Some Texas school districts face cuts over loss of funding

Additional State Aid for Tax Reduction created in 2006

By Robert Arnold - Investigative Reporter

HOUSTON - As more than 1,200 school districts welcome students back for another year of education and athletics, some are being forced to tighten their fiscal belts more than others.

Some of these cutbacks are due to the expiration of a funding program called Additional State Aid for Tax Reduction, or ASATR.

“It's putting us in a bind,” said Dr. Rodney Cavness, the Texas City ISD superintendent. “It's a pretty significant hit to us -- (a) very significant hit.”

The aid program was created in 2006 when the legislature cut tax rates by a third. ASATR was created to make up the difference in revenue for school districts, essentially ensuring districts would still receive the same amount of per-student funding received during the 2005-06 school year.

Initially, the program was sold as one that would stay in place until enrollment and property tax bases grew to the point that districts no longer needed the supplemental revenue. Over the years, many districts stopped qualifying for ASATR as intended. However, in 2017, more than 250 small- to medium-sized school districts still needed the money.

In districts such as Texas City, that money can go toward a range of items.

“That would contribute to us balancing the budget and recommending raises for all our staff,” Cavness said.

In 2011, the legislature cut public education funding and repealed ASATR, effective in 2017. As of Sept. 1, ASATR funding will stop.

“We want the best for our kids, but it takes money to do that,” Cavness said. “It's bothersome to me that we even have to have this conversation. Our kids are our biggest resource.”

With ASATR gone, Texas City stands to lose about $5 million, which is roughly 6 percent of its budget. To make up for the loss, Texas City ISD's recent budget can't offer raises to staff, calls for a 10 percent cut in campus budgets, a 30 percent reduction in overtime and a 5 percent reduction in the substitute teacher budget.

Sheldon ISD in Northeast Harris County is taking a 7.2 percent hit to its budget without ASATR.

To make up the difference, the district raised tax rates $0.06, can't offer raises to staff and eliminated non-instructional positions through attrition. However, officials with Sheldon ISD said yearly enrollment increases will help take some of the sting out of the lost funding.

“In our mind, the ASATR is our money to keep in the first place,” said Dr. Greg Poole, the Barbers Hill ISD superintendent. “We are anticipating a $6 to $7 million loss this year.”

However, Barbers Hill, which is in Chambers County, has been able to avoid many of the cuts seen in other districts through aggressive tax incentives and the creation of a foundation, which has grown to $21 million since it was created seven years ago.

“What we have to do is protect ourselves from the arbitrary and capricious nature of the Legislature,” Poole said.

“So, you’re having to do these things to financially protect yourself from the Legislature?” asked Channel 2 Investigator Robert Arnold.

“It is absolutely protection,” Poole said.

Barbers Hill and Texas City are also considered “property wealthy” because of the refineries and petrochemical plants in those districts. However, this means these districts have to send millions of dollars in tax revenue back to the state as part of the “Robin Hood” finance system that subsidizes those districts unable to generate as much tax revenue.

Cavness adds his district’s budget is also tied to the changing valuations of the petrochemical plants and refineries, which, in turn, are affected by fluctuating oil and gas prices.

“The whole thing with your budget is, you got to be sustainable,” Cavness said.

There was a chance for ASATR funding to continue, but a battle between the Senate and House over school finance saw the end of the program. Cavness praised those legislatures who fought to keep the program, but hopes when the Legislature meets again in two years, it will provide schools with more financial stability.

“We need help from the Legislature in the next session,” Cavness said. “The school finance system in Texas is deeply flawed.”

Poole was blunt when it came to the Legislature.

“The Legislature, it's a mess,” he said.

At the close of the special session this week, the Legislature did pass a measure to provide a $150 million transitional grant over the next two years to school districts losing ASATR. However, the districts KPRC spoke with said the money won't be enough to avoid all the cuts mentioned.

However, each district stressed that none of those cuts will impact students' education.

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