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Refugio taxpayers facing double-whammy from state
by Jack Gaskins Refugio ISD
Feb 10, 2011 | 672 views | 0 0 comments | 7 7 recommendations | email to a friend | print
Last week, Texas Education Commissioner Robert Scott told an audience of school superintendents and other public school leaders that the current session of the 82nd Texas legislature would be “the most difficult legislative session facing public education in my lifetime.”

Scott went on to label the current budget crisis facing the state, and subsequently public education, as a “problem” and one that must be solved. Simply calling the budget situation a “problem” is not giving full weight to the magnitude of the potential impact that the state’s revenue deficit could have on Texas’ public schools.

The “problem” as Scott calls it, was officially made public a few weeks ago when State Comptroller Susan Combs announced that the 82nd Legislature has approximately $72.2 billion dollars with which to create a balanced budget for the next biennium.

This amount is estimated to be $27 billion less than what is needed to maintain current state agency services at current levels.

With such a massive projected deficit facing Texas lawmakers, all state agencies have been warned that cuts in funding are inevitable. What we do not know, and may not accurately know until late June, is just how severe those cuts will be.

So, the “problem”, which carries a whopping $27 billion price tag, looms large. At the present time no one in Austin is prepared to give any sort of statement as to which state interests will suffer the greatest losses.

Meanwhile, public schools, like all other state agencies, are being forced to prepare operating budgets without any certainty of how much money will be appropriated to fund those budgets. That is a “problem.”

This “problem” actually began back in 2005 when the state legislature forced all school districts to reduce their local tax rates and then further handicapped local districts by placing a cap on local tax rates.

Since 2005 schools have been unable to raise revenue to meet ever-increasing indirect costs such as fuel, utilities, insurance rates and grocery prices.

To add to the disparate situation, while revenues are capped by the state, and while expenses continue to increase each year, the state adds to the local burden numerous unfunded mandates such as steroid testing of athletes, required training of employees in an assortment of non-instructional services, and a bevy of required notices, documents and public hearings that must be made available in a variety of formats.

These are not the only extra expenses dumped upon local tax payers by the state, but they suffice as examples of what is driving the “problem”: revenue capped at 2005-06 levels while annual expenses continue to rise.

Another “problem” is that in 2009 the state accepted some $3.3 billion in federal “stimulus” money.

The funds from Washington D.C. came with a cadre of restrictions, caveats and reporting strings attached. These funds stimulated numerous headaches and bouts of confusion if nothing else.

Schools were forced to take the funds and to wade through the burdensome, time-consuming accounting and reporting requirements. Public schools have never been allowed to replace or “supplant” state or local monies with federal funds. We have always been strictly held to a “supplement only” standard.

We are forced to prove that we do not allow federal funds to take the place of any local or state money but rather that the

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federal funds are added to existing monies in an effort to enrich a program or service.

Part of the “problem” lies in the fact that the state pulled off the biggest supplanting job ever when, back in 2009, it accepted the federal stimulus dollars, and used those dollars to take the place of more than $3 billion in state funds normally flowed to public schools.

What local school districts are still forbidden from doing–supplanting funds–state lawmakers did and now that those stimulus funds are expiring on Aug.31, the hole that is left in the state’s coffers will be filled by local tax payers.

In addition, school districts were required to pass along a portion of the federal stimulus money to classroom teachers in the form of a pay raise. Teachers deserve a pay raise.

No doubt about it; they deserve much more than they ever get. However, the stimulus-money -forced pay raise was only funded for two school years. Now, as we all knew would be the case, those mandatory pay raises will become the burden of the local tax payer.

The 82nd legislature has neither the plans nor the means to replace the extinct stimulus funds with state revenue. That is a big “problem.”

So, how does the “problem” being debated in Austin affect your local school?

Refugio ISD currently runs an annual operating budget of $9.2 million. State aid makes up approximately 20 percent of the RISD budget while local taxes and local non-tax revenue sources comprise the remaining 80 percent.

One “problem” is that the state limits how much we can raise in local revenue but expects local revenues to pay for a disproportionate share of the budgeted expenses.

If recent funding scenarios coming from various school finance experts in Austin are to be believed, Refugio ISD could be facing a revenue shortfall of anywhere between $485,000 to $1.7 million for each of the next two years.

One reason for the wide range in these estimates is that, on top of all the other school finance complexities, Refugio ISD is considered a “property wealthy school district” under current law.

Due to our local oil and gas resources, our district is considered rich and must hand over to the state a portion of our tax revenues each year. This devious little provision of the state’s school finance law adds insult upon injury.

Refugio ISD cannot raise more revenue due to the cap put in place back in 2005-06. If the oil and gas industries experience a good year and the district realizes more revenue, then state aid is decreased and Refugio ISD has to send Austin any “excess” revenue.

So, the projections for 2011-12 are concerning because of the double-whammy effect: we will likely owe more to the state in wealth equalization payments while simultaneously also receiving less state aid. That is a doubly-big “problem.”

Finally, Scott gave a slight bit of hope to the school leaders he was addressing last week. He said that he believes the budget fiasco will improve – not be as bad as currently reported to be – by the time the 82nd legislative bodies finalize their budgetary wrangling.

That is some good news, but still the $27 billion question remains: How can a district begin to create a balanced budget not knowing how much revenue is going to be missing?

I believe that it is time for the members of the 82nd Legislature to use a portion of the state’s “Rainy Day Fund” to help fill the gaping hole in the budgetary coffers – a hole created in part by the downturn in the economy and partially by the state’s own hand when it accepted federal stimulus funds two years ago knowing full well that those funds were only temporary. If what we are now facing does not constitute a “rainy day,” then what does?

Additionally, it is time for the lawmakers of this great state to adequately fund any mandates placed upon a school district, and it is time to allow local taxpayers to keep the revenues they raise locally.

If the budgets presented by the Texas House and the Texas Senate end up slashing as much money from the state’s budget as is being suggested, then local communities across this state will see schools cutting programs and services, increasing class sizes, and contributing to the rise in local unemployment.

Yes, there is a huge “problem” in Austin right now.

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