Time has expired on a state-imposed grace period that kept school funding steady for many districts during pandemic-era disruptions.
Now they stand to lose millions if the Legislature or the Texas Education Agency doesn’t act to keep funding whole. But school leaders worry neither is rushing to help.
“It looks like they’re all kind of pointing at each other,” Sunnyvale ISD Superintendent Doug Williams said. “Someone’s got to address it. If not, schools are going to be faced with some incredibly tough choices. We need additional funds and we’ve got to keep our buildings open and we need to keep our people working.”
School leaders say addressing the gap is urgent since the state largely funds schools based on how many students show up for class each day. But enrollment has dipped 3% statewide because of the coronavirus pandemic with some areas hit harder than others, according to recently released state data.
The Texas Education Agency created an 18-week “hold harmless” period that kept money flowing to districts at the same rate as last school year even if the pandemic impacted attendance.
Now legislators and school leaders have called for an extension of that grace period. In December, 82 Texas House members wrote to Education Commissioner Mike Morath asking him to hold district funding steady for the remainder of the 2020-21 school year.
“Our school districts need full funding so they can continue to focus on student learning and mental health, employing and retaining staff to maintain programs, and keeping everyone healthy and safe,” the lawmakers wrote.
Previously when the expiration of the period approached, the agency extended it by several weeks. But when the end of the 18 weeks approached, no extension came. For some districts that started instruction earlier in the summer, this deadline came before the holiday break. In Dallas ISD, administrators delayed the start of the school year, pushing back the end of the district’s first 18 weeks of instruction until Jan. 29.
School leaders have taken this silence to mean that TEA officials are hoping lawmakers will act during the current legislative session. It is unlikely that they would resolve the issue in the session’s early months. But even the lawmakers who wrote to Morath say the responsibility to fix it is on the state agency. In their letter, they asked Morath and the agency he oversees to extend the period.
When asked who is responsible for extending the grace period or if an extension is being considered, TEA officials responded with a statement: No final decision has been made regarding a possible extension to the hold-harmless framework.
Dallas ISD Superintendent Michael Hinojosa said it is clear that Morath — who is a former DISD trustee — has the sole authority to do it but won’t do so if it means sidestepping the governor, lieutenant governor or speaker of the House.
“Ultimately, it’s the leadership’s call,” Hinojosa said. “But we’ve asked him. We’ve begged him. And he’s listened. He’s told us — he’s been very clear — even though he has the authority on paper, he can’t execute it without support from the leadership.”
Meanwhile, enrollment losses are spurring some tough financial planning.
Dallas ISD, the state’s second largest school district, stands to lose between $15 million and $20 million should the hold-harmless provision not be extended. The district can dip into reserves if need be, but Hinojosa said the matter is urgent.
Not all districts are at risk of losing millions, but any funds lost can be detrimental for students, school leaders said. Sunnyvale ISD, a small district that enrolled about 1,950 students last year, lost about 40 kids in this school year.
That’s about a 2% drop in enrollment or a $320,000 budget loss. Budget cuts are hard to grapple with and it isn’t easy to just eliminate a position, Williams said. Plus, the cost of education has only increased in recent months.
“We’re running multiple bus routes and trying to keep kids socially distanced on buses. We’re running midday routes because we are providing half-day instruction for kids,” Williams said.
On an opposite edge of Dallas County, Cedar Hill ISD also expects a large funding hit as a result of the grace period’s termination. The district stands to lose $1 million based on current projections but that could climb if enrollment drops further.
“In addition to state funding, the district is experiencing other local revenue pressure as a result of less earnings in investment returns, food service operations and other local sources such as rentals and athletic gate receipts,” said Gilberto Prado, the district’s chief financial officer.
Nearby, Mesquite officials estimate the school district could lose about $2.5 million. Pete Pape, assistant superintendent for business services, said Mesquite ISD budgeted conservatively so the district can withstand the loss, but it still means money intended for students won’t reach them.
“We have to help our kids get caught up because a lot of our students … have fallen really behind,” Pape said. Mesquite could use the money tied to the hold-harmless provision to help them, he said.
Pulling from savings helps but isn’t a permanent solution, nor is it one all Texas districts can rely on, said Edd Bigbee, chief financial officer for Duncanville ISD. And Bigbee — like others across the state — is bracing for the pandemic to get worse before it gets better.
Duncanville school leaders worry that second-semester enrollment will be lower than the first, which could open up the district to more funding loss. Coronavirus cases have continued to climb after the holidays and in the early days of 2021. On Tuesday, Dallas County recorded a single-day record of 3,549 cases and 14 additional deaths. More than 30,000 Texans have died from the virus.
TEA officials did not answer a question from The Dallas Morning News about how the agency is advising districts facing financial troubles.
There’s an urgent need to resolve the funding issue now, school leaders told The News.
As months pass with no definitive answer on the grace period, districts are left to wonder if they need to make budget cuts. And with fewer months remaining in the school year, there are only so many places to save.
“You’re really late in the year to talk about cuts,” Williams said. “You can lay off people, and you really don’t want to do that. If you start laying off people, then it only goes to the unemployment problem that Texas has. Hopefully, they won’t be short-sighted from the standpoint of requiring school districts to make some of those decisions to lay people off.”
Staff writer Corbett Smith contributed to this report.
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The DMN Education Lab deepens the coverage and conversation about urgent education issues critical to the future of North Texas.
The DMN Education Lab is a community-funded journalism initiative, with support from The Beck Group, Bobby and Lottye Lyle, The Communities Foundation of Texas, The Dallas Foundation, Dallas Regional Chamber, Deedie Rose, The Meadows Foundation, Solutions Journalism Network, Southern Methodist University and Todd A. Williams Family Foundation. The Dallas Morning News retains full editorial control of the Education Lab’s journalism.