Challenging times prompt coming together for solutions
April 22, 2011 at 7 p.m.
Updated April 21, 2011 at 11:22 p.m.
The immense budget hole facing state lawmakers today is a structural deficit problem and not solely the result of a struggling economy. State lawmakers would have us believe that the current budget crisis was unforeseen and a direct result of decreased sales tax revenues and symptomatic of a weak economy in general. In reality, the true cause of the current funding hole is the result of deliberate action that state lawmakers took back in 2006, which has now come back to haunt them.
Factually, back in 2006, the Texas Legislature mandated that all local school district property taxes be rolled back or "compressed" to no more than $1 per $100 of property valuation. Further, the Legislature also assured school districts and local taxpayers that revenue generated by the state's business tax would make up the loss in local tax revenues at the newly-required lower tax rate.
Unfortunately, since its inception, the legislative plan for financing schools through business taxes has not brought in the revenue that was predicted. In fact, back in 2006, then Comptroller for the state of Texas, Carole Keeton Strayhorn, warned Gov. Rick Perry that the plan was flawed and that he and the legislators were writing "the largest hot check in Texas history."
She went on to predict that within five years, the finance plan would be billions of dollars short of the needed revenue to fund our public schools. Sadly, now five years later, we see that the former state comptroller was accurate in her predictions. The 2006 Legislature set up a structure for financing our public schools that was flawed from the start as it never had an ample revenue stream backing it.
Today, April 2011, Refugio ISD, just like all the public schools in Texas, has to deal with the structural deficit issue purposefully created five years ago. Last month, I sat and listened to Sen. Florence Shapiro of Plano, as she spoke to a gathering of school superintendents and school board members. She warned the group that the "perfect storm" was headed for Texas' public schools (referring to the deep cuts in funding that are being promised) and that we as school and community leaders would be "making difficult, painful decisions and choices" over the coming months. Indeed.
Refugio ISD has recently made some of those painful and difficult decisions. With payroll costs making up some 66 percent of our annual operating budget, we were forced to reduce our workforce and find some savings within our payroll budget. As of last week, the somber task of notifying 10 teachers and one administrator of the elimination of their positions has been completed. In addition, three non-teaching positions have been eliminated because of budget cuts. Along with these payroll cuts, the district is also studying some $300,000 in other cost-cutting measures such as reducing benefit packages, reducing supply budgets and eliminating some programs. The district is looking at every aspect of its operations to see what cost saving actions can be implemented as we prepare for a significant loss in state funding.
Finally, in order to make up some of the $1.5 million in revenue that we are predicted to lose each of the next two years, RISD trustees are studying the feasibility of asking the voters of this school district to allow the district to maximize its taxable revenue by increasing property taxes to the $1.17 cap.
If the voters were to approve such action, RISD will net approximately $530,603 in additional revenue next year (based on current appraised values). With a proposed tax rate of $1.17, a home valued at $50,000 would see an increase of $65 in taxes for the year. A home valued at $100,000 would see an increase of $130. Those whose taxable values are "frozen" due to being over the age of 65, a veteran, or a disabled community member, would see an increase based upon their frozen taxable values.
To ask taxpayers to increase their tax obligation is certainly not something that we desire to do. However, it is a move that will garner desperately needed funds for the district during these times when the state of Texas is not fulfilling its obligations to fully-fund its share of public education. Another disturbing development in Austin at this time is some language within Senate Bill 12, currently being studied by the Senate Education Committee. According to the newsletter Capitol Watch Alert (April 13 issue) published by the Texas Association of School Administrators, this bill includes some language which indicates that Texas lawmakers are considering forcing public schools to look at "options for managing the district's available resources, including consideration of a tax rate increase and use of the district's available fund balance." In short, the Legislature is contemplating doing less for our public schools while legally forcing taxpayers to pick up the tab.
These are certainly challenging times economically for the nation, for this great state, and for our community. Regardless of political party affiliation, we are being called upon to come together and find ways to cut costs, trim budgets and spending habits, and adequately fund our local schools. I ask for your prayers as we work to meet these challenges in the coming weeks, and I solicit your input, your comments and your proposals for how Refugio ISD can cut costs and raise much-needed revenue.
Jack Gaskins is the Refugio school district superintendent.