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

By Matt Goodman, CBSDFW.COM
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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.”

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