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2008: Area schools hoping Legislature fixes funding formulas
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| Spring Branch ISD began revamping and rebuilding facilities in 2008 as part of its $597 million bond program. Here, superintendent Duncan Klussmann (right) talks with board president Susan Kellner and trustee Mike Falick at the November groundbreaking for Hollibrook Elementary, the first school to be rebuilt with bond funds. Ground was broken on a new Westwood Elementary in December. |
By NORM ROWLAND
All eyes will be on Austin when the 81st Texas Legislature convenes this month to see if the state lawmakers can do something to avert the funding “trainwreck” predicted by Spring Branch ISD Superintendent Duncan Klussmann.
Klussmann warned last spring that every school district in Texas will become insolvent within seven years unless the Legislature fixes the glitch in the state’s public school funding formula.
The funding system adopted by the 79th Legislature during its third special session robs local districts of normal growth revenue, leaving them no way to cope with naturally occurring rising costs, Klussmann says.
“This doesn’t just affect Spring Branch,” he said. “It affects all of Texas’ 1033 school districts.”
Since the Legislature froze the amount of revenue per student that districts may raise locally at the amount raised in 2006-’07, many districts, including SBISD and Houston ISD, are being forced to dip into reserve funds to make up deficits, he said.
SBISD’s budget for fiscal year 2008, which ended June 30, ran about $11 million in the red and preliminary projections for FY 2009 forecast a $10 million deficit.
At the same time, the value of taxable property in Spring Branch ISD has continued to increase – 7.2 percent in FY 2007 and 10.4 percent in FY 2008. Values were expected to increase by 7 percent in FY 2009, although the nationwide financial crisis has made all predictions suspect.
“People think the additional revenue raised as a result of increased value remains in the local district but that’s not true,” Klussmann said. “It goes to the state.”
The loss of revenue from growth leaves school districts with only two ways to raise additional revenue for the general operating budget: 4 cents, called super pennies not subject to Chapter 41 recapture, which SBISD has taken advantage of, and up to 13 cents that may be adopted only if local voters approve in a rollback election. Part of that revenue would be subject to recapture for sharing with poorer districts.
Spring Branch ISD’s top two legislative priorities are an overhaul of the state’s current funding system, including the elimination of Chapter 41.
Chapter 41 requires districts whose revenue from property taxes exceeds $319,000 per student to “reduce” their wealth to that figure. In plain language, that means sending enough locally paid tax money to the state to bring the amount retained down to the state’s “equalization” figure of $319,000 per student. The payment to the state is called “recapture.”
SBISD’s 2009 budget estimates that $19 million of the $259 million expected to be collected from local property taxes will be sent to the state as “recapture” payments. That’s an increase of about $7 million from 2007.
The trustees believe that the funding system needs to provide a way for local districts to meet cost increases caused by inflation, growth and changes in student demographics.
In addition, they said, the system should permit local districts to raise taxes, with voter approval, for local enrichment programs.
Klussmann warned last spring that every school district in Texas will become insolvent within seven years unless the Legislature fixes the glitch in the state’s public school funding formula.
The funding system adopted by the 79th Legislature during its third special session robs local districts of normal growth revenue, leaving them no way to cope with naturally occurring rising costs, Klussmann says.
“This doesn’t just affect Spring Branch,” he said. “It affects all of Texas’ 1033 school districts.”
Since the Legislature froze the amount of revenue per student that districts may raise locally at the amount raised in 2006-’07, many districts, including SBISD and Houston ISD, are being forced to dip into reserve funds to make up deficits, he said.
SBISD’s budget for fiscal year 2008, which ended June 30, ran about $11 million in the red and preliminary projections for FY 2009 forecast a $10 million deficit.
At the same time, the value of taxable property in Spring Branch ISD has continued to increase – 7.2 percent in FY 2007 and 10.4 percent in FY 2008. Values were expected to increase by 7 percent in FY 2009, although the nationwide financial crisis has made all predictions suspect.
“People think the additional revenue raised as a result of increased value remains in the local district but that’s not true,” Klussmann said. “It goes to the state.”
The loss of revenue from growth leaves school districts with only two ways to raise additional revenue for the general operating budget: 4 cents, called super pennies not subject to Chapter 41 recapture, which SBISD has taken advantage of, and up to 13 cents that may be adopted only if local voters approve in a rollback election. Part of that revenue would be subject to recapture for sharing with poorer districts.
Spring Branch ISD’s top two legislative priorities are an overhaul of the state’s current funding system, including the elimination of Chapter 41.
Chapter 41 requires districts whose revenue from property taxes exceeds $319,000 per student to “reduce” their wealth to that figure. In plain language, that means sending enough locally paid tax money to the state to bring the amount retained down to the state’s “equalization” figure of $319,000 per student. The payment to the state is called “recapture.”
SBISD’s 2009 budget estimates that $19 million of the $259 million expected to be collected from local property taxes will be sent to the state as “recapture” payments. That’s an increase of about $7 million from 2007.
The trustees believe that the funding system needs to provide a way for local districts to meet cost increases caused by inflation, growth and changes in student demographics.
In addition, they said, the system should permit local districts to raise taxes, with voter approval, for local enrichment programs.
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