School finance experts does computer runs on budget cut implications based on several funding models
Financial consultants estimate the $10 billion shortfall in the baseline House budget could mean a loss of between 80,000 to 100,000 jobs in districts across the state.
Proposed cuts on this scale to education in the budget are unprecedented, said financial consultant Lynn Moak. State leaders have never, at least over the last 60 years, started with a baseline budget that fails to fund the Texas Education Agency’s legislative appropriations request, or LAR, which is pegged at funding the cost of current law.
“For eight months now, we’ve been waiting for the Legislature to say where they are,” said Moak of Moak Casey & Associates this morning. “Where they are, they finally told us, is at a starting point where we’re cutting $10 billion out of school districts.”
That $10 billion is just the dip in funding to school districts, which can be tied to a combination of revenue shortfalls, a choice not to fund 170,000 in projected student growth and a decision not to fill the gap caused by stimulus funding.
Moak Casey’s initial school funding numbers run, which was sent out to its clients this morning, puts the losses at roughly two to three times what most school districts had predicted. One of the largest urban districts in the state, for instance, was slated to lose up to $200 million, per year, under initial runs.
Moak said it was the first time, in his memory, that lawmakers chose to start with a baseline that had reneged on legislative commitments. Last session, stimulus funding was used for a teacher pay raise, and that pay raise was codified in law. Now stimulus funding is not being replaced, potentially leaving a billion-dollar ongoing un-funded mandate for school districts to handle within their own budgets.
“They had a 60-year commitment to public education, and by not funding at the minimum, at the base formulas, they’ve failed to meet that commitment,” Moak said. “We’ve never done that. We didn’t do that in 2003 when they had a $10 billion funding crisis. That’s what makes this crisis different for public education.”
Even during the two years of pro-ration of education funding during the 1990s, school districts were funded at the baseline budget. It was only during the course of the biennium that it became clear that funding would not be sufficient.
And, by the way, that $10 billion shortfall doesn’t even include the cuts within the agency, which has decimated much of the priority agenda for the current administration, including teacher incentive pay and the pre-kindergarten grant program, intended to fund districts above formula funding levels.
Some have speculated that such a drastic cut in funding would require new funding formulas. That’s not necessarily true, but the question about how funding will be cut to school districts is still an open one.
Moak Casey has done three runs for school districts: one that shows proration, based on property tax values within each district and which would be a temporary cut that would have to be restored to school districts next biennium; a second option that addresses cutting target revenue, a solution that appears to be favored within the Senate by Sen. Steve Ogden and Lt. Gov David Dewhurst; and a third that applies across-the-board cuts, an option that no one seems to like.
And, to complicate the picture even more, $830 million in federal edujobs money still remains in limbo. In whatever way the House and Senate tinker with education funding and its formulas, its proportion within the budget must remain the same or the state will end up forfeiting its chance to apply for the money, post-budget approval.
How this all plays out equitably, especially given the greater needs of high-growth school districts, is still a question mark. There’s also a fourth option out there for cutting that would apply an efficiency equation to state formula funding. That option, possibly contained in a bill by the two chairs of the education committees, has yet to surface is remains uncalculated in Moak Casey’s runs.
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