• School Finance logo
    NEW!  Listen to this informative podcast where TASB Speaks to Catherine Clark about School Finance!

    Midway ISD Endures a Decade of State Funding Cuts

    Midway ISD, along with 175 other Texas school districts, is preparing to lose all funding from the Additional State Aid for Tax education (ASATR), a funding provision established in 2006 that was later set to expire in 2017.
    ASATR funds account for approximately one million dollars of Midway ISD’s operating budget.
    Throughout the past six years, Midway ISD’s state funding has been dwindling through a series of multi-million dollar revenue cuts.
    By the end of this school year, the district will have lost a projected total of more than $16 million in revenue since the state began reducing funding in 2011.
    The loss of state aid
    In 2006, the Texas Legislature approved a plan to lower school property tax rates in the entire state by one-third but guaranteed that school districts would not receive any less funding on a per-student basis as a result.
    To ensure no district would see a loss of revenue caused by lowering the tax rate, a new section of the Texas Education Code was enacted to provide districts with payments of ASATR funding. The intent of ASATR was to give districts the ability to maintain at least the same level of per-student funding as they received for the 2005-06 school year.
    Between 2006 and 2007 school years, MISD’s maintenance and operations (M&O) tax rate reduced from $1.26 to $1.04 per $100 of property valuation. To make up for the loss in revenue, the district received more than $6 million in ASATR funding for the 2006-07 school year. In the 2008 school year, MISD received its highest ASATR payment of more than $12 million.
    In 2011, the state significantly reduced funding for public education. MISD lost $4.5 million over two years, including a substantial reduction in ASATR funding of approximately $3.9 million. The Legislature also enacted a repeal of ASATR effective Sept. 1, 2017.
    MISD is projected to receive $1,369,861 of ASATR in 2017 before the proposed sunset date of September 1, 2017.
    Loss of funds affects staff and students
    So how can Midway afford yet another million dollar revenue cut? Will the students and staff feel it?
    Although the district has been losing funding in the past decade, the administration was able to identify cost-cutting solutions to affect students as little as possible.
    Due to the 2011 state reductions to school funding, Midway ISD permanently cut out about $4.5 million from the operating budget. $2.5 million of the savings was achieved through staffing attrition. In other words, when someone left the district due to retirement or personal reasons, no one was hired to replace them.
    Midway ISD ended the 2015-16 school year operating at staffing levels below the 2010-11 school year due to the 2011 funding cuts, despite district growth of almost 700 students since that time. 
    From 2011-2013, Midway ISD also made cuts to teaching stipends, electrical usage, athletic budgets, maintenance projects, supply budgets, and bus purchases. MISD also accepted a limited number of transfer students, which brings in roughly $6,000 per student in state funds.
    In 2013, voters passed a $34.5 million bond to fund some of the cut expenses such as purchasing new buses and funding maintenance projects for most campuses across the district. The bond also included construction of extracurricular facilities and the purchase of digital devices for every student to capitalize on endless web-based resources.
    In 2016, all of MISD’s non-personnel budgets, such as supply and department budgets, took another five percent across-the-board trim.
    Looking for solutions
    “Since approximately 80 percent of our budget is personnel, it’s nearly impossible to lose millions of dollars in funding without it affecting jobs somehow,” said Assistant Superintendent for Finance Wesley Brooks.
    Some solutions affect students and staff in the classroom, but won’t require cuts to staffing. For instance, rather than adding more teachers as the student population continues to increase, the district could increase class sizes.
    Another solution could be calling for a tax ratification election (TRE) to ask voters to raise the property tax rate in order to fund salaries.
    When the tax rate was reduced in 2006, the state placed a tax rate cap of $1.17 per $100 of valuation on district M&O tax rates. However, MISD has maintained an M&O tax rate of $1.04 since 2007, making it one of the lowest M&O tax rates in McLennan County. (Voters have approved school bonds for an I&S tax rate of 28 cents per $100 valuation for a total tax rate of $1.32, still a modest rate compared locally.) To tax at a rate higher than $1.04 for M&O, state law requires a district’s voters to ratify a higher tax rate in a TRE.
    tax rate map  
    Taking action
    “But before facing more budget cuts or higher tax rates, we -- together as a community -- have an opportunity to be proactive in the creation of state funding laws.” MISD Superintendent George Kazanas said. “What we need is for people to express their opinions about this complex subject of school finance to current state legislators, and to be engaged in the voting process of future elected officials.
    “The Texas Supreme Court has ruled that our current funding structure ‘meets minimum constitutional requirements.’ I don’t like minimum, and I don’t want to provide a minimum education to our students,” said Kazanas.
    ‘Supreme Court Justice Don Willett also said, ‘[Students] deserve transformational, top-to-bottom reforms that amount to more than Band-Aid on top of Band-Aid. They deserve a revamped, nonsclerotic system fit for the 21st century.’
    “We at Midway ISD would like to see serious efforts made in the 85th Legislative Session towards the significant reforms recommended by the Texas Supreme Court judges,” said Kazanas.