School Finance

The Checks in the Mail!

1. Q. Is it true that the formulas are designed in such a way that when the federal money goes away, state money will pick up the difference (in 2011 and beyond)?
A. Yes. The state’s Foundation School Program (FSP) formulas will not change after the state no longer has stimulus funding. The FSP formulas will continue to form the basis of school districts’ FSP entitlements.
This is the first question asked and answered on the TEA Stimulus FAQ document. If you are to read the question and then just look at the answer “Yes”, it appears that the financial problems for Texas Public School District are over. The State of Texas will step up to the plate and maintain the funding levels established with Federal Stimulus funds. For White Oak ISD, that would mean an increase of more than $600,000.00 per year in state funds. This would truly be a cause for celebration if you don’t take the time to read the rest of the answer. In short, if the formulas do not change, the amount of money a district receives from the state does not change. My interpretation of this is White Oak ISD is $600,000.00 short beginning in 2011 and beyond.
At the August Special Called Board meeting to adopt the 2009/2010 Budget and set the tax rate, we chose to adopt a budget without the stimulus money included. Our budget shortfall was $425,000.00. I then explained to the board that for the next two years we have a chance to balance the budget with Federal Stimulus dollars. I did not want the members of the board to think that everything was OK during the time when stimulus money was available and then think we tanked the budget “post stimulus”. Our deficit budget represents the district operating on Foundation School Program Formulas. I will not mislead the trustees and community members into a false since of confidence that we are financially sound. If you are thinking you have all this extra money coming to your district in 2011, the checks in the mail!
On September 23, 2009, Senator Kevin Eltife spoke to a regional meeting of Economic Development Corporation members. During the conversation, he gave his view on the Stimulus Funds at the state level. Senator Eltife expressed his concern that when the stimulus funds are gone, Texas will experience a 13 Billion Dollar shortfall that will create problems in the next Biennium. While he was speaking my thoughts went to the question of the money promised to White Oak ISD. If the state is going to be down 13 billion, there is a good chance WOISD will not receive extra funds in 2011 and beyond. I did get a chance to ask Senator Eltife about money for school districts post stimulus and he did not see how more could be done with less. If you still think the state will continue to fund your district at the higher level, the check is still in the mail!
Finally, my thoughts go back to the past legislative session. The fight for a system to fund education with dynamic driver based formulas died in the Senate Education Committee chaired by Senator Shapiro. One of the most powerful arguments against SB 982 was the extra 5 Billion Dollars it would cost the state. The powers that be could not support such a large sum of money for the betterment of Education Funding in the state. The decision was made to keep the system of Target Revenue in place and to mandate pay raises that would consume far more than half of any extra money allotted to districts. I had the opportunity to testify before the Senate Education Committee and to let them know White Oak ISD was a deficit budget district before HB 3646 and will be a deficit budget district after HB 3646 even with the passing of a Tax Rate Election to add 13 cents to the burden of our local tax payers. HB 3646 passed and I was right.
The Texas Legislature could not/would not come up with 5 billion dollars to make the necessary changes needed in school finance during the last legislative session. The Texas Legislature will not make the changes needed to come up with sufficient funds to keep school districts at stimulus funding levels in 2011 and beyond. For those of you that still believe the state will maintain your district at the higher funding level, I’m sorry to say there is no check in the mail. My final thought is simply this, don’t count until you see it and don’t spend it until it is in the bank.

One thought on “School Finance

  1. Gilbert,
    Your posting is very well written and I would have to agree that things are going to be tough in the next biennium. We better “buckle-up” because even if the check is in the mail, we all know what is happening with the US postal service!

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