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Southlake Style

Cutting Class

Aug 07, 2012 03:04PM ● By Mike

Carroll School Officials Shield Classrooms from cuts... so far

Revenue-generating projects, student fees, and streamlined spending are the new norm in Carroll ISD, and although Dragon families are not especially happy about the situation, they seem to understand why it has to be this way. The alternative is too costly for citizens in this community to think about. After all, many of them moved their families to Southlake because of the public school system, and they aren’t about to let state funding shortages rob their children of the excellence they have come to know and expect from Carroll ISD.

Texas is 47th in per capita spending for public education, a dismal showing for a state rich in history and pride. Although politicians will tell you that education funding is one of the biggest pieces of the state’s budget pie, they fail to mention that they relied on federal dollars to cover educational costs and shortages in the last legislative session resulting in more than $10 billion in cuts to public schools this last budget cycle. As a result, Carroll ISD received $8 million less from the state coffers. The local district is not alone, however, every public school district in the state of Texas suffered losses over a two-year period.

Preparing For State Shortages
The financial blow was not totally unexpected. Carroll school officials have spent the last four years educating teachers, support staff, parents and taxpayers about the school finance situation. From budget websites and online public opinion surveys to Town Hall meetings, CISD has been sharing the facts and asking the public for input. As a result, the district has weathered the state funding shortages without much effect on the classroom. That’s a trend, however, that school officials say won’t likely last.

“We’ve done everything we can to keep the cuts away from the classroom,” said Carroll Superintendent David J. Faltys. “We have cut positions, reduced operating budgets and instituted unpopular student fees – all in an attempt to keep the money problems away from the kids. So far, we’ve been pretty successful.”

With outside funding sources like marketing sponsorships, solar energy grants and utility rebates, CISD has managed to limp through the current school finance crisis with a strong fund balance and minimal classroom impact. District officials say the school bus rider fee instituted for the 2012-2013 school year, however, is the just the start of a trend to find ways to help offset operating expenses so that programs and people can be saved.

“We certainly didn’t want to have to add a bus fee for all riders,’ said School Board President Read Ballew. “But parents told us in our surveys that they would rather pay a fee to ride the bus than lose services altogether. We reluctantly established the $250 rider fee but were able to at least give families an annual maximum.”

The Board-approved cap sets a $500 limit per family for bus services in a given year. Still, CISD hopes to recoup at least some of the $2 million it spends to provide bus service annually. Because it is a property wealthy district, CISD receives no transportation dollars from the state. Officials are not yet sure what impact the new fee will have on ridership. At least one estimate expects a 20 percent drop in the number of students riding the school bus. That could mean a reduction in drivers and/or routes eventually and more parent vehicles in school pick-up/drop-off lanes.

Outside Revenue Sources Saving The Day
With a $5 million operating deficit this next year, Carroll officials will rely on the bus fees, federal funds and fund balance dollars to make up the difference. The Administration has already cut central office departmental, athletic and professional development budgets by about $3 million. Utility costs have been reduced by nearly $500,000 annually, and a drop in enrollment resulted in 16.5 fewer teachers needed over the past two years. In addition, the Board and Administration cut eight teaching positions through retirements and resignations. Prudent spending by budget managers has also helped the Administration close the gap between spending and income, saving about $650,000 this year alone. Still, the outlook remains less than ideal.

The district launched a website called to ensure financial accountability and transparency. It’s on this site where you can find the Superintendent’s latest Balance the Budget Plan, which outlines a number of options to reduce the operating deficit and grow revenues over time. The options include, but are not limited to new student fees, the sale of Carroll Intermediate School and more staff and program cuts.

Still an option for Trustees is calling a Tax Ratification Election (TRE) asking voters to consider an additional tax on their own property to help fund education. By law, the district can hold a TRE for up to 13 additional cents per $100 assessed valuation. Because of the way the finance formula works, however, only the first two cents would be protected from Robin Hood recapture. That means a two-cent TRE approved by voters would generate an additional $1 million annually, but anything above those two cents would be subject to Chapter 41 recapture. School officials say more than half of every tax dollar collected on the additional 11 cents would be sent back to Austin.

Parents and taxpayers here in Southlake have told school leaders through an online survey that they won’t support a TRE for the full 13 cents, but they would be willing to support a two-cent TRE if all the money stays in Carroll ISD. Trustees must, however, consider the appropriate timing of a TRE to be successful. With a healthy fund balance but no state relief in sight, Trustees do not want to lead the district down a pathway to bankruptcy. The Board has been carefully considering all options and has managed to not only educate the community about the school finance situation, but also protect the classroom from drastic cuts. Sometimes shielding the classroom, however, can give local citizens a false sense of security.

The Real Story Behind School Fund Balances
Lawmakers in Austin are more than ready for school districts to spend down their fund balances. They claim districts are hording money and are not in a state of financial crisis. While true CISD has a substantial fund balance – about $29 million - what those same lawmakers won’t tell you is that the district uses that fund balance throughout the year to cover various expenses. It takes about $6.9 million for CISD to operate for one month. That means a $29 million fund balance really equates to only four months of CISD operations. Also, the district receives a financial rating based on the amount of money it keeps in its fund balance.

Officials say fund balance is used to help cover operating expenses until tax collections begin to pour in to CISD each year. There was a time in CISD’s not-so-recent past that the district had to borrow money to meet payroll during those months. Members of the current seven-member Board of Trustees, however, have been diligent about building the fund balance back up to avoid costly financing and fees associated with borrowing money short-term.

By policy, CISD must maintain at least 45 days of operating expenses – or about $9.5 million – in fund balance. The state also sets an optimum fund balance and assigns each public school district with a rating as part of the Financial Integrity Rating System of Texas (FIRST). Carroll ISD has received a Superior Rating each year since the accountability system was put in place. Spending fund balance down to dangerously low levels, however, will mean putting the district’s financial rating at risk.

It also means that CISD would have no financial security in the event of a crisis. The general public doesn’t always realize that the state doesn’t “settle up” with districts until almost a year and half or two years after a fiscal year ends. And sometimes, the state decides to delay making its own finance payments to public schools.

“We have been fortunate with a couple of one-time transactions to give Carroll some temporary fund balance security,” said Robb Welch, CISD’s Assistant Superintendent for Financial Services. “But we know that these one-time monies will not support an ongoing state funding problem. The state’s school finance system is broken and we cannot rely on one-time funds or school fund balances to sustain a broken system long-term.”

In essence, state officials won’t use their own Rainy Day Fund to pay for public education, but they want districts like CISD to spend down their fund balance accounts to make up for the losses at the state level. In turn, lawmakers constantly pressure local school leaders to call tax elections to see if the voters will support more funding for public schools. With Chapter 41 Robin Hood districts like Carroll, taxing yourself to send more than half the money away to Austin just doesn’t make good sense. It’s the first question lawmakers ask, however, when school leaders talk to them about making education funding a priority.

“Have you called a tax ratification election and if not, why?” they ask. The answer to Carroll Dragon taxpayers seems to be a no brainer. Voters here do not intend to tax themselves just to have the money utilized by the state rather than for their own local school children. CISD Trustees who have talked with state representatives have found that even the lawmakers themselves do not fully grasp or understand the impact their votes have on local school districts. Some had no idea that local school districts are the only entities that do not benefit from increases in local tax values. Cities benefit; junior colleges benefit, hospital districts benefit; but public schools do not.

Taking a Stand for Local Control
In 2009, the Carroll School Board adopted a Legislative Platform calling for more local control, relief from unfunded state mandates and an academic accountability system that measures student growth over time. CISD Trustees support freedom for local districts to make budget decisions on instructional spending based on their community’s expectations and standards for academic rigor. They also support the return of tax levy authority to the local elected officials versus costly and difficult to explain tax rollback elections. Instead, lawmakers in the last legislative session gave districts the local control to furlough administrators, cut teacher salaries and reduce staffing with less notice to their employees. This is not the kind of local control CISD Trustees were hoping for from the state.

Despite a complicated system for funding schools and hard-to-understand funding formulas that baffle even the state’s top finance experts, CISD officials have remained committed to communicating with parents, employees and taxpayers about the financial shortfalls facing public schools. Dr. Faltys and his staff conducted 32 different public meetings last fall in an effort to share the news with those most affected by decisions being made in Austin. As a result, parents and educators in Carroll ISD seem generally satisfied with the job their elected officials are doing to protect the classroom from state funding losses.

With the help of federal EduJobs funds, a solar energy grant, Oncor rebate monies and a surprise check for projects related to flood control developments around Grapevine Lake, CISD has managed to maneuver its way through the turbulent waters of school finance with a calm, focused demeanor. Still, Trustees have not been able to give employee pay raises for three years. Trustees have understandably been reluctant to fund recurring salary increases with one-time funding sources or a diminishing fund balance.

A record number of educators chose to retire this past year and rising insurance costs mean that most teachers and administrators are taking home less and less each month. Carroll employees experienced a seven percent increase in insurance rates in 2010-2011, a nine-and-a-half percent increase in 2011-2012 and another projected six percent increase in 2012-2013. Inflationary costs, insurance rates and more competitive salaries in the DFW Metroplex present a very real problem for Carroll Trustees when it comes to the goal of hiring and retaining quality staff in all positions.

The Board has until the end of August to adopt the 2012-2013 budget, and although no significant classroom cuts are slated for this next school year, Trustees say the community can expect difficult decisions going forward if things at the state level remain unchanged. Carroll ISD’s financial message is an urgent one.

Make Education A Priority
CISD was one of more than 600 districts that joined a public information campaign last year to Make Education A Priority. The effort was started by Aledo Trustee Bobby Rigues who was tired of hearing negative rhetoric about public education. Carroll School Board member Sue Armstrong has been instrumental in making sure lawmakers in Austin know how the decisions they are making affect the local schools. As CISD’s Legislative Liaison, she was instrumental in helping CISD host a successful public forum on school finance with two neighboring districts in the fall of 2010. Now, Carroll ISD is one of six school districts planning another North Texas rally for public education funding in October.

Carroll, Birdville, Eagle Mountain-Saginaw, Rockwall, Mansfield and Grapevine-Colleyville ISD will all come together this fall to rally taxpayers in support of funding for their public schools. The event will be open to all districts in North Texas in an effort to create a greater understanding about the plight of public school financing in Texas. The rally has the support of organizations like Friends of Texas Public Schools, Be Proud Texas, the Texas Association of School Boards and the Texas School Public Relations Association. Organizers are hoping that the Be Proud Rally will be duplicated in other regions across the state on the first Tuesday of October, just four weeks before the general election.

Children in Carroll ISD may not have lost programs or their favorite teachers yet, but more state budget cuts could mean change is in the air. As the 83rd Texas Legislature prepares to convene in Austin this January, local school officials will be watching and waiting to see what happens next. Already a number of key education committee members have either retired or lost in their primary races for re-election. It’s hard to predict what those changes will mean for districts like Carroll ISD. As one of only about 100 districts in the state considered “property wealthy,” CISD does not stand to fare well in the political framework of Texas public school financing.

In fact, CISD is one of hundreds of school districts now suing the state of Texas for not adequately funding public education. Local Trustees said they joined the lawsuit in an effort to enact change through the state’s court system. With an October 22 hearing date set, most public schools expect victory in the courtroom. That won’t necessarily translate, however, into more funding for all Texas school children. It will simply result in a court mandate to the Texas Legislature to “fix” the problem.

“A free and appropriate public education is a constitutional right for all Texas children,” Dr. Faltys said. “While all of the other needs in the state budget are important, too, they aren’t guaranteed rights under the Texas Constitution. If it takes a lawsuit for leaders in Austin to do what they know is right for the future of our children, then so be it. I fully expect the court to mandate changes in the current system.”

Regardless of the outcome, CISD taxpayers and parents can rest assured that the locally elected leaders are working diligently to keep the politics of school funding as far away from the classroom as possible. Another wave of state cuts for Carroll ISD, however, could make that task harder and harder to accomplish.

For more information on how Carroll ISD is handling the state funding losses, visit, and resolve now to attend the October 2 Be Proud Rally to do your part to support your public schools.