School district envisions tighter times
Decision by Texas Supreme Court on education funding surprises local leaders
When the Texas Supreme Court upheld Texas’ public school finance system as constitutional May 13, Fort Bend ISD’s Chief Financial Officer Steven Bassett knew he had his work cut out for him.
The decision ended a fiveyear lawsuit in which Fort Bend ISD was the title plaintiff seeking to change how Texas funds public schools. The district was hoping for a decision that provided monetary relief as the district endures financial strain from the oil downturn, Bassett said.
Instead, as Bassett looks ahead to 2018 and beyond, he’ll have to review district expenditures with greater scrutiny than before.
That could mean slowing expansion of a program intended to help the district’s most vulnerable students through multifaceted services including meals, tutoring and afterschool child care and activities and by providing their teachers with additional training.
Oil downturn’s impact
Before the Supreme Court’s ruling, Bassett had already planned the 2016-17 and the 2017-18 budgets without depending on any additional
money that might result from a favorable ruling in the lawsuit.
In the 2015-16 school year, Fort Bend ISD will have an estimated $7.2 million surplus. Its operating expenditures are estimated to be $578 million this year.
But because of the oil downturn, the property value growth rate dropped for the first time since 2009, from 15 percent in 2015 to an expected 11 percent for 2016.
As such, the district’s average revenue per student dropped by 1.3 percent as well; so Bassett will dip into savings from this year to cover an anticipated $2.3 million budget deficit for the 2016-17 school year.
That isn’t much in the context of the spending plan, given that the proposed 2016-17 budget is more than $590 million, Bassett said. And the district has funds set aside to make up for budget deficits in later school years.
But use of reserve funds will need to be coupled with more conservative spending, Bassett added.
So, some programs might not get as much funding as anticipated, including the Educators Dedicated to Growing Excellence effort to increase student achievement at campuses in which many students are from low-income families.
In the fall, Fort Bend ISD will launch EDGE at two pilot elementary schools, Briargate and Ridgemont.
The program at each campus will cost $2 million, half of which the district expects to cover through grants and half of which will come out of its general fund.
Briargate and Ridgemont are the only district elementary schools not to make state standards during the 2014-15 school year.
The schools are two of 10 campuses district officials have said could benefit from the program.
Assuming EDGE is successful at Briargate and Ridgemont, the plan would be to expand to other campuses, Superintendent Charles Dupre told trustees in February.
EDGE will continue despite the Texas Supreme Court’s ruling. But unless something changes, expanding programs with costs like EDGE’s to more campuses might not be realistic, Bassett said.
“If we want to expand EDGE, we may have to potentially cut other programs,” Bassett said. “Or, we may not be able to expand EDGE as quickly as we would like.”
And while the proposed budget keeps healthcare premiums for district employees the same as previous years to keep Fort Bend ISD competitive with surrounding districts and the private sector, holding the line on that policy might be difficult past 2018 if something doesn’t change, Bassett said.
Shock at decision
Like other Texas public school districts, Fort Bend ISD still hasn’t recovered from cuts the Texas Legislature made in 2011, Bassett said.
“We’re providing good services to our stakeholders, but the funding level is still less than before,” Bassett said.
The cuts, plus the state’s rising academic standards, prompted Fort Bend ISD and 83 other districts to sue the state. They alleged the system for funding public education wasn’t equitable or adequate, that formulas that determine how much money from the state each district gets were antiquated and that the state was overly dependent on local property taxes for school funding.
The Texas Supreme Court ruled May 13 that the state’s funding system, though deeply flawed, was constitutional. In addition to finding the funding formula equitable and adequate, the court determined that the state formula’s dependence on local property tax did not in effect result in a statewide property tax.
“That’s what I’m most surprised about — that they still found the formula constitutional in that regard,” Bassett said. “Because it really is a statewide property tax.”
The funding formula would have been unconstitutional if the court had seen it as resulting in a statewide tax, which would require voter approval.
Now, the only hope for school funding to change is through the Legislature, which will reconvene in January, said David Thompson, an attorney that represented Fort Bend ISD’s group of 84 districts suing the state.
“I think every district in the state ought to be thinking about the conversations it’s going to have with our senators and representatives immediately,” said Thompson, a partner at Thompson & Horton LLP law firm. “If we really do have high expectations for all students, then we need a funding system designed to support high expectations.”
In a letter to parents published on the district’s website, Fort Bend ISD Superintendent Charles Dupre said he didn’t think school finance would change soon.
“We anticipated that lower projected revenues for the state will mean that other needs will be prioritized ahead of school finance improvements,” Dupre said in the letter.
Bassett has been working with other CFOs of public school districts to come up with a simplified school formula to present to legislators. Fort Bend ISD officials plan to contact local legislators to encourage them to improve the funding formula, district spokesperson Amanda Bubela said.
District trustee Jim Rice plans to speak out on the issue as a member of an education committee advising state Rep Rick Miller, R-Sugar Land.
“We have to continue to advocate on behalf of our kids,” Rice said.
Fort Bend ISD’s 201617 budget is scheduled for approval during a regular board meeting on June 20. A budget hearing will be at 5:30 p.m. June 6 at the Fort Bend ISD Administration Building, 16431 Lexington Blvd. in Sugar Land.