A trend has emerged across Bexar County’s public school landscape: students leave school districts, enrollment dips, state funding drops, and a budget shortfall remains. Now South San Antonio Independent School District forecasts it, too, will face a budget gap in the 2018-19 school year.
District officials expect South San ISD to lack about $7 million needed to fund expenditures in 2018-19. This is not a small amount for a district that only operates with a budget of $77.9 million – making the deficit a shortfall of about 9.5 percent.
To put it in context, roughly that same amount of money was budgeted for the combined expenses of guidance, counseling, and evaluation services, extracurricular activities, health services, and student transportation in 2017-18.
South San officials said the gap comes from a rapid depletion of students. In the last four years, the district has seen enrollment decline from 10,014 to 8,600. This drop represents a loss of just over 14 percent of the student body.
While some fellow superintendents point to charter schools as one reason for enrollment decline, South San Superintendent Abelardo Saavedra said that isn’t the whole story. For the first time last year, two new charter campuses opened in South San, but Saavedra said the decline in enrollment had started before that.
To recover additional revenue, the district is considering a property tax rate increase of 13 cents. This increase will add to the district’s maintenance and operations (M&O) tax rate, which contributes funding for the district’s general operations. The district also assesses a 41-cent tax rate to pay for any debt the district has incurred, known as interesting and sinking (I&S). South San’s total tax rate is $1.45 per $100.
Currently, the district taxes at a rate of $1.04 per $100 of property valuation for M&O. South San hasn’t touched this rate since the 2007-08 school year. Not adjusting the tax rate has its drawbacks – South San’s property is valued close to the lowest among its peer Bexar County districts. Only Southside, Harlandale, and Edgewood ISDs have lower property values, and all three tax at a higher rate to collect more revenue.
At a time when most districts’ property values are increasing, allowing districts to collect more in property tax revenue with the exact same tax rate, South San’s property value decreased from 2016 to 2017 to the tune of $37 million.
South San is following in the path of the three districts with a lower property value, all of which serve more than 80 percent of students who are deemed economically disadvantaged, by suggesting an M&O tax rate increase to from $1.04 to $1.17. That would bring the district’s total tax rate to $1.58.
At a meeting Tuesday night, South San officials presented a proposal to district residents with scenarios on how a tax rate increase might impact them. The district needs the buy-in of voters, because any M&O rate increase above $1.06 tax rate requires a tax ratification election, or TRE. If approved, a tax rate increase of 13 cents would bring in roughly $6.4 million in new revenue, which would come close to closing the budget shortfall.
District officials laid out how this increase would impact homeowners: a resident living in a $100,000 home would pay $8.13 more per month, and a person living in a $50,000 home would pay $2.71 per month. The district noted a TRE would not impact anyone 65 or older in the district.
If called, the election would likely take place sometime this summer, with a final board vote to authorize the election before the end of the school year.
Outside of a tax increase, Saavedra said the district’s primary option is to slash spending.
“Yes, we can do a lot of cutting, we can cut out a lot of programs,” he said.
A third option lies in enticing more students to enroll in the district. Saavedra said South San is doing a better job of offering choices to parents who would otherwise think about enrolling their children in a charter school. He gave the example of the three new middle school academies that will open at each of the district’s three middle schools next year.
Outside of that, the district blames being landlocked for its student loss. There are limited opportunities for new growth, and existing housing development isn’t always well-kept. One parent remarked that an apartment complex near her elementary school hasn’t been maintained, which has caused families to move out of the district.
Without room to build new facilities, enrollment growth is much less likely than districts like Northside ISD where plenty of undeveloped land allows for growth and new campuses, projected for the coming school years.
Where houses exist, district officials say the population is aging and not adding new students in South San’s schools.
Board trustees are working to address this specific issue. At the beginning of Tuesday’s meeting, they voted to send a letter to the City of San Antonio, asking to invest money from its housing bond in South San’s boundaries. Investment would bring new housing options, and hopefully, new families and their students that would also attract greater funding.