foundation school program funds. So if you lose 10 kids, if you’re a small district that’s $100,000 that your school district isn’t receiving in funding. That can be one or two teachers that you won’t be able to afford.”

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

Dunne-Oldfield: “Budget planning generally has been more difficult for school districts because of pandemic-related data anomalies connected to enrollment, attendance and the availability of time-limited (Elementary and Secondary School Emergency Relief) funding. The state also passed costly mandates for accelerated instruction as we came out of the pandemic, which has led to recurring costs even as the federal support for that instruction is expiring.”

Popinski: “School districts knew they needed to use (COVID-19) money for one-time expenses. A lot used it on HVAC upgrades or staffing for accelerated instruction. That funding goes away at the end of the school year, but it doesn’t mean the problems from the pandemic era go away as well.”

El Paso Matters: What can school districts do to reduce their deficits?

Dunne-Oldfield: “Because staff account for up to 85% of a district’s budget, it’s nearly impossible to navigate a challenging budget situation without reviewing staffing levels. They will likely balance staffing needs with instructional needs and generally work first to eliminate positions that have not been filled or will soon be vacant.”

Popinski: “There’s only a handful of ways that a school district can earn additional revenue through our funding system: that is to increase enrollment and average daily attendance, or it’s to increase the tax rate. To increase your tax rate you have to go out for an election, and some school districts don’t have any of that tax rate available to them. So there are very limited ways a school district can fix this budget shortfall issue.

“Some school districts are adopting that deficit budget and cutting programs at the same time. What impact is that going to have on academics and instruction for our kids as we go into next school year remains to be seen.”

El Paso Matters: What should lawmakers be doing to help?

Dunne-Oldfield: “It would be helpful for legislators to study how much it costs to educate a student, set the basic allotment at that number, and then set funding to increase automatically as inflation rises.”

Popinski: “The legislature can do a handful of things, including what they were called on to do last legislative session and increase the basic allotment. That basic allotment of $6,160 (per student) has not been increased since 2019. It would need to be a little north of $7,500 to keep up with that 22% inflationary increase since 2019.

“In addition to that, you can make sure that inflationary pressures never really get back to school districts by adding automatic inflationary adjustments so that when inflation does go up, that basic allotment goes up automatically as well.”

El Paso Matters: Can citizens do anything to help?

Dunne-Oldfield: “We’d encourage parents and families to talk with their elected officials about why fully funding our Texas public schools is so important to their local community and to the state as well.

Popinski: “Community members need to stay informed on why they are having to do these budget cuts at the school district level. Make sure that you understand what’s going on in the Texas Capitol come January 2025 because that’s where the funding will flow for our kids. Until that point, school districts are constrained.”

This article first appeared on El Paso Matters and is republished here under a Creative Commons license.

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