The state of Texas is sitting on a $33 billion surplus, and Michele Trongaard is itching to see what lawmakers do with it.
She鈥檇 prefer a decision sooner rather than later. As associate superintendent of business and finance for the 35,000-student Mansfield district in the Dallas-Fort Worth area, she鈥檚 responsible for shepherding next school year鈥檚 budget into final form by June. But she鈥檚 heard that final state budget decisions might not happen until the end of May.
In Mansfield, the fate of crucial priorities like raising teacher pay, replacing aging digital devices, and recruiting qualified staff hangs in the balance.
Still, Trongaard said of the surplus, 鈥渓et鈥檚 just say I鈥檇 rather see that than the other way.鈥�
Districts nationwide are grappling right now with cognitive dissonance.
All but one state last year collected higher-than-expected revenue, according to the National Association of State Budget Officers鈥� , as inflated costs of goods and services bolstered sales and income tax collections.
Yet it鈥檚 not a universal cause for celebration. Public officials and some economists are sounding the alarm about a possible recession, federal COVID relief dollars will expire the school year after next, and the cost of schooling is growing at a rapid clip. Also, other state priorities like tax cuts, higher education, and health care threaten to crowd out the K-12 share of the spoils.
Many district leaders and school advocates believe momentary relief from fiscal calamity represents an opportunity to make worthwhile investments that help students. And states are in a unique position to do that, as they have deeper pockets to fill gaps for low-wealth districts that can鈥檛 raise sufficient taxes on their own.
In some places, those investments are already in the works. Georgia Gov. Brian Kemp has that would provide full funding to the state鈥檚 base aid formula, raise annual pay for 200,000 teachers by $2,000, and pave the way for more school counselors. In Minnesota, lawmakers are considering to revive a universal school meal program that the federal government established temporarily when the pandemic began. The newly elected governor of Nebraska wants to to the state鈥檚 nearly 250 school districts.
But the story is less rosy elsewhere.
Iowa legislators that will allow parents to use taxpayer money for private school tuition. The program will cost the state up to $345 million a year, angering public school advocates who argue those funds would do more for K-12 schools desperate for basic resources. The Charles County district, for instance, when it announced layoffs of three teachers, a coordinator for at-risk students, and several staffers for summer learning programs.
In Illinois, lawmakers have proposed a 5 percent increase in the state鈥檚 education budget. But advocates point out the investment of full funding for K-12 schools as laid out in the state funding formula.
In Missouri, Heath Oates, superintendent of the rural El Dorado Springs district, recently learned that lawmakers don鈥檛 plan to use the state鈥檚 to raise the base amount of $6,375 per student that the state uses to determine school funding. The last time that number increased was 2017.
Instead, state officials have signaled that tax cuts and school choice are higher priorities.
鈥淲hile the state has patched together things with a grant here and a grant there, what school districts really need is an increase in the foundation formula so that we can be flexible to our needs locally,鈥� Oates said.
New York City education observers are feeling similarly frustrated. The state is projected for the first time to . But city officials have from school budgets, prompting and at more than two dozen schools.
鈥淲e鈥檙e like, 鈥楬ey, it鈥檚 raining now. Can we use those rainy day funds instead of just cutting from our schools?鈥欌�� said Jasmine Gripper, executive director of the New York-based Alliance for Quality Education.
Inflation is a puzzle for states and districts alike
States are deciding how to use their surpluses as districts have already begun thinking about how to wind down investments they made with nearly $200 billion they collectively received from the federal government to help respond to and recover from the pandemic.
Meanwhile, longer-term concerns haven鈥檛 gone anywhere. District leaders are fretting about everything from widespread enrollment drops to their students鈥� deteriorating mental health and academic performance. Eliminating staff shortages is a perpetual puzzle, and preparing buildings for the emerging effects of climate change looms on the horizon.
Confronting these challenges won鈥檛 come cheap. The Texas School Coalition, a statewide advocacy group, estimates that the state needs to raise its base aid per student from $6,160 to slightly over $7,000 just to help districts keep pace with inflation that鈥檚 occurred since 2019, the last year the state revised the base aid.
The state has already committed nearly half its budget surplus to property tax relief. It likely won鈥檛 have the $13 billion that would be necessary to ensure base aid keeps pace with inflation, said Christy Rome, the organization鈥檚 executive director.
鈥淚ncreased funding for public education in the initial budget bills is not for the purpose of helping schools address inflationary costs for operations, but rather to help taxpayers with the inflationary costs of tax bills,鈥� Rome said.
Indeed, Trongaard in Mansfield is bracing for a far smaller base aid increase, and planning for how increases in hundred-dollar increments will affect her district鈥檚 calculations.
We鈥檙e like, 鈥楬ey, it鈥檚 raining now, can we use those rainy day funds instead of just cutting from our schools?鈥�
The district has opened three new schools in the last four years. Enrollment dipped when the pandemic hit. And the district continually loses teachers and bus drivers to neighboring urban districts with higher wages.
Right now, her draft budget reflects what the state must provide to districts by law. If new laws change spending rules or the amount allocated to schools, she鈥檒l hurry to make adjustments before adopting the final budget in June.
Inflation is top of mind in most states. Minnesota is among the states proposing to commit to annual education spending increases that keep pace with inflation.
But the details aren鈥檛 so simple鈥攖he proposed annual increase includes a , 鈥渨hich defeats the purpose,鈥� said Tanya Monson-Ek, business manager for School Management Services, a school finance consulting firm that works with several Minnesota districts.
Inflation in the U.S. hit 7 percent in 2021 and 6.5 percent in 2022, according to federal data.
A mixed outlook for districts depending on location
Districts in states that aren鈥檛 prioritizing education spending are already dreading the upcoming budget process.
The El Dorado Springs district desperately needs to expand mental health services for students, and hire more special education process coordinators to execute the district鈥檚 federally mandated obligations to help students with disabilities, said Oates, the superintendent.
Raising salaries for teachers鈥攚ho are paid less on average in Missouri than in any other state鈥攚ould also be nice, he said.
But with a small tax base, there鈥檚 only so much his district can do without more robust state help.
鈥淚n terms of real dollars, we aren鈥檛 functioning in a long-term sustainable environment,鈥� Oates said.
District leaders in other states are feeling more pleased with their financial prospects. David Blanchard, superintendent of the 800-student Schoharie district outside Albany, N.Y., is excited about planned state investments in career and technical education programs, and about a in state aid per student.
Still, rural districts like his are always looking for ways to cut costs and hedge their bets for an uncertain future. The district鈥檚 enrollment has dropped by roughly 80 students, or 10 percent, since he took over in 2015.
Blanchard has been talking to neighboring peers about opening enrollment in programs like pre-engineering and Future Farmers of America to students in multiple districts, rather than offering identical programs in each district.
He鈥檚 tried his best to craft budgets so that the district can still afford priorities funded by federal COVID relief dollars once that money expires.
鈥淓ven though there are pressing things today, looking down the road, how can we best poise the district to educate as effectively and efficiently as possible?鈥� Blanchard said. 鈥淭rying to have a long-range vision is really necessary.鈥�
