Urban school districts in Texas struggle to make ends meet despite record property wealth
This is the third story in an ongoing, data-driven TPR series called Golden Pennies.
It’s no secret that it costs a pretty penny to live in the Texas state capital. Rent’s gotten so high that some residents are being priced out.
So, even though they couldn’t really afford it this year, the Austin Independent School District gave its employees a raise.
“It's very difficult for our employees to live in the city that they work in, and so, we knew that we needed to do something with regards to doing our best to pay our employees a livable wage,” said Eduardo Ramos, the district’s chief financial officer.
Pretty much everything costs more than it did in 2019. But in Texas, the state’s public schools are still getting the same amount they were four years ago.
Bills that would have increased state education funding this year have been stymied by Gov. Greg Abbott, who made passing a school voucher bill a condition of increasing funding for public schools.
That flat funding has school districts across Texas struggling to balance their budgets — even large, urban districts with a lot of property wealth.
Austin ISD’s salary bump pushed the district into a $52 million deficit, even though it collects more in property tax revenue than almost any other in the state.
The reason: Austin ISD also pays more recapture than any other district in the state.
In Texas, anything above an amount set by the state legislature gets redistributed to property-poor districts through recapture, the state’s property-wealth equalization system. Most people know it as Robin Hood.
“There's a need for a type of system such as recapture,” said Ramos. “There are districts that have more taxing capability than other districts.”
But he thinks the current system benefits the state more than schools.
“Recapture districts have become a revenue source for the state of Texas,” Ramos said. “When the state receives recapture payments above what they've budgeted, they reduce their share. ... And so, they use those funds for other state needs.”
If he were in control of the state funding formula, Ramos would tie per-student dollars to inflation with automatic increases. He said Austin ISD needs $900 more per student just to keep up with inflation.
He’d also create an allotment for districts like his where the cost of living is higher.
“One of the misconceptions I think that's out there is that when you're a property wealthy district, there's personal wealth in your district as well. And so, Austin ISD, that's not the case,” Ramos said.
According to the latest estimates, Austin ISD paid more than $900 million in recapture last year — nearly 60% of all the property tax it collected. That left the district with about $10,500 per student last year — $2,000 less than the average Texas school district.
“When you have a district like Austin ISD, that's over 50% economically disadvantaged and sending over half of our local tax collections back to the state — to us, that's an unfair system,” Ramos said.
Just more than half of Austin ISD’s 73,000 students are economically disadvantaged. But in some schools, like Webb Middle School on Austin’s North East Side, almost every student comes from low-income families. Nearly 90% are Latino.
In the first-year band class at Webb, band teacher José Muñoz-Montano played seven notes on a trumpet.
“That's the part that we need to make sure that the trumpets don't do. We go low, high, low. They just stay on low,” Muñoz-Montano told the class. “All right. Baritone, trombone, tuba. Here we go. Starting on this F, last two measures.”
The students picked up their instruments and gave it their best.
Principal Michael Coyle said electives like band are important because they spark students’ interest, but he has to fundraise to be able to send students to competitions, and it’s a struggle to keep the fine arts department strong.
“Electives are sometimes the first things that gets cut,” he said. “It's a shame when we have to choose between a math teacher and a choir teacher.”
Coyle used a big ring of keys to unlock doors throughout the school. Webb Middle School is an older building and doesn’t have fancy new security upgrades like key cards.
“Overall building updates, and those security systems, would be huge for students [so] they know — I hope they feel safe already, but just that extra level of support that unfortunately costs money,” he said.
“Sometimes these tiles fall down on people's heads,” Coyle added, pointing up at the ceiling.
Two rows of trailers on one side of the school house classes for recent immigrants. Three out of four students at Webb are English Language Learners.
Inside one of those classes, ELL social studies teacher Neill Dillon guided students through a lesson on the banking system. He brushed his palms together to symbolize making money rain.
“What is something that we give money to?” Dillon asked.
“Oh, like money?” one student said. “A bank?”
“The bank,” Dillon said. “How do we say 'bank' in Spanish?”
“Banco,” his class said in a chorus.
In general, Coyle said a lot of his students have higher levels of need — both to catch up in the classroom and more fundamental things.
“Some of our students from other countries may not have been in school for years,” he said. “[And] they can't concentrate in a classroom when they don't have food, they don't have running water, they don't have electricity.”
Texas, like a lot of states, gives extra funding to students who need more support. Low-income students get about 25% more. Most English Language Learners get 10%. Coyle said that’s not enough for Webb.
Ericka Wiggins Weathers researches education funding policies at the University of Pennsylvania. She said poverty often ends up being used as a proxy for race, but her work shows Black and Latino students often end up with less funding than white students, even if they’re equally poor.
“There's other research that shows that holding income constant, basically meaning if Black families and white families had the same income, there are still differences in schooling outcomes. We see that for outcomes such as high school graduation [and] college going rates,” Wiggins Weather said.
“If race and poverty were this perfect proxy … then once we controlled for poverty, there would be no relationship between racial segregation and these racial disparities in school district revenue and expenditures. But that's not what we find,” she explained. “Why is that? What is it about racialized poverty that means they're getting less? And I don't think we have enough conversation about that.”
A big part of the reason is because states rely on property tax to pay for education. Historic discriminatory housing policies linger today in school district boundaries and property values.
Austin ISD is expected to collect more than $1 billion in property taxes again this year. But, because Austin also has a lot of students with a lot of needs, the district — like many Texas school districts — will most likely struggle to make ends meet again next year.
Coyle said he knows district leaders would give his school more money if they had it, but their hands are tied by the Texas school finance system.
“It's hard to see schools, state-of-the-art schools in other areas that are using money that come from our area or our city that aren't being used for our students who need it most,” he said.
Without an exception to recapture called Golden Pennies, Austin would have an even harder time making ends meet. Golden Pennies allows Austin ISD to keep about $1,000 more in property taxes per student.
But the districts truly benefiting from Golden Pennies have a lot of land worth a lot of money and very few students. In part four of this series, TPR will visit a West Texas district that has nearly five times as much money to spend per student than Austin ISD.