Texas Schools Increasingly Mired in Debt, Says Comptroller

A report from the Texas Comptroller indicates that school districts around the state are dealing with budget shortfalls by taking on a larger amount of debt. The Houston Chronicle reports that the total school debt load is more than 1.5 times higher now than it was in 2001 with districts owing more than $63.6 billion as of 2011.

Although the aim of the report was to bring transparency to local government finances, says state comptroller Susan Combs, some think that it is also a way for Combs – who is anticipated to run for the post of Lt. Governor in 2014 – to draw the support of political groups like the Tea Party. This interpretation is backed up this being her third report this year dealing with the topic of local government debt, and contains many instances of what Combs describes as "questionable spending" by school districts.

In the last year Texas schools have lost more than $5.4 billion in funding, which, coming on top of several years of education cuts, could push more districts into the red. Many have already had to turn to bond issues to fund things like capital improvements and school bus purchases. At the moment, eight in ten Texas districts are carrying this kind of debt obligation.

After school administrators saw lawmakers slash their budgets and force layoffs last year, Combs said they shouldn't see the report as a message that they're now spending too much.
"There are some wonderful examples in here of school districts doing a wonderful job. Those are best practices," Combs said. "I'm not trying to ding anybody up."

The situation has given rise to a lawsuit by more than 600 districts educating nearly 75% of the state's students over the issue of funding and the formula used to distribute the money between richer and poorer areas. They are arguing that the funding formula used by the government is so flawed that it violates the Texas Constitution.

The main issue in the case will be the annual reduction in funding for education at the same time that student population in the state is growing by leaps and bounds. The rise in student numbers is especially rapid among low-income families and those born outside the United States.

Over the course of the arguments, which are scheduled to being next month, the districts will be attempting to prove that they are operating in "crisis mode," and are therefore unable to offer the quality of education guaranteed by the Constitution. Meanwhile, the state government will be arguing that while the funding issues are indeed dire, they don't constitute a crisis quite yet, although they admit that this is possible in the next few years.

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