Crossroads school districts prepare for budget cuts
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TARGET REVENUE: The amount used to calculate how much local and state funding a district can earn each year. A formula is used to determine the baseline amount of money the school receives per-student, per-year from the state. The ...
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TARGET REVENUE: The amount used to calculate how much local and state funding a district can earn each year. A formula is used to determine the baseline amount of money the school receives per-student, per-year from the state. The state makes up the amount the district can't fund from local taxes. The numbers differ from district-to-district based on factors like attendance, cost of living, local property taxes, and the size of the district. The numbers also differ pupil-to-pupil based on programs the student is in, like special education, foreign language and career and technical development.
FEDERAL EDUCATION JOBS FUND: About $10 billion of federal aid will be administered to states to disperse to local school districts. A provision for only the state of Texas requires Gov. Rick Perry to assure that the state will maintain its support of public schools and use the money to supplement, not supplant federal funds.
FUND BALANCE: A reserve fund schools can dip into to help get through difficult budget years. The Texas Education Agency recommends districts have about two months of operational funding available at any time.
Uncertainty and frustration dominate the difficult decisions area school districts are having to make when it comes to developing next year's budgets.
In special session, the Texas House passed early Friday morning a bill that would slash school financing by about $4 billion during the next two years.
Rep. Geanie Morrison, R-Victoria, voted against the bill, which included both revenue-generating measures and the school finance cuts.
Her chief of staff, Justin Unruh, said the negative aspects of the cuts outweighed its cost-saving measures.
"She opposed the school finance portion of the bill because it didn't provide equity in the funding, especially when it came down to smaller districts," Unruh said.
The bill will go to a House-Senate conference committee that will negotiate a final bill with SB 1, which has already cleared the Senate.
Sen. Glenn Hegar, whose district includes much of the Crossroads, voted in favor of that bill.
"The initial cuts to education funding proposed at the beginning of session were unacceptable to my colleagues and I in the Senate, and we fought very hard to get money added back to education funding in the state's budget. I am pleased to say we were largely successful in that endeavor," he wrote in an email.
Superintendents have said they hope a final bill is on the horizon, so they are able to plug concrete numbers into next year's budget.
"It's in the middle of June, and we are still in wait-and-see mode," said Diane Boyett, Victoria school district's communication specialist. "We're not much further along than we were in January. The only thing is, it's narrowing the scope of the cut a little bit."
Interviews with several area superintendents revealed most districts are in the same boat, treading in the same uncertain waters. Districts have followed the legislature closely, cutting - some more drastically than others - and anticipating a range of budget cuts, anywhere from 5 to 12 percent.
The most recent House bill hints toward the state enforcing a 6 percent across-the-board cut for the first year. For the second year, there could be a tiered system of cutting district funding based on a complicated formula that has been controversial, not necessarily along party lines, but among urban and rural areas, Unruh said.
The formula is part of what's called the target revenue system, which funds districts based on factors like attendance, cost of living, local property taxes and size. A district's target revenue is used to calculate the total revenue the district can earn from state and local sources. The state makes up for what the district cannot make in local property taxes to reach that number.
The system, enacted as an equity measure in 2006, results in Texas school districts receiving a varied amount of per-student state aid.
That means per-student state aid ranges from a baseline of less than $5,000 to $13,000 a year, depending on the district and varying according to a student's needs. For example, Goliad school district was found to need a minimum of $6,833 per student, while Victoria needs $4,964 - numbers that were determined and frozen by the formula in 2006.
Still other districts, like Calhoun County, Goliad and Refugio, are required to contribute to the "Robin Hood" system, which essentially recaptures the tax money raised by wealthier districts to distribute to districts with lower property values. Calhoun County Superintendent Billy Wiggins said his district returned almost $8 million to the "Robin Hood" system.
It's a complicated system with several variables still up for grabs in Austin. Whenever a final bill is passed, it will be valid until 2013, at which time a new legislature is expected to delve again into the state's school finance system.
Unruh said there will be an interim committee that will look into creating equity for Texas schools, a priority Hegar backed as well.
"We want to look at the target revenue because that's put a lot of inequity into the system," Unruh said.
In the meantime, local school districts have been preparing for the best and worst of what can come out of the budget cuts.
The people: 13,830 students; 2,100 employees
Last year's budget: $99.55 million
Per-student money (TARGET REVENUE): $4,966
Expected cuts: $4.9 million is anticipated to be the worst-case scenario
Federal money (EDUCATION JOBS FUND): $2.2 million
Reserve fund (FUND BALANCE): $14.7 million, with about $2 million already designated.
The district is mindful about going too deep into the fund balance because it could lead to having to borrow money. In at least four or five years, the district has not used the reserve funds to balance the budget, which has led to significant savings on interest and better bond rates, Boyett said.
Tax plans: The district does not have current plans to raise the tax rate. VISD has not increased its levy on property taxes since 2001. "We kinda have taken the attitude in VISD that it's not our money. It's the local taxpayer's money," Boyett said.
State of the district: The Victoria school district is in the lower quarter of the state's target revenue system, making across-the-board cuts even more dollar-for-dollar detrimental to the district. The current bill does not offer funding for any future enrollment increases, and it's yet to be seen if the district will be reimbursed for its about 200-student enrollment increase last year.
The district has implemented year-long expense-cutting measures, like disallowing microwaves and refrigerators in classrooms. In the last school year, that saved the school $92,000 in electricity costs, half of which was returned to the schools themselves.
VISD has also saved money by eliminating positions through attrition and re-assigning job duties to current employees.
The district is hoping its efforts will help them avoid layoffs and prevent them from completely cutting programs.
The people: 845 students; 132 employees
Last year's budget: $6.7 million
Per-student money: $5,019
Expected cuts: $536,000
Federal money: $172,638
Reserve fund: $4.5 million
Interim Superintendent Delores Warnell said she does not support dipping into the district's fund balance. "I'm going to do everything in my power so that we don't have to do that," she said.
Tax plans: No plans to increase taxes
State of the district: Bloomington school district has prepared for an 8 percent cut in its budget. Through attrition, the district reduced its staff by eight people. Warnell said the school has been staff-heavy for a few years due to decreased enrollment.
The district has cut stipends by about 10 percent, re-configured bus routes and altered athletic schedules to include less tournament travel. Bloomington ISD is also conducting energy efficiency surveys.
The people: 4,227 students; more than 600 employees
Last year's budget: $35 million, minus an $800,000 deficit
Per-student money: $5,626
Expected cuts: Between $1.75 and $2.5 million
Federal money: $717,548
Reserve fund: $20 million, with about $3 million designated
Because Calhoun County is on the Gulf, the district keeps a large deductible for insurance in its fund balance, should a storm occur. The district works off its fund balance until tax money comes in, and it has about $3 million already reserved for much-needed updates to the high school building, constructed in 1968.
Tax plans: The district would have to take the issue of a tax levy increase to voters, and it does not plan on doing that. The "Robin Hood" system would recapture some of the money raised by taxes, Superintendent Billy Wiggins said.
State of the district: When Wiggins became superintendent in January, the school was operating on an $800,000 deficit. Calhoun County ISD has already cut about 7.5 percent of its budget. It has cut the band program at Seadrift, but offered those students the opportunity to attend the band program at other campuses. The school board closed down Point Comfort Elementary School, saving an estimated $600,000. The district has cut about 50 positions and 25 paraprofessionals.
"We had some really quality people who lost their jobs as a result of finances," Wiggins said. "It's possible that we can absorb some of those people who we cut back into our system over time."
The people: 1,400 students; almost 200 employees
Last year's budget: $12 million
Per-student money: $5,931
Expected cuts: About $1 million
Federal money: $260,896
Reserve fund: $9 million, with $4 million committed to building a new high school.
The voters approved a bond for the new high school, so that money will not come from the state fund. "I've got a wonderful, courageous board that said we're willing to dip into the fund balance for 2011-12," Superintendent Bob Wells said.
Tax plans: Edna ISD is at its tax ceiling and doesn't plan on asking voters to raise it
State of the district: The district offered a retirement incentive to its employees, which 18 people accepted. Edna ISD has so far saved about $400,000 from attrition, and it's cutting supply and travel budgets to minimize the amount the district will take from its fund balance.
Wells said he would have supported the state dipping into its fund balance instead of placing the burden on local districts. "Schools are such an integral part of the community, and we're not only hurting opportunities for kids, we're hurting our community," Wells said.
The district does not plan to eliminate any programs.
The people: 1,375 students; 235 employees
Last year's budget: $15.6 million
Per-student money: $6,833
Expected cuts: $800,000 to $1 million
Federal money: $255,842
Reserve fund: $3.2 million
Superintendent Christy Paulsgrove said if necessary, the district may use its fund balance to help with a budget shortage.
Tax plans: Paulsgrove said the school board is looking at raising the tax levy the maximum 2 cents allowed by law.
State of the district: Goliad ISD has eliminated some positions through attrition, including the assistant superintendent for curriculum and instruction, who resigned to accept another job. The board will discuss funding programs at it next board meeting.
"Depending on how things turn out, we may be hiring back some of the people we let go, if there are funds there," Paulsgrove said.
The people: 726 students; 134 employees
Last year's budget: $9 million
Per-student money: $5,956
Expected cuts: From $540,000 to $1.08 million
Federal money: $162,653
Reserve fund: $2.5 million
Superintendent Jack Gaskins said he's aware the district can't make a habit of dipping into its fund balance, but said the district may have no choice, depending on how much is cut from its budget.
"If it comes down to using part of the fund balance in order to offer our kids a quality education, then yes," he supports using the balance, he said.
Tax plans: The Refugio ISD school board has proposed a tax increase of 13 cents, which requires voter approval. Residents will vote Aug. 20 on the levy which could bring as much as $500,000 to the district, Gaskins said.
State of the district: Refugio ISD has cut spending through retirement, attrition and a few layoffs. The district has cut its supply budgets 15 to 20 percent in every area and has made cuts to all travel budgets.
"We're just going to make due next year with less. I mean, that's what we do. We tighten our belt," Gaskins said. "But the state should not be balancing this budget hole on the back of the local school district."
The people: 1,567 students; 250 employees
Last year's budget: About $15 million
Per-student money: $5,081
Expected cuts: From $500,000 to 1 million
Federal money: $282,936
Reserve fund: About $3.5 million
Tax plans: Any possible tax levy change will depend on appraisal values. "We're very sensitive toward the taxes," Superintendent Tom Kelley said.
State of the district: The district has not chosen to cut staff members, but its absorbing positions where it can. Yoakum ISD does not plan to cut programs. Kelley said it's preparing for any changes that might come with a new district accountability system. "We're going to try to keep everything in tact," Kelley said. "I just want to wait and see what happens."
Yoakum's enrollment increased about 100 students over the last two years, and growth may no longer be funded by the state.
Cuero ISD's superintendent, Henry Lind and Hallettsville ISD's superintendent, Jo Ann Bludau, were out of town and unable to provide details for their districts.
Sources: Superintendents provided most of the district information. The federal Education Jobs Fund information and the districts included in the "Robin Hood" system were provided by the Texas Education Agency. The per-student money amounts, or target revenues, were derived from www.whatsyournumbertx.com, a campaign started to bring attention to the school finance system