Mike Falick's Blog

Recap of Tonight's Board Meeting: Canvassing the Election Results, Discussion of Academies and Pathways, FY2009 Budget Parameters, and Interim Legislative Priorities

Our Board held a workshop tonight.  Here's a recap of the issues discussed and actions taken on tonight's Agenda:

First, we approved an Order canvassing the returns and declaring the results of the November 6 Bond Election.  The final results from the election were 9,209 For and 6,048 Against.

Next, we had a presentation and discussion on the portion of the District's Five Year Education Plan regarding the implementation of Academies and Pathways.  Additional study and work will continue in this area for the next several months.

We then discussed the parameters for the District's FY2009 Budget (school year 2008-2009).  As with the discussion last year, next year's budget outlook is bleak.  As regular readers of this Blog know, the State Legislature failed to include any additional funds for purely inflationary cost increases (including increases in energy and health insurance cost increases and cost of living salary increases).  As a result, our initial estimated budget carries a deficit of $13 million.  In addition, our Robin Hood payment skyrockets to $26 million which will represent our second largest expense (after payroll) and 13¢ out of every dollar of your taxes.

Our next agenda item was the discussion of the District's Comprehensive Annual Financial Report (CAFR) for the Year Ended June 30, 2007.  The District received a clean bill of health on its finances with no reportable discrepancies.

Next, we discussed the Board's Interim Legislative Priorities.

Dr. Klussmann then provided the Board with an update on the implementation of the 2007 Bond Plan.

The Board considered on second reading BF (Local) Board Policies.

Finally, the Board approved the Superintendent's Evaluation Instrument.

Recap of Tonight's Board Meeting: 2006-2007 Budget Update and Discussion of 2007-2008 School Calendar

Our Board held its monthly workshop meeting tonight.  Here's a recap of the issues discussed:

The Board received a budget update (.pdf) for the current fiscal year budget.  The budget revisions show that Spring Branch will send $19 million to the State this year due to Robin Hood.

In addition, we received a report from the Calendar Committee with a recommendation for the 2007-2008 calendar (.pdf).  The recommendation follows months of meetings, including 2 public meetings, and a community and staff survey.  The survey showed broad community support for Calendar A (.pdf)  (79%), while the staff survey resulted in an exact split with 613 votes for Calendar A and 613 votes for Calendar B (.pdf).

As you have read, the 79th Legislature mandated that school start no earlier than the fourth Monday of August, which falls on August 27, 2007, for next school year. (You can go to this prior post to see the differences between the 2 calendars that were proposed).  For more information, please go to the District's calendar information page on the District's website.

SBISD Receives Very Bad News on the Budget for 2007-2008

Already anticipating a budget deficit in excess of $2 million for 2006-2007, Dr. Klussmann and his staff gave the Board a dismal projection tonight for 2007-2008.  House Bill 1, passed in the Special Session, was represented by the State's Legislative Budget Board as holding harmless all districts so revenue would be protected by the State.  However, it now appears that buried in the 167 page bill are some provisions that will cost Spring Branch, and many other districts, millions of dollars.  The biggest cost drivers:

    1.    In addition to the $2,000 pay raise which is funded by the State, districts are required to give a "step" increase to all employees on the State salary schedule.  This unfunded mandate by the State will cost Spring Branch almost $2 million.

    2.    The "hold harmless" provisions contained in the bill fall $3.25 million short of a true hold harmless.

    3.    House bill 1 contains no increases in funding for inflation.  Inflationary costs are anticipated to result in increased expenses of $7 million for 2007-2008.

You can view the budget summary here (.pdf). 

During the Special Session, I discussed House Bill 1 with our legislative delegation.  They were assured that Spring Branch would be fully held harmless by the bill.  We are continuing to work with our legislators to address the school funding issues and these apparent unknowns contained in House Bill 1.

I Guess It's not an Option After All: Texas Attorney General Tells Boerne ISD It Must Make Its Robin Hood Payment

I previously posted about Boerne ISD's decision to withhold its Robin Hood payment.  Today the Attorney General's office issued its opinion (.pdf) in which the AG says

The Texas Supreme Court held in West Orange Cove II last year that the current school finance system (is unconstitutional).  In so doing, the Supreme Court affirmed the injunction of the (trial) court under which the State will be precluded fromj giving effect to Chapters 41 and 42 of the Texas Education Code if the Legislature fails to remedy the constitutional violation.

The Supreme Court then extended the deadline for the Legislature to remedy the violation to June 1, 2006.  Before June 1, therefore, no injunction is in force, and Chapter 41 of the Education Code -- which compels the District to make its recapture payments to the TEA -- remains in full effect.

After June 1, the Boerne ISD could be relieved of its obligations under Chapter 41 if and only if the injunction were ultimately to take effect.  And the injunction would take effect only if the Texs Supreme Court were to find that the Legislature failed to correct the constitutional violation.

Accordingly, the Boerne ISD must continue to make the payments required by Chapter 41 . . . unless and until the Supreme Court were (1) to hold that any action taken by the Legislature was insufficient to remedy the constitutional violation, and (2) to enter or allow a present injunction against the operation of Chapters 41 and 42 of the Education Code.

Boerne ISD's payment was due on May 15, so in essence, the AG is saying that even though the system may be enjoined in 2 weeks, Boerne must make its payment because there is no injuction in force today.  I applaud Boerne for shedding light on the significant problems with the Robin Hood system.  Good try Boerne!

UPDATE: Boerne ISD has issued this press release (.pdf) in response to the AG's decision.

Goose Creek ISD Joins the Party

The Baytown Sun reports today that the Texas Education Agency has notified Houston area Goose Creek ISD that it gets to join the Robin Hood party.  Goose Creek is defined as "rich" with 58.8% of its students defined as economically disadvantaged.

How's it feel to be "rich"?

The Chronicle Interviews Spring Branch About "Robin Hood"

Regular readers of this blog know how I feel about the current "Robin Hood" system of funding public education in Texas (see prior posts here).

Annette Baird, of the Houston Chronicle, just published this article on the subject

May  2, 2006,  8:10PM

Spring Branch says Robin Hood rules are unfair

Hope is slim for Chapter 41 reform by end of legislative session May 17

By ANNETTE BAIRD
Chronicle Correspondent

Spring Branch school district officials hold slim hope the Legislature will eliminate or ease the constraints of Chapter 41, a section of the Texas education code requiring wealthy school districts to fund poorer ones, during its special session.

Lawmakers are working out ways to reduce reliance on property taxes to fund the state's schools, but what is commonly referred to as "Robin Hood" is getting short shrift, said Mike Falick, school board trustee and board legislative liaison.

"This session isn't over yet, so I haven't given up," said Falick, who said he thinks Chapter 41 is unfair.  "I continue to hold out hope that, if not now, it will be considered in the regular session (to convene in January)."

The Texas Supreme Court in 2005 ruled the current school finance system unconstitutional, because it essentially establishes a statewide property tax, but Chapter 41 was not part of that ruling.  Unless something changes before the session ends, this means that Spring Branch, as a Chapter 41 district, must continue to share its wealth with poor districts, such as Laredo.

Spring Branch became a Chapter 41 district three years ago, when the taxable value of all property in the district, divided by the number of students (using a formula for weighted average daily attendance), exceeded the limit of $305,000.  Above that, the district has to buy credits to bring it down to $305,000.

That first year, the district paid out $3 million to fund poor school districts.  The following year it jumped to $13 million.  This year, payments could reach $18 million, and an estimated $26 million could flow out of the district during 2006-07.  The pay-out for 2007-08 is expected to exceed $35 million.

"It's getting very serious for us," Superintendent Duncan Klussmann said.  "One thing the district has managed to do is make the majority of reductions in non-campus positions, but that is getting harder to do.   Klussmann said the district budget since becoming a Chapter 41 district has been flat, requiring deep cuts in some areas.  He said central administration has suffered the most, and the district is falling behind on funding capital items.

Diane Jackson, who works on policy administration and government relations, said Spring Branch is among approximately 150 Chapter 41 districts out of 1,034 across the state.  Those districts will have paid out a total of $1.3 billion this year.  Next year, Jackson said about 170 districts will qualify as Chapter 41 districts and face a combined pay-out of approximately $1.7 billion. 

"My concern with recapture (Chapter 41 payments) is that it is going out of control," Klussmann said.  "I think elected officials in Austin want to take care of the situation, but as (Chapter 41 payments) get larger and larger, they have to come up with something that generates that much more money."  At the least, the district wants the Legislature to raise the per-student limit to $400,000, if Chapter 41 is not eliminated.

Klussmann and Falick agreed the state should have an equitable school finance system, but that it shouldn't be borne almost entirely on the backs of homeowners.  "The tax system needs to be reformed, but it is not appropriate for 20 percent of our tax dollars to go out of the district," Falick said.