5711/15/2024
A financial crisis is looming over many Texas school districts, and without immediate action, the consequences could be devastating. Many are on a collision course with fiscal insolvency.
There has been a great deal of debate about state funding and decreasing enrollments. These are things schools have no control over. But a core issue that is almost never discussed? The well-meaning trustees elected to set these multi-million-dollar budgets are often ill-equipped and lack the needed training to prevent the financial collapse of their districts.
These staggering figures are a mere sampling of what is happening across the state:
Houston ISD: $211 million deficit.
Dallas ISD: $187 million.
Fort Worth ISD: $17 million
El Paso ISD: $12 million.[1]
After nearly 30 years in public education, I count a host of trustees as my personal friends. Generally speaking, trustees are honest, good-hearted members of their communities who just want to help improve education for the children in their districts. They are not, however, necessarily accountants or school finance experts by trade.
These trustees—elected to protect the interests of students, families, teachers, and taxpayers—are often unaware of the financial red flags buried in the spreadsheets presented to them. Without the right questions to ask or the proper training, many trustees simply rubber-stamp the numbers under the impression that the math checks out. The result? School boards are unknowingly driving their districts toward insolvency.
The Texas Association of School Boards (TASB), the typical provider of trustee training, is failing to address this critical knowledge gap. It leaves trustees unprepared to tackle the complexities of school finance.
To address the fiscal disaster districts are facing, TASB’s only plan appears to be to blame the state and federal government and demand more money from above. But the blame game does not help a single district deal with the immediate reality on the ground. TASB completely fails to equip trustees to take charge of their district’s finances.
This is where Texans for Excellence in Education (TEE) steps in. Our program, School Finance Connect, offers the in-depth financial training that trustees desperately need but are not receiving from TASB. We don’t just provide an overview of budgeting—we equip trustees with the tools to ask tough questions, forecast fiscal challenges, and recognize potential threats to their district’s financial stability before it’s too late.
So how are trustees being misinformed? Here are some examples.
Whether it’s insurance or energy, trustees often do not understand they have cost-saving options outside of TASB’s offerings. They need to be trained on how to find the best rates, no matter the provider.
Then there are bonds. Trustees are asked to approve massive packages that oftentimes max out tax rates and bundle numerous projects together. They need to be trained on how to analyze the long-term debt obligation, maxed-out tax rate implications, and the details of each proposed line item, looking for waste.
Furthermore, district administration should be presenting 3-to-5-year financial projections to trustees on a periodic basis. If they present a deficit budget, they should present with it a plan to solve that deficit in the next fiscal year. Trustees need training on examining revenue variances and the payroll-to-revenue ratio as well as training on oversight of outside contracts.
These are all areas where TASB has failed and TEE has stepped in to help.
The financial outlook for many Texas school districts is grim. Without better financial oversight, we are facing a future where districts will be forced to make painful cuts, lay off teachers, curtail essential programs for students, and raise taxes.
Trustees don’t run for office to be elected as figureheads; they must become the financial watchdogs their districts need in order to avoid these drastic measures. The law requires it, and the voters expect it.
School Finance Connect by TEE is designed to address these urgent needs, offering trustees a comprehensive education on school finance, from understanding budget forecasts to evaluating long-term financial sustainability. TEE also provides a consultative evaluation of a district’s finances to give trustees a clear, realistic picture of their current situation. This evaluation helps ensure that trustees aren’t just reacting to short-term needs but planning for long-term financial health.
Texas school trustees are local citizens who care deeply about their schools and their communities. With the right tools and guidance, trustees can become empowered decision-makers who safeguard their districts from fiscal collapse.
For more info, visit texansforexcellence.org/