In Texas, state government funds school districts based on the number of students enrolled who receive instruction each day. Typically, that means the more students sitting in class, the more money flowing to school districts.
But what happens if some students don’t return to campus this fall because they fear contracting the coronavirus? That’s a big question for many school districts currently engaged in the budgeting process: trying to estimate how many students the State will count as present and how much money will be disbursed.
North East Independent School District polled parents and students for input on whether kids felt safe returning to campus in 2020-21. About 20 percent of respondents said they were uncertain about next fall.
At a Monday night school board meeting, Superintendent Sean Maika posed the question: What happens if 20 percent – about 13,000 NEISD students – don’t return in the fall? What if they want to keep learning from home?
“What we don’t know is will [the Texas Education Agency] fund us for that,” Maika said, suggesting that the way Texas historically counted attendance doesn’t necessarily jive with the new learning models brought about by the coronavirus-related school closures.
In recent weeks, TEA officials told districts they wouldn’t have to take attendance because of the unprecedented campus closures. Funding remained in line with previous years’ attendance rates and school districts stayed financially stable. Next year could present new challenges, NEISD leaders said.
TEA officials assured districts there were adequate funds to sustain 2019-20 revenues and said cuts for 2020-21 aren’t anticipated. However, Brian Moy, NEISD’s executive director of finance and accounting, recalled a time when the state agency had to resort to a practice called proration to deal with budget deficits.
Proration can occur when financial circumstances change after lawmakers approve a two-year state budget and Texas doesn’t have enough money to fund all the approved expenses. Should the economic downturn worsen, Moy said he feared the State would resort to proration and reduce revenue for school districts statewide.
SAISD Superintendent Pedro Martinez spoke more confidently about next year’s funding at a meeting Wednesday night. He told his school district board that if enrollment remained stable, funding would, too.
If Moy’s fears are valid, however, proration would mean less money coming into districts and a tighter budget. A TEA document posted on May 21 said proration won’t occur for 2019-20.
“However, significant economic uncertainty remains, and the size of the decline in state revenues relative to what was estimated in the Appropriations Act because of COVID-19 is currently unknown,” the document stated. “Given the supplementation of funds from [federal coronavirus relief legislation] and reductions in actual vs. expected spending, TEA does not currently project a need for proration. However, the facts could change over the coming year.”
Federal funding from the legislation will provide some support to a financially ailing state in two ways.
The first comes in the form of a coronavirus relief fund, which will help reimburse up to 75 percent of distance learning costs. For NEISD, this equates to $7.9 million.
San Antonio ISD leaders identified about $9.1 million in eligible COVID-19 related expenses, meaning $6.8 million could be reimbursed. SAISD’s applicable costs include $233,000 in extra pay for employees required to work on campus while schools were closed, $264,000 for sprayers and cleaning supplies for district facilities, and $6.1 million for Chromebooks for students without adequate technology.
To cover the 25 percent that won’t be reimbursed, SAISD’s nonprofit foundation launched the Connect Campaign. To date, the organization has raised more than $800,000.
The rules and application process for reimbursement are still pending.
A second relief fund, the Elementary and Secondary School Emergency Relief Fund, or ESSER, will provide additional relief. TEA plans to use this $1.3 billion infusion to supplant state funding, meaning the money will cover the gaps that developed from the economic downturn. It will not be used to provide additional money to districts that wasn’t already expected.
San Antonio ISD will receive $21.2 million, the most of any local school district. The amount of funding was determined based on how many students qualify for compensatory education funding, money that helps support students at risk of dropping out of school. A list of how much money will go to each school district can be found here.
Texas lawmakers have options for alternate funding to tap into before cutting money to school districts. When legislators passed the 2019-21 biennium budget, they left about $2.9 billion unappropriated. Revenue could drop by that amount and the State could still break even, the NEISD finance official said.
The State will also tap the $1.3 billion in ESSER funding to supplant state funds, and Texas lawmakers could save about $2 billion by moving an August state payment to schools to September, Moy said.
“There are pots of money to keep this biennium whole,” Moy said. “The next biennium, that’s different. It’s impossible to know the funding situation.”
Texas Commissioner of Education Mike Morath warned districts to not add significant expenditures to their budgets, Maika said, recalling a conference call with other school district superintendents. He advised his board that the planned budget for 2020-21 should be conservative.
School districts rely on state funding for only a portion of their revenue. Districts also count on property taxes. Property values were set as of Jan. 1, so the pandemic won’t change them. However, collections could be affected if property owners can no longer afford the taxes.
“It’s kind of like the wild, wild West out there,” Maika said, characterizing the coronavirus pandemic’s effect on schools. “This isn’t anything we’ve ever encountered.”
Boards from both NEISD and SAISD plan to approve their budgets in June, likely before final details are known about how the pandemic will impact state funding or property tax collection.
Other school systems also are taking a conservative approach. IDEA Public Schools, Texas’ largest charter network, held a budget workshop on Tuesday where board members discussed ways to cut expenses should enrollment dip.
Suggestions included suspending the bonus pool, reducing the number of principals in residence, and eliminating the flex teachers program.