Letter to Editor:
Budgetary difficulties facing school districts in oil producing regions across Texas, where drilling continued for nearly a decade until oil prices plummeted, continue to cause financial hardships.
Alice ISD is still holding strong, but the threat could lead to a more serious financial blow for the district if it lingers for too long. Some districts across the state dipped into their fund balances immediately after the drop in revenue and have continued to do so the last two years. A few of these districts anticipate they will run out of money this coming year or be in a position where they can’t afford to pay their bond payments. Luckily, even though Alice faced the lowest property tax values since the 1980s, the school district initiated drastic measures to curb spending over two years ago in anticipation of the drop in revenue.
This year local property values have declined almost 25 percent. This translates to a loss of almost $4 million for the district this year alone. Excessive losses began in 2014-2015, and the district developed a plan to tighten the budget and increase the fund balance (savings) in anticipation of greater losses in upcoming years.
Over the last 3 years the district has cut positions and department and/or extra-curricular budgets in an attempt to balance the budget even though the loss of revenue is excessive. In 2014-2015 the budget was developed and approved with an anticipated $4.5 million deficit. What this means is that the district developed a budget based on the amount of money it believed would be needed in order to run the district for one full year. Because of the cuts in personnel and less spending by school employees, the deficit at the end of that school year (2014-2015) was actually $2,080,778 as opposed to the estimated 4.5 million.
The district did not spend all the money they believed they needed to run the district; they saved about half of the money, which goes into the fund balance (savings account).
At the beginning of the 2015-2016 school year the district anticipated the budget deficit would be approximately $4.3 million because tax values fell again. At the end of that year, because of the tightening of spending, the budget deficit at the end of the 2015-2016 school year was approximately $1.3 million. So, the district was able to decrease the deficit once again. This year the district budget is carrying a $4.5 million deficit, and we are going to attempt to save as much as possible.
Currently, the state recommends maintaining about $9 million in the fund balance - 3 months of salaries and monies to run the facilities in case state revenues do not come in on time at the beginning of the school year or emergencies arise. Currently, we have almost $11 million in the fund balance despite pulling from the fund balance to make up the difference in spending due to the deficits in the budget the last two years (2014-2015 and 2015-2016).
Of course we don’t know how long this dip in local property values will continue. Many school districts were able to build up savings during the boom which could carry them a long way through this crisis, but the drop in appraisals has been so extreme in some areas—including ours—we just don’t know. Our best bet is to balance the budget and spend only what we receive in revenue. The board, finance department, the superintendent and administrators across the district have worked long and hard in an attempt to curb spending and maintain the quality of instruction and co-curricular and extra-curricular activities for your children. No student programs have been cut. School employees have pulled together to brainstorm on how to curb spending and save money at their campuses and through their departments.
Parents need to be aware changes are being initiated which they may not like, or may disagree with, but the district does not have the money to be extravagant right now. If the district had continued to spend money the way it had been during the spike in oil prices, it would have been broke by now. All we can do is attempt to be conservative until the economy perks up again. In the meantime please know that we are doing our very best for you and your children. The state accountability ratings and individual campus results show improvement and growth in many areas.
If you are interested in knowing how your child’s campus did accountability-wise, please attend a public hearing at the next board meeting scheduled for October 10 at 6:30 p.m. at the Alice ISD Administration Board Room. We thank all of you who continue to support us through thick and thin.
Dr. Grace Everett Superintendent of Schools