Even after lawmakers passed a historic $11.6 billion school finance package in 2019, superintendents worried about the funding’s long-term sustainability, cautioning that an economic downturn could jeopardize the new money. The downturn arrived sooner than most expected, in the form of coronavirus-related shutdowns that have rattled the Texas economy.
Widespread business closures and hundreds of thousands of unemployment claims will undoubtedly affect the State’s finances, putting in jeopardy the future sustainability of teacher pay raises and the additional funding allocated for every Texas student that was included in the 2019 legislation.
“If you look back just a month ago, Texas economy was doing very strong,” Comptroller Glenn Hegar said during a Texas Tribune virtual event April 1. “And then unfortunately the global pandemic came to the United States and came to Texas and double that with unfortunately a Saudi-Russia oil war, price war. … We’ve entered into a recession at this time period.”
San Antonio school district leaders are bracing for the economic impact of coronavirus, beginning to budget conservatively or searching for alternative revenue to cover costs associated with the switch to remote and online learning. School districts start their financial year in July or September and will begin the budgeting process in the coming months under a cloud of looming financial woes.
“My fear is that the State won’t have enough money even to get us through next year,” San Antonio ISD Superintendent Pedro Martinez said. “This year they are protecting our [funding], but at some point they are going to have to come back together and look at how much revenue is left in the biennium. And we have another school year in the biennium.”
In SAISD, the uncertainty means limiting the amount of premium pay offered to employees still reporting to work in person. Trustees explored the issue Monday night after members of the San Antonio Alliance of Teachers and Support Personnel asked for those still coming into work to receive time-and-a-half pay, back-dated to March 16 when the first round of coronavirus-related campus closures went into effect.
The superintendent cautioned trustees, saying that much back pay would amount to several million dollars. He worried the district couldn’t afford the retroactive paychecks amid the economic downturn.
Complicating the issue for SAISD are additional expenditures the district made to transition to remote learning and offer meal pickups to students. SAISD spent close to $8 million on devices such as laptops, Wi-Fi hotspots, food supplies, and instructional materials. Some spending, about $7.1 million, could be reimbursed from a future bond issue if voters approve.
SAISD officials also are seeking philanthropic and grant aid. Trustee Debra Guerrero encouraged her fellow board members to ask friends or family to donate to the SAISD Foundation’s Connect Campaign.
Ultimately, trustees authorized Martinez to award premium pay for the onsite employees, but no specific pay rate was determined and trustees left it open to reconsider retroactive pay in the future.
Meanwhile, trustees in Northside ISD, San Antonio’s largest and Texas’ fourth largest school district, broached similar fiscal concerns when Superintendent Brian Woods told board members the district might have to scale back previous expansion plans for full-day prekindergarten.
The original plan would cost Northside ISD $8.7 million to expand full-day programming to 16 campuses pay for full day pre-K currently funded by Pre-K 4 SA, the City taxpayer-supported pre-K program. On Tuesday, district staff presented three options that scaled back the expansion by several campuses. The most conservative option, costing about $5 million less than the original plan, would expand full day pre-K to one campus and still fund the five Pre-K 4 SA sites.
Woods cautioned board members that the same budgeting conversation would need to be had for other expansion plans.
“It’s all going to be based on what we think we might be able to afford given the economy of the state going forward,” he said, adding that for now the district will take the most conservative approach and adjust if the financial forecast changes.
San Antonio State Rep. Diego Bernal, who serves as the House Public Education Committee’s vice chair, acknowledged Wednesday that the coronavirus’ economic fallout will mean budget cuts.
“Will there be cuts? Of course,” he said. “Can we be smarter and strategic about it? Is there some room to maneuver? I actually believe so.”
He hopes the situation will not be a repeat of 2011, when lawmakers cut $5.4 billion from public school funding in 2011 because of a post-recession shortfall, spurring layoffs and increasing class sizes.
Bernal, who played a major role in the passage of House Bill 3 that awarded billions more in funding to school districts around the state, expressed hope that the most significant elements of the bill could be preserved.
He singled out the new money included in the basic allotment for every student, funding for teacher pay incentive programs, the process the State uses to measure and fund poverty, and full day pre-K for 4-year-olds as items to guard from any cuts.
A large portion of House Bill 3 went toward property tax relief, allowing local districts to lower their property tax rates by a few cents because the State committed to investing more money. Bernal said that this could be an area that the State could look at if cuts are necessary, adding that the relief decreased the average homeowners’ bill by a few hundred dollars annually.
“We can preserve a lot of the gains we make on public education if you scale back on this so-called property tax relief, which really doesn’t do much,” Bernal said. “For most people, if someone’s about to get gentrified out of their home, that $150 is not going to be the thing that makes or breaks that experience.”
Still, Bernal recognized that the financial impact of the coronavirus shutdown was changing daily and its lasting impact won’t be known for some time.
“It could be really, really bad, or it can be something we never imagined,” he said. “And I’m hoping it’s just really, really bad.”
