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Monday, March 07, 2011

Study: State funding cuts will hit South Texas school districts hard

By Jesse Bertron | Rio Grande Guardian
February 15, 2011

AUSTIN, Feb. 15 - As the legislative session heats up in Austin, legislators are grappling with some numbers that are starting to make South Texas public schools blanch.

In a recent study, school finance gurus Moak, Casey, and Associates claimed that Brownsville, La Joya, PSJA, and Edinburg ISDs, could lose a combined $140 million per year under the House’s proposed budget.

The study lays out three potential scenarios: The most gruesome for South Texas is a 15 percent across-the-board cut of general operating expenses for schools, which the study predicts could result in cuts of more than $50 million to Brownsville ISD, $30 million to La Joya ISD, $33 million to PSJA ISD, and $34 million to Edinburg ISD.

These are the four biggest school districts in the Valley. Overall, school districts in the Texas Education Agency's Region 1, which covers the Rio Grande Valley and Laredo, face state budget cuts of anywhere from $305.4 million to $418.6 million, the Moak Casey study predicts.

These figures explain why groups like Valley Interfaith and the Equal Voice for America's Families network are calling on state legislators to produce a more "balanced" budget than HB 1, with increased taxes, a closing of tax loopholes, and use of the $9 billion Rainy Day Fund.

“I’m telling school districts, ‘I really believe that’s a worst-case scenario’,” said state Rep. Ryan Guillen, the lone Valley lawmaker on the House Committee on Public Education, referring to the Moak Casy study. Guillen, a Democrat from Rio Grande City, said that school districts would be using the study’s numbers to help with hiring decisions in the face of a mid-April deadline for offering contracts to teachers.

State Rep. René Oliveira, D-Brownsville, though, said the numbers could be even worse than what Moak Casey projects. While warning that the numbers presented by the study are “a range, not a specific outcome,” Oliveira cautioned that, “Districts need to realize that the worst case scenario from Moak, Casey may not actually be the worst case scenario. Depending on how the new formulas work, especially if we continue to overprotect property wealthy district and small-sized districts, individual districts could be harmed more than the Moak, Casey estimates.”

Martin Peña, executive director of the South Texas Association of Schools, said that although he expects the final Senate and House budgets to have smaller cuts in education funding, the figures from Moak, Casey and Associates are probably the best guide currently available.

“If I’m going to use anybody’s educated estimates, I’m going to use this firm,” said Peña. “There’s nobody else that does what they do, and they’ve got so much experience and knowledge.”

In order to understand the numbers presented by the study, Peña explained, some recent Texas history is required.

“The districts, in 2006, were required to lower their taxes by one third,” Peña. “But, the State told districts, ‘You’re going to receive at least the same amount of money that you’re now getting per student’.”

A new business margins tax was introduced to compensate for the school property tax. But the margins tax has underperformed, leaving the state short of money.

So, said Peña, since the State ends up paying districts a certain amount per student in order to maintain those 2006 funding levels, “that’s money that the districts are being sent because their tax collections, being that they’re one third less, don’t bring in enough money, so they write a check out to the districts for the difference.”

That check is called Available State Aid for Tax Reduction (ASATR), and it lies at the center of what Moak, Casey, and Associates predict might happen this session.

In addition to an analysis of a 15 percent cut in school budgets, the study lays out two other potential money-saving measures the state could take. First, Texas could eliminate the ASATR, dropping school funding well below the 2006 mark.

This would result in estimated budget cuts of more than $31 million for Brownsville, cuts of more than $22 million for Edinburg, cuts of more than $18 million for La Joya, and cuts of more than $20 million for PSJA.

The final option as outlined by Moak, Casey, and Associates, is that ASATR would be prorated: the school districts with the lowest property taxes per student would get the most ASATR funding. Said Peña: “That’s the one where [The Valley] will be cut the least.”

“Let me give you an example. If you look at San Isidro and McAllen, San Isidro has—their total property values in San Isidro are much lower than McAllen. But per pupil, they’re considerably higher. Because you divide it by the number of students you have. [The prorated ASATR] would look at that, and because they would look at that, it would cut our schools the least.”

The prorated ASATR plan would also help to lower the total needing to be cut, Peña said.

“If you take money away from these districts up here at the top, that’ll bring down that $5 billion. Instead of looking for $5 billion in cuts, you might be looking for $4.5 billion in cuts,” Peña said.

“Under this proposal, [Brownsville ISD] would still be cut. Fifteen million is a lot of cut. That’s a lot of people. But that’s not near as much as [the other two proposed options].”

Under this option, Edinburg ISD would also lose more than $18 million, La Joya more than $7 million and PSJA more than $11 million.

One thing everybody agrees on is that this funding crisis will prompt a long, hard look at current school finance laws, Oliveira told the Guardian.

“First, we must recognize that maintaining current law requires $9.8 billion dollars more than the base budget appropriates. We did not add any new money for the 80,000 new school children that enroll every year. We didn't appropriate money to make up for the drop in local school district property values. We did not replace the $3.3 billion in federal stimulus money we spent last session. We also didn't cover the $1.4 billion of accounting tricks used to increase education spending in the last budget,” Rep. Oliveira said.

“The funding levels in the base budget assume, and in fact probably require, a new school finance system. The current formulas simply do not work with the amounts of money appropriated in the bill.”

State Sen. Eddie Lucio, Jr., the Valley’s only legislator on the Senate Finance Committee’s subcommittee on public education funding, agreed that current school finance laws, at least as they are currently enforced, are inadequate. The panel began meeting on Monday, hearing complex testimony from experts across the state.

“School finance is complicated, but the truth is simple,” Lucio said. “The Legislature has historically short changed Texas schools. What was confirmed today is that the current school finance system is a band-aid fix that has little to do with the actual cost of educating students.”

But, said Rep. Guillen, the funding crisis also opens up the possibility for progress.

“There’s going to be great challenges to figure [the budget] out. We’ve got to keep in mind equity; we’ve got to keep in mind those hard-to-teach kids out there when we do this. But I also think, when we do this, even though we’re expecting less money, I think we’ve got some opportunity to increase equity and to do things that we haven’t been able to do in the past.”

Editor's Note: This story has been revised from the original posting to reflect new information from Rep. Oliveira's office.

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