Schools fear loss of millions of dollars in state funding
Districts unsure; fate of ‘hold harmless’ policy now is with Legislature
Beginning last summer, school districts across Texas took comfort in knowing they would not lose state funding despite having fewer students in classrooms as a result of the pandemic.
The “hold harmless” guarantee from the Texas Education Agency was a lifeline for districts during a school year marked by unprecedented enrollment losses.
But the commitment expired around the start of the new year. Now, superintendents fear they could lose millions of dollars in state funding if the TEA decides not to reinstate the “hold harmless” policy.
Texas Education Commissioner Mike Morath has made clear that rules adopted last year to shore up school funding during the pandemic were temporary and that it is now up to the Legislature to decide how to move forward.
Superintendents say they aren’t sure what to expect, given the state’s own budget gap and the persistence of the pandemic.
“We’re all a little nervous,” said Sean Maika, superintendent of North East Independent School District, whose enrollment this year is about 5 percent less than projected. “It would be nice — it would be a huge relief — to myself and to my staff if we knew (the guarantee) was going to extend onward so we could build some cohesive plans for kids.”
Attendance takes a hit
School leaders are looking ahead to next fall, trying to plan the coming school year. But they’re in the dark as to how the state will determine their
funding and whether the TEA will continue to include remote learners in districts’ average daily attendance, a figure that dictates state aid.
Across Texas, average daily attendance has taken a hit this school year. Some students have not been able to keep up with remote learning. Others lacked the necessary technology at home. And some have had to take jobs to help support their families, superintendents say.
Texas public schools have seen their enrollment drop 3 percent on average. Most of the loss has been in prekindergarten and kindergarten, TEA data shows.
Enrollment losses could cost Bexar County school districts about $85 million in state funding during the spring semester alone if “hold harmless” is not renewed, according to a letter to Morath and Gov. Greg Abbott from the Bexar County Education Coalition, which includes 17 superintendents.
“Losing millions of dollars in funding while our students, families and schools have greater needs would be catastrophic,” said the letter, sent in December. “We believe that our fiscally responsible schools, with stable funding, will be critical to the recovery.”
Rene Barajas, deputy superintendent for business and finance at Northside ISD — the largest school district in Bexar County, with more than 100,000 students — said the district is making plans on the assumption that “hold harmless” will not be renewed.
Northside ISD has lost 4,663 students since last school year — a decline of about 4 percent — but administrators expect that the district will be able to absorb any funding losses, Barajas said.
“Personally, I’m not expecting any more funding in the next biennium,” he said. “We’re just going to have to, as an organization, adjust very, very quickly. I think we’re still nimble enough to make those course corrections to not impact instruction or our students or teachers.”
Grounds for optimism
Some other school leaders express tempered optimism that state funding will continue to be based on previous years’ enrollment figures. They cite a smallerthan-expected state budget gap, the passage of the federal government’s second stimulus package and support from some key decision-makers at the state level.
Over the summer, state Comptroller Glenn Hegar projected a state budget deficit of about $4.6 billion. He lowered that estimate significantly, to $950 million, at the start of the legislative session this month.
In December, Congress approved a $900 billion stimulus that included more than $5 billion for Texas public schools.
And Texas House Speaker Dade Phelan, a Beaumont Republican, has been vocal in his support for school funding.
“The hole that the Legislature has to dig out of for this current biennium is much smaller than we thought it would be and much more manageable,” Clark Ealy, superintendent of Schertz-cibolouniversal City ISD, told the district’s board of trustees during their meeting last Tuesday. “We’re cautiously optimistic this will be a good session and provide some really good leadership for public schools.”
Maika said he thinks the Legislature will find a way to maintain school funding, but with so much uncertainty, districts have had to take precautionary steps such as leaving some vacant positions open, cutting programming or preparing to lay off staff if state funding cuts do materialize. “We knew the pandemic would have some impacts ... so we adopted a conservative budget, which allowed us to be as prepared as you could be based on what we knew at that moment,” Maika said.
North East ISD, which has about 3,300 fewer students this year than administrators projected, is at risk of losing about $11 million in state funding this year after spending about $8.8 million on pandemic-related expenses, Maika said.
Partnerships to the rescue
School partnerships under Senate Bill 1882, which allots additional state dollars to schools that contract with outside partners such as nonprofits and colleges, will become even more valuable now that so much uncertainty surrounds the “hold harmless” guarantee, said Eduardo Hernandez, superintendent of Edgewood ISD.
The district, the poorest in Bexar County, has lost about 600 students since last school year, a decline of about 6 percent.
Edgewood ISD has the secondmost SB 1882 partnerships in the county, trailing only San Antonio ISD, and it has more planned for the coming school year. Income from existing partnerships will help offset costs on campuses that do not have outside partners, softening the blow of any state funding cuts, Hernandez said.
“That’s why the 1882 partnerships have been so important,” he said. “With any partners that we would bring on, we’ve had those conversations, that we would leverage the power of both parties to help our schools.”
Superintendents say funding for the next two years must be maintained at pre-pandemic levels to avoid draining fund balances and cutting staff positions. For most districts, the likelihood of such measures is low, at least for the current school year.
But if schools do not get the money they need soon, the state will be setting them up for harmful cuts in 2022, Maika said.
“This doesn’t just end now,” Maika said. “This continues on through next year.”
As lawmakers develop a plan for school funding, superintendents hope they will consider districts’ need to make up the ground lost by students whose education was disrupted by the pandemic.
“I’m concerned about how much learning loss has happened with students, and if they’re going to cut funding to us, how are we going to respond to those types of things?” Maika said. “To have less money doesn’t help you respond to a greater need.”