(Newswire.net — May 21, 2020) — Schools are facing significant challenges right now: aside from the fact that they’re closed for the rest of the school year in Texas, students and teachers (and parents) are being forced to quickly adjust to distance learning that essentially takes the classroom into a virtual setting at home.
However, there’s another challenge that schools are currently facing in Texas and other states. With oil prices dropping to record lows due to a surplus that can be blamed on a stalled economy, there’s less tax revenue being generated. And when that happens, there’s often a hit to the overall budget that affects school funding, explains Kermit Ward, who is the superintendent of Clarksville Independent School District in the state.
The price of West Texas crude oil closed at -$37.63 per barrel recently. This might have been good news for people who are still driving a vehicle to work in the current economy, as prices at the gas pump also fell significantly (although they have started to rebound in recent weeks as some of the lockdown conditions lift.) But it’s bad news for public spending as governments look for a way to limit their deficit.
School Budgets Become Bigger Challenge
School administrators have a couple of difficult tasks ahead of them: one of them is the reality that actually getting students safely back into schools may be a major challenge while following physical distancing guidelines. The other is that they are trying to prepare budgets with the uncertainties about future funding.
That means that some plans to expand operations or even hire staff may have to be put on hold until further notice. Some independent school districts have already mentioned possible layoffs, but Kermit Ward stresses that it’s too early to jump to such conclusions. My district has not and will not cut any positions but we have froze the hiring of certain positions that are classified as extra-curricular or not attached to core-content classes until things appear to be less murky. For example we have hired a few English teachers and still need more but we have a band director and assistant band director position available that we have hit the pause button on.
However, the last time the economy took a major dive, following what was known as the Great Recession in the late part of the previous decade spurred by the housing market bust, schools suffered. And the ripple effect lasted years, with many states taking years to restore public funding for schools to levels that matched those before the recession.
More Funding Was Promised
There was good news for Texas schools on the horizon before coronavirus dominated headlines, explains Kermit Ward. Namely, House Bill 3, which was signed into law in 2019. The legislation promised higher funding for state schools, as well as more compensation for educators. However, it’s uncertain whether the additional money will be available as income from oil and gas plummet, as well as an anticipated drop in commercial real estate values that help form the property tax base. The bill also included cuts to local property taxes.
However, with Texas among others losing money amid the pandemic, school budgets will likely have to be more conservative to avoid having to make cuts down the road if additional funding is not available.
The difference may be whether federal aid money can shore up losses, but the amount of the funding that will be available for education is not yet known as the situation unfolds. Meanwhile, Texas colleges and universities are getting financial help from the feds, but it’s being offset as programs are being cancelled and expenses such as housing are reimbursed.
Also adding to the uncertainty is the fact that many families may choose to leave the state during the summer shutdown in search of employment opportunities and the state has traditionally based its school district funding on average attendance, notes Kermit Ward.
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There are some indications of recovery, at least in the state’s oil and gas sector. A plan to limit production in the state didn’t fly, but global producers scaled back nonetheless to help bring more stability to the market. Meanwhile, the demand is increasing and oil prices are surging in recent weeks.
However, investors are still exercising caution, and it’s unclear how it will play out in the bigger picture including how much money states will have to put towards programs such as education. The Foundation School Program — which funds public schools through predetermined formulas — that relies in part on gas and oil revenue could be impacted.
However, despite challenges, Kermit Ward assures the goal of school administrators is to deliver the best model of education with whatever funds are available in the coming year.