Friday, June 12, 2015

Fast-growing Texas school districts lament double whammy

Not a good situation for the more than 30 high-growth districts:

Of the $1.5 billion extra public education funding included in the 2016-17 budget, only $103 million is for campus construction — about how much it would cost to build one high-end high school.
We are jeopardizing so many children's futures as a consequence.


By Kiah Collier - American-Statesman Staff

In the wake of this year’s legislative session, officials from fast-growing Central Texas school districts are invoking visions of extremely overcrowded classrooms and endless rows of portable buildings while criticizing state lawmakers for what they see as a continued dismissal of local control.
They are lamenting yet another failed attempt to get the Legislature to allow at least some of the districts to exceed a state limit on debt service so they can build more schools to house an influx of new students — and are complaining of a double whammy of sorts.
While state lawmakers overwhelmingly rejected a bill that would have given districts more latitude to exceed that cap, they almost unanimously passed another that all but prohibits a controversial form of borrowing many districts have employed to avoid busting the cap.
As the state population has boomed and public education funding has dwindled, the number of districts statewide that have hit that 50-cent-per-$100-valuation tax rate limit – set in 1991 – has grown from zero in 2003 to more than 30 in recent years.
School officials describe the cap as both arbitrary and unnecessary given that they still are required to win approval from local voters before building additional campuses.
The problem is particularly prominent in areas such as Liberty Hill in Williamson County where there is more residential growth than commercial development, which brings more tax value, and growth is outpacing finances. In that tiny but growing town, the lone school district desperately needs an elementary school, but it can’t ask voters to pay for one because its debt service tax rate is already at 49 cents.
Of all the issues facing the district, “it’s one that keeps me up at night more than anything else,” said Superintendent Rob Hart. “We’re getting very crowded.”
An unsuccessful bill by state Rep. Eddie Rodriguez, D-Austin, would have allowed Liberty Hill and more than a dozen other school districts that have hit or are nearing the debt service limit to exceed it by 10 cents as long as they met certain criteria, including demonstrating that it would save them money on interest in the long run. (Many districts have chosen longer-term bonds, which helps them stay below the cap but can result in millions more dollars in interest payments).
The measure was a much watered-down version of legislation that has failed before.
“Let us untie the hands of fast-growth districts,” Rodriguez said last month before the House overwhelmingly rejected his House Bill 506. A similar Senate bill by Sen. Juan “Chuy” Hinojosa, D-McAllen, never even got a public hearing in committee.
Meanwhile, the Legislature overwhelmingly approved a bill that will — if it escapes a gubernatorial veto — prohibit school districts from using controversial capital appreciation bonds to build schools, something districts like Leander’s have done to skirt the debt limit. The controversial bonds delay payments for decades and can end up costing districts tens of times as much as they originally borrowed.
State Rep. Dan Flynn, author of House Bill 114, emphasized the state — through its Bond Guarantee Program — is on the hook for all bonds issued by school districts and charter schools and might have already overcommitted itself.
“We have a concern there that we’ve actually guaranteed more than we have funds for,” the Canton Republican said at a March public hearing. “I think we have a responsibility to be sure that this is brought to the public’s view.”
The Fast Growth School Coalition ended up supporting Flynn’s bill in lieu of another — carried by Hinojosa in the Senate — that would’ve banned the use of the bonds entirely. The group advocates for about 85 districts that are taking on the vast majority of new student enrollment.
Still, coalition Executive Director Michelle Smith said some districts now are “faced with the reality of being at almost 50 cents and not being able to use more (capital appreciation bonds), and the kids are still coming.”
“I don’t see anybody really talking about solutions … as to where they’re going to put these new kids in the next 10 to 15 years if they’re not able to build anymore,” she said. “Either the state can provide support for facilities or local taxpayers can provide support for facilities.”
Smith noted that state lawmakers did increase facilities funding this session, albeit modestly.
Of the $1.5 billion extra public education funding included in the 2016-17 budget, only $103 million is for campus construction — about how much it would cost to build one high-end high school.
Michael McKie, superintendent of the Hays Consolidated Independent School District, sees the whole situation as an attack on local control.
“Because (House Bill) 506 didn’t pass what it does is it doesn’t allow your local communities, your citizens of your local ISDs to make a local decision regarding, one, the amount of debt they want to acquire and, two, whether or not to approve a bond,” he said. “We have to be accountable to our school communities — every ISD does.”
McKie admitted the situation is forcing his district — also close to the 50-cent limit — to focus more than ever on paying down its existing debt so it may eventually build another elementary and high school. But he said the district would have been doing that, anyway.
“We wouldn’t have philosophically changed anything,” he said. “On the flip side, if your growth is exceeding your financial capacity because of the amount of debt you’re having to take on because of growth — then what?”

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