Save Our Schools rally

Despite ‘Hardship’ Funding, Rural Texas Schools Face Difficult Financial Future

Education advocates don’t think the funding will be enough to avoid staff layoffs and cuts to student services.


Save Our Schools rally
Demonstrators gather at a Save Texas Schools rally in Austin.

After being pushed to the brink of financial disaster this year, some small and rural Texas schools are hoping to limp along for the next two years, now that the Legislature has approved funding to help them recover from the closure of a critical state aid program.

The Additional State Aid for Tax Reduction (ASATR) program is set to expire September 1. Many small districts rely on the program, which paid out $420 million to rural Texas schools this year. A school funding “compromise” bill signed by Governor Greg Abbott on August 16 will help insulate districts from the loss with $150 million in hardship grants. Lawmakers also voted to do away with the so-called “small school penalty,” a change that will put $41 million into the coffers of some of the state’s cash-strapped districts.

Despite these stopgap measures, the bottom line is still bleak: Because the grants only represent one-quarter of the $420 million rural schools received in 2017, education advocates don’t think the funding will be enough to avoid staff layoffs and cuts to student services.

“It’s not enough for programs to avoid making cuts and laying off staff and having to make decisions that are not in the best interest of students,” said Christy Rome, executive director of the Texas School Coalition. “But hopefully this will be enough for a lot of districts to make it through to the next legislative session, when we’re hopeful that [lawmakers] will make some big changes to improve the way we fund our schools.”

At the behest of the Texas Supreme Court, legislators in 2006 attempted to cut school property taxes by one-third. But small districts in areas with relatively small tax bases stood to lose disproportionately, so the Legislature also enacted ASATR, which aimed to make up the difference in annual payments to schools. Since 2007, the program has paid out $21 billion, mostly to small and rural districts, TEA records show.

For example, from 2007 to 2017, the state has paid King County’s Guthrie CSD, which has about 100 students, approximately $9.8 million. Beckville ISD in East Texas, with an enrollment of more than 600 students, has received approximately $22 million through ASATR since the program began. When it was created, ASATR was given a 2017 expiration date, one that Representative Ken King, R-Canadian, tried unsuccessfully to extend during the special session.

“[King’s bill failed] because there wasn’t something in it for everyone in the House,” Rome said. “We have many legislators from districts that don’t benefit from the ASATR program.” Rome’s biggest fear was that some school districts would be forced to close their doors without ASATR money, but it appears as if the hardship grants “will bridge the gap until the Legislature meets again.”

In some ways, it’s miraculous that lawmakers were able to finalize a school funding agreement at all. Throughout the regular and special sessions, versions of House Bill 21, which includes the ASATR-related grants, were caught in a game of tug of war between the House and Senate. House Education Committee Chairman Dan Huberty, a Kingwood Republican, advocated an immediate $1.8 billion payment to public schools, along with tweaks to state school funding formulas that have been called discriminatory. But Senate Education Committee Chairman Larry Taylor, who criticized the plan as shortsighted, wouldn’t budge.

When the Senate sent its HB 21 amendments back to the House late in the special session, funding levels had been slashed and formula changes had been replaced by a plan to study the issue through a commission. (Which, if the state’s maternal mortality task force is any indication, may produce good work that gets ignored).

“There was no compromise. We kept waiting for the compromise and as it turned out, the Senate didn’t have any compromise in it,” said Barry Haenisch, executive director of the Texas Association of Community Schools.

In a shrewd political maneuver, the Senate included new funding for retired teachers’ health care in the bill, forcing members of the House to make a difficult choice: vote for the Senate amendments and end the protracted school finance battle, or vote against the amendments and raise the ire of retired teachers, an influential and vocal voting bloc.

House members opted for the former, 94 to 46.  

Though the Senate version of the bill was far from ideal, Rome said, she still supports the legislation. “We knew there were districts facing closure without some form of a hardship grant. This isn’t necessarily the form of the grant we preferred, but we definitely think $150 million is better than zero.”