3 major school districts are facing the ‘budget blues’ this July. Here’s why.

"Many districts throughout the state will be passing deficit budgets, because they are facing the same challenges," said Austin ISD CFO Ed Ramos. "Teachers are leaving the profession. Employees are making the decision whether or not to stay in their districts."

For most districts, July marks the deadline to pass a budget for the upcoming school year. This year, however, it’s a deadline that many leaders fearfully anticipated, knowing they’d have to make some tough financial decisions. Unfortunately, this is a trend economists have been predicting for months.

Marguerite Roza, director of Georgetown University’s Edunomics Lab, has repeatedly warned district leaders of the inevitable “bloodletting,” the result of the inevitable COVID relief fiscal cliff looming in September 2024. The pandemic in a number of ways has upended districts’ funding sustainability, but the most current trend driving budget deficits this upcoming school year and beyond is student enrollment, Roza declared in a recent webinar.

“Our systems are becoming more staff heavy, even as they have fewer students,” she said. This trend, among others, spells trouble for school districts as they prepare their final budgets over the next few weeks.

Seattle schools are among a plethora of K12 districts anticipating severe cuts to beloved programs this upcoming school year. Come July 6, the school board will vote on a fiscal plan that is expected to close a $131 million gap, KUOW reports. During a school board meeting last week, students, parents and teachers voiced their concerns one last time in an effort to keep certain programs and positions from facing the chopping block.

One teacher urged the board to reverse cuts to middle school teaching staff to reconsider eliminating an assistant principal position.

“If these cuts do follow through, carryover effects would mean much larger class sizes and fewer, if any, elective options for students,” Tyler Dupuis, a kindergarten teacher at Orca K-8 School, told the board. “There are creative ways we can design the schedule to mitigate these effects, but we believe the students we teach deserve more than mitigation.”

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Another group of students, parents and teachers protested the termination of one high school’s mock trial class. One student who has participated in the program for three years said it has “served as a space for marginalized students to feel supported by a strong, established community centered in the conversation of justice, law and advocacy.”

“With the future of Franklin mock trial in jeopardy, we risk losing future lawyers, policymakers, and school board members who add much-needed representation for the most marginalized—yet resilient—communities.”

A budget deficit amidst inflation

The Austin Independent School District is also experiencing similar issues, KUT 90.5 reports. Austin ISD reportedly adopted a deficit budget, and it also has to give back nearly $1 billion to the state over the next fiscal year as part of Texas’s recapture system. According to KUT, the system takes what Texas considers “excess revenue from property wealthy districts and distributes it to districts that can not raise as much money through property taxes.”

Austin ISD would have more money for its budget in and a smaller recapture payment if legislators had raised funding for students this year. However, despite inflation, this is not the case. The district’s per-student spending has remained at $6,160 since 2019.

“I am angry,” board Trustee Lynn Boswell told KUT. “I know there are many, many, many other things that we know we could invest in to make a meaningful difference for our students academically.”

Chief Financial Officer Ed Ramos told the board that the district isn’t the only one facing budgeting issues.

“Many districts throughout the state will be passing deficit budgets, because they are facing the same challenges,” he said. “Teachers are leaving the profession. Employees are making the decision whether or not to stay in their districts.”

Cuts to central office staff

Another Texas district, Houston ISD, unanimously voted last week to approve a proposed $2.2 billion budget for the 2023-24 school year, which includes substantial cuts to central office staff and the district’s vendor contracts, Houston Public Media reports. Several attendees said they were fearful for the future of the district’s wraparound services.

“In order for you to be able to learn, you have to have your basic needs met,” said former HISD trustee Elizabeth Santos. “The wraparound specialists were the framework for the community schools model.”

Additionally, the board voted unanimously to suspend the board’s current policy regarding magnet schools. The updated policy would allow for changes to be made to magnet programs at 12 of those schools included in the New Education System (NES) program.

“We’re going to accommodate magnet programs in NES schools and provide for more experiences, more programs,” said Houston ISD Superintendent Mike Miles. “Out-of-zone folks can continue to go there and know that their kids are getting these programs.”

Over the next few years, budgetary spending will continue to be a controversial issue for district leaders. The pandemic exacerbated this already troubling problem, and it’s likely to get worse as districts anticipate further job cuts, Roza warned during a webinar earlier this month. According to Roza, roughly $24 billion of ESSER III is being used for labor costs in school districts. This equates to nearly 250,000 education jobs, which may be impacted once the funding vanishes.

“But we’re not expecting quite this many job cuts, certainly not immediately because districts can tap their reserves and shrink some of their vendor contracts and things like that to hold onto staff and potentially go with flatter raises going forward,” she said. “But all told, 4% of the education jobs out there hang in the ESSER balance right now.”

Micah Ward
Micah Wardhttps://districtadministration.com
Micah Ward is a District Administration staff writer. He recently earned his master’s degree in Journalism at the University of Alabama. He spent his time during graduate school working on his master’s thesis. He’s also a self-taught guitarist who loves playing folk-style music.

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