State and local revenue declines cast a dark shadow over the future of school funding

But hints of sunshine give us reason to fight to Fund Our Future

There’s no getting around the doomy picture painted recently by economists and state officials tracking the state and local budget pictures for now and next year. Wonks who follow the money flow are predicting a state budget deficit in the billions and possibly the worst in history, and a hole dramatically deeper than the Great Depression. The gloom, of course, is fueled by the massive unemployment rate and related loss of revenue from low-spending levels and business closings, since Texas relies heavily on sales tax and oil and gas revenue.

With that backdrop, Gov. Greg Abbott at the helm of the Legislative Budget Board directed all agencies to alter their budget for the upcoming year (September through August 2021) with 5% reductions in planned expenditures.

Exempted from the edict are certain agencies that are obviously crucial during the pandemic, e.g., the Texas Department of Health Services and the Texas Workforce Commission. The Permanent School Fund, which provides a majority of public education funding from the state’s piece of the pie, also is exempt from these provisions, but that by no means indicates that our schools won’t be protected from cuts down the road. Public education funding is a massive portion of the state budget, hovering around two-thirds of all expenditures. And with some 80,000 students entering Texas schools each year, not funding this enrollment growth alone in the coming years is a gargantuan cut in itself. Coupling that possibility with local property tax revenue declines and you have a recipe for deep cuts, possible layoffs, and larger class sizes.

Now that you’ve heard the gloom, here are some reasons to keep fighting for our students. Many state elected officials have openly declared that our investments in public education need to continue. School funding is already set through the next school year, so most of the significant decisions by local districts on cuts would be made next spring. And the Legislature has more than $8 billion in the Rainy Day Fund to spend on avoiding some cuts.

Unfortunately, the governor stressed for higher education institutions to “engage in prudent fiscal management efforts” (as if they weren’t already), and our public and colleges also fall under the 5% budget reduction mandate. Higher education has taken the brunt of the cuts in the past, so we need to focus our attention on maintaining our investments in higher ed as well.

A $3 trillion aid package passed by the U.S. House last week would provide significant relief to states, local governments, and school districts. However, Senate Republicans have put consideration of the measure on hold.