The state entered the 88th Legislature with nearly $33 billion in its coffers and a list of funding plans for public schooling. However, beyond a few small examples, larger funding bills have yet to materialize, said Bob Popinski, senior director of policy for Raise Your Hand Texas, a nonprofit education advocacy group.
“It was a session out of balance,” Popinski said. “It was absolutely surprising. ... All the recommendations ended up failing.”
The overview
Multiple school districts across the state are either proposing or approving budget shortfalls for the 2023-24 school year. This is due to a number of economic factors, such as inflation, which has driven up operating costs, as well as state and federal money drying up that was tied to the COVID-19 pandemic, Popinski said.
However, Conroe, Montgomery and Willis ISDs have proposed or adopted balanced budgets for the 2023-24 fiscal year. To achieve a balanced budget, officials with Conroe and Willis ISDs said they recommended foregoing staff raises this fiscal year and are offering retention incentives instead.
WISD trustees approved incentives Aug. 9 to be paid out in December, including $1,500 for teachers and professional employees, $1,000 for support and hourly employees and $500 for employees hired between September-November. Similarly, on Aug. 1, CISD approved a $1,200 or $600 stipend this fall depending on employment status.
“We’re not in a position to give teacher pay raises this year as we look at those rising prices and look at funding as a whole,” said Garrett Matej, WISD’s assistant superintendent of business and finance.
Nearly all proposals aimed at increasing school funding in the legislative session ended up on the cutting-room floor, Popinski said. Among those included proposals to increase teacher pay and the per-student allotment funding given to school districts.
For example, MISD Chief of Staff and Communications Justin Marino said House Bill 100, which didn’t pass in the regular session, would have provided additional funding for MISD. According to an analysis of the bill, it would have increased the basic allotment, among other revisions to the school finance formula.
The statewide per-student allotment, or basic allotment, sits at $6,160 and has not been increased since House Bill 3 passed in 2019, Popinski said. The state would need to add roughly $1,000 this year to the allotment to match inflation.
“An increase of the basic allotment is necessary to keep up with these rising costs and to be able to keep up with teacher pay raises and cost of living increases and things along those lines,” Matej said. “At the end of the day, the basic allotment increase would be my top priority.”
How we got here
Due to high rates of inflation in recent years—totaling about 18.5% from April 2019-April 2023, according to the Texas comptroller’s office—school districts have had trouble keeping up with rising costs of their operations.
MISD's Chief Financial Officer Ben Davidson said for example, electricity costs have increased 58% per kilowatt hour since 2021, and natural gas prices have climbed 48% in that time. At the same time, property insurance increased about $150,000 year over year—all while the district’s funding from the state per student has remained the same.
Put into perspective
While they wait for potential state action, school district officials this summer are approving new budgets—some of which are still anticipating help from the state.
“During legislative years, it’s always a challenge, and then this year was extremely challenging because we didn’t know what was going to happen, so we really just had to go on the basis of the funding we received in prior years,” Davidson said.
MISD trustees approved the budget June 27 for a July 1 fiscal year start with a $1,300 raise for those on the teacher hiring schedule and a 2% raise for all other employees, Community Impact previously reported.
In a public hearing for the 2023-24 budget Aug. 1, CISD trustees discussed challenges, such as keeping up financially with the district’s unprecedented growth, lack of funding for teacher raises and high inflation.
State funding is based on the average daily attendance, which puts districts without perfect attendance at a disadvantage to not receive the entire basic allotment.
According to CISD Chief Financial Officer Darrin Rice, the district’s attendance numbers dropped from an average 94.3% prepandemic to 92.5% in the 2022-23 school year, where it is projected to stay for 2023-24. Due to the lower attendance rate, CISD does not receive the full $6,160 basic per-student allotment from the state.
Instead, the district’s per student allotment is actually $5,790, according to Rice. Despite the lower basic student allotment, the district’s expenditures are expected to increase by $49.46 million to account for additional personnel growth, inflation adjustments and the cost of portable buildings.
Similarly, Davidson said if the basic allotment was based on enrollment instead of average daily attendance—which on average is at 95% in MISD—the district would see about 5% more, or $4 million, in state funding.
Matej said WISD would see about $5.29 million in additional state funding.
What happens next?
Although school districts are approving their budgets for the year, there is still time for the state Legislature to pass a bill on school funding and teacher pay raises by calling a special session on the topic this fall.
“With the budget surplus that the Legislature had and their stated goal of increasing salaries for educators, we are disappointed that it has not yet happened,” CISD Superintendent Curtis Null said.
In the meantime, with shortfalls and a growing need to increase teacher compensation, many districts will likely be dipping into their fund balances to make ends meet, Popinski said.
“School districts are in a pretty tough position going forward,” he said.
CISD is expected to adopt its budget and tax rate Aug. 15, while WISD is expected to adopt its budget Aug. 17, both after publication.
“I don’t think our district has ever worked as closely with [legislators] as we are now, so we remain optimistic that there will be a positive result from the special session,” Marino said.
