Texas School Districts Run Out of Money

School districts will be forced to reexamine finances including health care spend……………….

Coronavirus hammers Texas school budgets

Revenue shortfalls expected to hit public education in 2020-21, resulting in layoffs

By Melissa B. Taboada


School districts in Austin and across the country are bracing for budget shortfalls that could result in layoffs and program cuts amid the greater economic fallout of the coronavirus pandemic.

Education leaders fear a drop in property values and tax collections, the primary local revenue source for school districts, and state education funding as Texas sales taxes and oil and gas prices plunge.

Austin school Superintendent Paul Cruz joined more than 60 other urban school district leaders across the country in a recent plea to Congress for about $200 billion more in more federal education assistance. Though the educators said the initial infusion of $13.5 billion included in the federal stimulus package will help with unforeseen costs in online instruction and technology and meal distribution, they cautioned that those funds aren’t enough. “These budget cuts will mean teaching staff will be laid off, class sizes will balloon, and remaining teaching staff will likely be redeployed into classes and subjects that they may not be used to teaching,” the superintendents said in the April 28 letter, sent through the nonprofit Council of Great City Schools. “All at a time when they will be asked to address unprecedented unfinished learning from the last school year.”

It’s unclear what the exact impact of the economic downturn will be on the state budget, but the Texas comptroller already has advised state agencies to cut their spending. On Wednesday, Gov. Greg Abbott, Lt. Gov. Dan Patrick and House Speaker Dennis Bonnen sent a letter directing state agencies to cut their budgets by 5%.

However, Texas Education Commissioner Mike Morath on Thursday told district leaders he would make good on delivering the federal stimulus money to help prop up their budgets. The Austin district is expected to receive nearly $17 million, while Round Rock will get $2.8 million and Leander will receive $740,000. The amounts are tied to districts’ percentage of low income students. Financial stability for the education systems beyond the next school year, though, is unclear.

Marguerite Roza, director of Edunomics Lab, a Georgetown University-based research center that examines education finance policy, said school leaders should expect state revenue shortfalls to hit districts’ budgets in 2020-21 as public education competes for fewer state dollars against priorities suchashealth.Nationally,she’s seeing state revenue reductions between 8% and 33%, and she said districts should begin curtailing spending now.

“These are pretty disruptive impacts on school districts,” Roza said. “More potential cost savings now can inhibit … layoffs later.”

Several Central Texas districts said they are doing just that, holding off on some hiring and discretionary spending to avoid worsening financial problems in the 2021-22 school year. Some also are weighing freezing teachers’salariesbutfearthey’ll lose their talent to neighboring districts.

Facing shortfalls

Districts already absorbed unexpected coronavirusrelated expenses, including purchasing and installing new technology for remote learning, personal protective equipment and increased meals to students and their families, and are planning to incur more if schools continue teaching online next school year. In the first six weeks after schools shuttered, the Austin district spent $7.6 million on such expenses. Administrators are planning on more than $30 million in pandemic-related costs, the majority for distance learning, next school year.

Complicating their ability to plan their budgets, districts are unclear whether they will see decreased enrollment, as some families move out of the area due to affordability issues or fear returning their children to school. With Texas school funding tied to attendance, it could mean a decrease in millions in state dollars. But districts say they also could see increases as students exit private schools or charter schools that buckle under financial strains.

In response to coronavirusrelated affects, including lack of facility rentals and athletic events, Leander district officials are projecting a $28 million deficit. The district’s budget includes a 2% employee raise.

In Austin, Nicole Conley, the district’s chief business and operations officer, said she is planning for a $49.3 million budget gap with the expectation that there will be more delinquent property taxes and lower collection rates.

“I don’t think we’ll be left unscathed,” Conley said.

Raises for educators

Austin’s$868.5millionoperating budget, which will include tapping reserves to cover its shortfall, doesn’t include employee raises. The district’s largest employee union is calling for 3% raises for the 2020-21 school year, wanting recognition for educators who had to change teaching strategies overnight after schools shut down

and who might be putting themselves at risk this fall if campuses reopen.

Round Rock district trustees have had contentious discussions over administrators’ recommendations of 2% raises and market adjustment pay increases for some employees. The school board twice punted the decision before approving the pay increases Thursday.

Other districts also are weighing raises for next school year, recognizing the chances to do so next year are slimmer.

“We’re still considering cost-of-living increases if we can afford it,” said Tim Savoy, Hays school district spokesman. “But if you don’t have the money coming in, then you can’t spend it. Every penny we save this year will be a penny we might not have to cut the year after.”

The potential cuts to education come after Texas in 2019 made sweeping changes to the way its schools are financed, pumping an additional $6.5 billion into public education.

Area districts spent the bulk of the additional state money in 2019-20 on increasing salaries for teachers and other employees. The Austin district gave historic raises, doling out 7% to those teachers, counselors and librarians with more than five years of experience, and giving other employees 6%.

Now they fear the pandemic will dry up those newly obtained education funding gains.

State education funding

A possible 20% reduction in local and state revenue could result in 275,000 teachers being laid off in major urban districts, according to the superintendents’ letter. Such a scenario is playing out in California, where budget projections show that state might reduce education funding by one-fifth amid its multibillion-dollar deficit.

In Austin, administrators are lobbying Texas lawmakers to continue funding House Bill 3 and not supplant its funding with federal coronavirus aid meant for schools. In New York, the state Legislature cut from education more than $1 billion, equivalent to the amount school districts there were given under the CARES Act. Similarly, in 2011, Texas state lawmakers attempted to balance postrecession revenue losses by slashing public education by $5.4 billion. The move resulted in layoffs and cuts to education programs across the state. Some cuts were never restored.

“That was the first time that I remember that education got a hit like that. That prepared us for this,” said Annette Vierra, the Round Rock district’s executive director of human resources.

Though the district slashed jobs in 2011, Vierra said it later was able to restore positions, so this go-round, administrators wouldn’t want to rush to let people go. Instead they’d examine changes to instruction, district structure and programs.

“Strategically, that taught us a lot,” she said. “So if our funding does get cut, we’ll all take pause,andwe’realreadyableto think in those patterns of what would we do, what we can do to change that to take care of the deficit we have.”