Schools say inflation puts them at risk

To protect jobs, campuses, Texas' funding system needs to be revamped, educators say

By GARY SCHARRER
Copyright 2008 Houston Chronicle Austin Bureau

AUSTIN — The school funding system approved by Texas lawmakers two years ago provides no new money to cover rising costs — especially for fuel, utilities and health insurance — and officials warn the plan's tax revenue straightjacket will allow inflation to push some school districts into bankruptcy.

At-risk districts, generally, will find a way to make it for the next school year, but many face horror situations in a few years unless legislators dramatically change the school funding system again, and soon.

Take the Houston-area Spring Branch Independent School District. Its budget projections show the district's current $58 million reserve fund will slide $68 million into the red within four years.

Unless a fix is enacted during next year's legislative session, school districts will be faced with difficult choices, including closing campuses and firing teachers, said Mike Falick, president of the Spring Branch school board.

"It's an untenable system. No business in the world would be able to survive with fuel, health insurance and salary increases and a flat revenue source," Falick said. "It's not sustainable.

Some school districts eventually will face "insolvency, some in a shorter time than others," he said.

Humble Independent School District is about two years away from insolvency, Superintendent Guy Sconzo said. It will cover a $7 million budget deficit this year and a projected $23 million deficit next year by dipping into its $53 million reserve fund.

Humble ISD has cut spending by $17.5 million since 2002, Sconzo said, but is struggling with inflation and enrollment growth. Each new student costs the district about $6,800, but it gets only $4,937 from all sources to educate that student, he said.

"As we reduce more, we get on the road of becoming Minimum ISD. We will be able to comply and meet state laws and regulations, but we can't do anything more than that because we can't afford to," Sconzo said.

State leaders defend the current system but will consider.... Continue Reading