Crisis In The Classroom: ‘Worst Case Scenario’ Sends Districts Scrambling

By Matt Goodman, CBSDFW.COM

We created this interactive map to accompany our online and on-screen coverage of the budget shortfall’s impact on area school districts. It allows you to track how much less each school district would receive based on the first draft of the state’s budget. 

NORTH TEXAS (CBSDFW.COM) – On Jan. 18, school district officials got their first view of the preliminary state budget for 2012-2013 and noticed a gaping hole where revenue for public education is usually assigned: $9.3 billion was chopped out of it.

On a draft that rang up $31.1 billion less than the final budget that passed in the previous Legislative session, Republican lawmakers labeled it the “worst case scenario.”

This, they said, is what the budget would look like if the state’s estimated $15 billion to $27 billion budget shortfall were solved only by slicing services and taking few other avenues into account.

But it put school districts in a bind. Their budgets must be in line shortly after the Legislature approves an appropriations bill in May and teachers who will be laid off after the current school year must be told in April. As such, planning has already begun based on this “worst case scenario.”

“That’s all we can go with right now because we don’t have any other data to plan,” said Michael Hinojosa, superintendent of the Dallas Independent School District.

Hinojosa said the district – the largest in the region and second only to Houston ISD in the state – projected a shortfall that was half of what the initial budget showed.

By Hinojosa’s estimates, DISD is bracing for a more than $250 million shortfall in state revenue. Hinojosa said the district is planning on cutting 3,900 jobs, 3,000 of which will be teaching positions.

If anything, worst case or not, he said it shows lawmakers have made it a priority to close the budget shortfall primarily with cuts, meaning school districts must begin operating under what he labeled “the new reality.”

“I think there’s a new sentiment that so many people are against taxes that it is going to be hard to pass any kind of future taxes to fund education or other services,” Hinojosa said. “We were all a little bit surprised by the strength of it.”

The Foundation School Program

School districts in Texas are funded with local money from taxpayers and with revenue the state funnels into the Foundation School Program, or FSP, which is then doled out to individual districts across the state.

The FSP, according to the Texas Education Agency, “is meant to ensure that all school districts, regardless of property wealth, receive substantially equal access to similar revenue per student at similar tax efforts.”

The FSP uses a complex formula to determine how much money each district receives, as school districts in an area sporting higher property taxes will bring in more local money than others. The FSP, according to the TEA, works as an equalizer of sorts.

“Things have to be equalized because some communities can raise a lot more money with the same number of pennies on a tax rate,” Hinojosa said. “If you have no property value of significance … the state has to make up that difference.”

And in the first draft of the budget, the FSP was under-funded by $9.3 billion.

“What I tell parents and what I tell school officials is just to take a deep breath,” said Lt. Gov. David Dewhurst. “We’re not going to know exactly what our budget is for our public schools until late April or May.”

“I don’t believe we’re going to see the Draconian measures that a lot of school districts are talking about now,” he added.

How did we get here?

Educators and lawmakers place a chunk of the blame on what many refer to as a “structural deficit,” which was created in 2006 after Gov. Rick Perry and the Legislature lowered property taxes for homeowners, limiting the amount school districts could bring in locally.

This loss was supposed to be canceled out by revenue brought in by a refigured business tax, but that never caught up to the $14 billion reduction from property taxes that happened every two years as a result of the lower rate. Neither did an increase in the tax on cigarettes.

“I sat down in May of 2006 with all of our senators and said, ‘it doesn’t balance,’” Dewhurst said. “When we cut local school property taxes for homeowners and businesses by $7.1 billion a year … contrary to what’s being reported, this new business tax is not going to offset. We are going to create a structural shortfall.”

Dewhurst said his fears came true – “Regrettably, I was right,” he added – but the state will eventually “grow out of it,” since the economy is bouncing back after the crippling recession.

Possible solutions

Lawmakers on either side of the aisle agree, though, that there are many options on the table that could soften the blow to public education. The first many legislators reference is the Rainy Day fund, a $9.5 billion reserve the state can vote to use to help in a bind.

The reserve, which is primarily funded by natural gas and oil tax reserves and refills over time, requires a three-fifths vote to funnel money from. Dewhurst said the state must “go agency to agency, program to program,” and weigh which are most important to Texas residents before deciding to pull from the Rainy Day fund.

Other legislators are more outspoken with their desire to use the reserves.

“I am a firm believer in that we ought to be using the rainy day fund,” said Sen. Florence Shapiro (R- Plano). “I believe at least half. So now we’ve cut (into the $9.3 billion) dramatically.”

Shapiro, who is chairwoman of the Education Committee, also said the state should analyze each agency before taking any major measures and – remember – this is only the first draft of the budget.

“You have Sen. Shapiro on education saying she doesn’t want to see this, she doesn’t want to see that,” said Rep. Lon Burnam (D – Fort Worth). “The reality is we’re going to see vastly increased classroom sizes. The reality is we’re going to see layoffs in all the school districts.”

Fort Worth ISD uses 85 percent of its $600 million budget on salaries, meaning administrators fear they’ll have to turn to layoffs to make due. They expect to see a 10 to 15 percent cut from the state, meaning a drop in revenue between $60 million and $85 million.

Arlington officials are expecting a $35 million drop in state funding, but Austin-based educational consulting firm Moak, Casey and Associates estimate that number could reach $60 million. There, teachers with fewer than three years experience could be laid off as part of an expected plan to cut 132 teaching positions.

“We’re between a rock and a hard place,” Fort Worth ISD spokesman Clint Bond said in mid-February. “The reduction in personnel will be a reality at some point but we don’t know to what extent.”

Current state mandates prohibit districts from cutting salaries, enforcing furlough days or increasing class size requirements. These are all directives that come down the mountain after the state approves them. But these are options that could save jobs, at least temporarily, and lawmakers said giving the districts power to use them would be discussed as the budget season continues.

“School districts want to see those resources made available to them and it’s understandable,” said Sen. Wendy Davis (D – Fort Worth). “Of course it makes sense if you can ask teachers to take a few furlough days versus losing their job that that’s a better alternative.”

And as the Texas Constitution requires the state provide a “free and adequate” education to all children, Burnam (D – Fort Worth) said legislators should tread lightly, especially when it comes to increasing class size.

“When it’s all said and done, every school district is going to solve its own set of problems. I assume they’re going to sue us for failure to meet our obligations,” he said. “If we’re able to adopt an appropriations bill this session, there will be lawsuits right away.”

Future of Texas public education

Currently, the graduation rate in Texas stands at 71.9 percent, according to the U.S. Department in Education, which places Texas at No. 36 in the country.

Starting in the 2011-2012 school year, Shapiro said freshmen in high school will be the first class to take the STAAR test: 12 end-of-course exams that legislators say will increase accountability of district schools. DISD superintendent Hinojosa said the tests will be “more rigorous and much more comprehensive” than the previous TAKS test.

“We’re rapidly becoming a third-world country,” Burnam said. “We have an upper class and we have a lower class, and the disparity is getting greater and greater. And many of our lower class people do not have basic access and opportunities in education.”

Burnam said that slashing pre-kindergarten programs, long-defended for their role in helping low-income and at-risk children receive early success in the classroom, and increasing class size will worsen the state’s current education standing.

“Bottom line, we’re making the decision to make worse an already horrible situation,” he said.

But Shapiro goes back to putting decisions like this in the hands of the school districts. State law currently limits the amount of children in a kindergarten to fourth grade class to 22 each. Shapiro said they might make this an average, adding that she would rather “have an outstanding teacher in a class with a 24-1 ratio than a really bad teacher teaching 15 to 1.”

“It will be a local decision with local school boards and local parents making that decision instead of a mandate from the state,” she said.

And despite this initial $9.3 billion shortfall over the next two years, she reiterated that budget talks have only just begun.

“This is not the budget you will see at the end of the day, it will be much more favorable to schools,” Shapiro said. “We would be cutting off our nose to spite our face if we did not look at education as our No. 1 priority.”


One Comment

  1. Norma Leederman says:

    I thought the lottery was brought to Texas to benefit the highways AND education, what has happened to that fund???

  2. dallasguy2034 says:

    I third would like to know about the Lottery funds. I was young, but do remember the large push to get it approved with education being the biggest buzz word. Where’s all that money we were promised??? The media really needs to check it out.

    1. garlen says:

      The lottery funds have dwindled since virtually every state has one and a lot of people don’t have the money to blow on the lottery due to the econmoy.

      1. Stop-Slick-Rick says:

        Not at all – lottery money went to education but they reduced the money from the general fund by the same amount. Lottery funds were a wash for education. They gained nothing and the public was fooled again.

        Go to for a good description of the real issues here and what you can do to stop the thieves in Austin.

  3. Nonya says:

    How many students are here unlawfully? We should weed out those who are her unlawfully and send them back to their country of origin (where ever in the world it is). That would cut down on the number of students and help with the budget shortfall.

    1. cv says:

      Because schools are funded at least partially on enrollment then that would actually make the problem worse.

  4. Mr. Miller says:

    The lottery money was dropped into a general fund, which dribbles into several other funds, including education. The state chose its words very carefully. Does the money go to education? No. Does some of the money go to education? I guess so. Speaking of money, approximately $90million is spent on the TAKS test every year. So, for the next five years, the state will spend nearly half a billion dollars on a test. Did you read the article? In terms of grad rates, we are 36th in the nation. In overall education, we are 48th. We teach to a test, but we aren’t preparing the students for the real world. Third world is right. We are falling behind. Larger class sizes prevent teachers from spending quality time with each and every student. If we can’t prepare them for that stupid test, they will fail. (Frankly, if we prepare them for that test, we will still fail as a nation.) If they fail, property values will fall. If property values fall, people will leave. This will affect everyone, folks. Not just teachers and parents. Texans will feel this. Write your legislature.

  5. connerie says:

    When lottery money started coming in, the state used it to supplant funds, not supplement them. In other words, they replaced what they were paying to education with lottery funds and then diverted that money elsewhere. Fact is, we got the lottery thanks to lobbyists. It was simply sold to us as being good for education. It’s the same reason state testing like TAKS and STAAR will never go away. The companies behind those tests have very powerful lobbies with plenty of money to dole out. Sure, that’s not how it’s being portrated to us by our lawmakers, but that’s the reality of our legislature.

  6. Stop-Slick-Rick says:

    The lottery is another example of the shell game they played with your tax money. Yes, lottery money goes to education. However, if the lottery brings in $x million each year, the budget for education is reduced by the same $x million. So, for education it was a wash.

    Sadly, a lot of people do still believe that lottery money is funding education. Ronald, I agree with you – where has the media been in all of this? I think the media shares some responsibility for not helping to inform people and should serve as a watchdog for us.

    I’m happy to see this article discuss the structural tax deficit that the legislature created in 2006. That is not something people are well educated about either and it really is the reason for this crisis. However, I disagree with legislators that say we’ll “grow out of it.” Why would I trust them now – based on the shortfall they created five years ago, math clearly isn’t their strong suit.

    You can find more information about this topic at It’s a non-partisan site that explains the funding problems facing ISDs and what you can do to help.

    1. Kimberly Davis says:

      Governor Perry has clearly lossed focused on the local issues while he is preparing for national quests of his own! First he lowers taxes knowing that the result would be less money bought in for education then when Texas had the opportunity for funds, turns them down in protest to the President, again making a judgment call that allows our children to suffer. He is clearly ignorant and then to add insult to injury running for re-election runs a campaign stating that Texas is in budget and that Washington needs to run the country like he runs Texas. REALLY?!!!!!!!!!!!!!!!!! HE IS A BLANTANT LIAR and worse where is his concern for our children and their ability to be competitive in the world today. I have seen teachers say they are willing to take less money to stop others from losing their jobs why aren’t the board members offering this?!!!!!! Starting with the Superintendents because million dollar short falls don’t happen overnight! We are not ignorant and stop playing on our intelligence.

  7. Rick McDaniel says:

    Put an enrollment tax on the parents, for what it actually costs to educate their kids, and solve the problem.

    Then they can choose where to school their children, because it will cost them, wherever they go.

  8. R Brown says:

    Here is my pitch on the school budget crisis. We lived in an older prestigious area of NW Tarrant County called Lake Country Estates at Eagle Mountain Lake. We were there throughout the 1990 until 2006 when we could no longer support our Eagle Mountain / Saginaw ISD taxes. From 1990 until 1999 the taxes when up gradually. From 1999 to 2006 our ISD taxes went from approx. $886 a year to just about $4200 a year. Around that time, we also were move kicking and screaming from Tarrant County under the loving wing of the City of Ft. Worth. Our monthly tax bill was higher than our mortgage payment. In the late 90’s the Administration spending grew at a pace of 75% while the Classroom spending increased by only 8 to 10%. We all went to the ISD meetings, but were ignored then as the next generation of parent is today. I have never yet seen the public turn an ISD’s determination to make their idiotic policies our spending. It just lip service. Administration spending is out of control. The schools we are allowing them to build are palaces, not places of learning. My children went to schools in modest school building, built for learning. Schools today are built for the ALLMIGHTY UIL Dollar. Saginaw High, built early 2000’s is the palace type of school building. Why does the school need polished marble floors, a fountain in front and a 10 million dollar press box in their football stadium? 10 million for an announcer, score keeper and spotter? Our students only need a safe, comfortable place to learn. Ever driven by a High School Stadium at night in the summer time and wondered why the stadium lights were on? It is so local children and parents can jog and walk for their fitness. Imagine what it cost to light the stadium for the hell of it. HEY, WE CAN AFFORD IT! I may not be exact on the numbers by I am damn close.

    1. Christie P says:

      I only wish they had listened to you because we would not be in an aweful financial state as we are. I, too live in the NW corner of Fort Woth, the Eagle Mountain Saginaw school district.

      Compared to Fort Worth taxes, EMS taxes are considerably higher than Fort Worth isd. I agree. Why did we build such prestige schools? What happened to “places of learning?” Who in the world is EMSisd trying to impress? Who allowed such an expense? Was it some “stupid” American who said “spend, spend, spend and we’ll worry tommorrow about what the real cost will be?” I, for one, don’t live my life that way. My car is OLD and paid off. don’t have cable, nor do I have much of a bal (couple hundred dollars) on my credit card. I only have 2 loans. my mortgage and my credit card.

      I am appalled!!!

  9. SocialStrain says:

    Six degrees of separation.

    This article illustrates imbalances in infrastructure, but fails to point out that the precedent was set in pioneer days by banks and heavily skewed mortgaging of Amercia’s future.

    All of these side-effects are natural byproducts of a very unsustainable math, and it makes baby boomer mathematicians that consult leaders that control large sums of wealth and resources, slap down a copy of Atlas Shrugged and say: history is rife with these examples of meteoric rises and falls of civilizations, so know when to hold ’em, know when to fold ’em, and know when to walk away.

    Of course we can do a better job of collapsing antiquated systems, but you may want start now with a better balanced YOU, then move on to better syncing peer systems, then propagate the more sustainable.

    A crisis of individual ethics amongst an eloquent acceptance of utter system failure? You bet.

  10. Survon1 says:

    Gosh, does this mean that the teachers will have to shut down their laptop and turn off the digital teaching aids and tv screens with dictated materials that put the kids to sleep and for a change actually have to break open a book and teach the students.

    1. Kate says:

      I’ll make a deal with you Survon1. The day you actually make your child turn OFF the TV/computer and take away their iPhone/iPad/Gameboy/Call of Duty whatever and make your chld read a book will be the day I can go back to “breaking open a book” and teaching a student. Until then, I will continue to do the best I can to hold your child’s attention by “edu-taining” them with all the fancy electronic gizmos!

      1. oestar2000 says:

        Go Kate!!!

  11. Tom says:

    People just can’t understand that there is no money available to help in this situation. Add to that the fact that we’ve been throwing money at the education problem for years with no real results. More teachers do not equil better education! The quality of the teachers might, but in this case the schools are going to let the newer teachers go rather than those who don’t produce satisfactory results. The teacher associations should advocate to keep the better teachers, but then they would have to admit that some are simply not as good as others. That is why the money doesn’t matter! We can get by fine with less teachers and larger class sizes! Of course one does have to feel some compassion for those who will be out of work at the end of all this.

  12. Central TX Teacher says:

    Friend, if you’ve never taught, please don’t disparage teachers. Until you’ve faced a room with 36 fifteen-year-olds, you can’t understand what teachers do. It’s no walk in the park, but we do it because we care about kids. Many have tried teaching and decided it required too much from them. Please show respect for those who put so much of their time and their own money into educating your kids.

  13. Elizabeth Mercer says:

    I am grateful to the teachers of this state. There is simply no way to thank these dedicated individuals for the personal time spent grading papers, calling working parents,purchasing supplies for students…. and I know all of this happens for a fact. A Texans we decided we wanted to spend less money via property taxes, and we got it! Now our children pay for it. There is money to help this situation.. called the rainy day fund. it is raining folks.

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