The following is testimony by Dr. Guy Sconzo, Executive Director of Fast Growth School Coalition, delivered to the School Finance Commission on March 19, 2018 in Austin:
Greetings, my name is Dr. Guy Sconzo and I am the Executive Director of the Fast Growth School Coalition. We represent the 80 fastest growing school districts in Texas. These 80 districts take in 80% of the state’s student enrollment growth; meaning that some fast growth districts are adding hundreds or even thousands of new students every year.
A rapidly-growing school district is a wonderful challenge to have but it also comes with over-crowded classrooms, large numbers of portable buildings (which creates additional security concerns) and disproportionately high amounts of facilities debt. Fast growth districts don’t have the luxury of saving their money until they can afford a new building. The new students keep coming and the district must build.
To help combat this problem, two allotments were created in the late 1990s: the Existing Debt Allotment (EDA) and the Instructional Facilities Allotment (IFA). At that time, many fast growth districts benefited from these allotments and the state covered 45% of facilities debt. Now, the state covers less than 7% of facilities debt and most fast growth districts receive no facilities assistance from the state. This is why fast growth districts now have disproportionately high amounts of facilities debt and their taxpayers in school districts such as Cypress-Fairbanks ISD, Humble ISD, Clear Creek ISD, and Northside ISD are experiencing disproportionately high property taxes.
Some people would say this is a school district problem and the state simply needs to make it harder for districts to take on more debt. FGSC would argue that this is a Texas problem. The state prides itself on attracting new businesses to Texas which is wonderful, but those businesses come with many young families. And currently, the vast majority of those young families are choosing to enroll their children in 80 fast growth districts.
Additionally, fast growth districts are a boon to the Texas economy. FGSC recently conducted a study produced by Angelou Economics* and found the following:
• From 2000-2014, approximately $33.1 billion was invested into construction projects in fast growth school districts. The study found that as billions of dollars are invested into school infrastructure and equipment, the investment ripples through and across the larger economy impacting more than 500 business sectors.
• 28,810 jobs are supported per year from school infrastructure investments with $24.7 billion in labor incomes paid out and a total of $70.5 billion in total economic output.
Fast growth districts are an integral part of the “Texas miracle.” Meanwhile, they are burdened by high property taxes, pressure from their local taxpayers, and little to no assistance from the state to manage debt. The fastest and most effective way to achieve real property tax relief is to provide meaningful facilities assistance for rapidly growing communities which must include modernizing the EDA and IFA programs.
I would be remiss if I didn’t mention that the Legislature chose to add funds to the Existing Debt Allotment during the 2018 Special Session. $60 million was added for traditional districts and for the first time in the state’s history, $60 million in facilities funding was given to charter schools. Unfortunately, early estimates indicate that the additional funding for traditional districts will return only seven new fast growth districts to the EDA program. Fifty fast growth districts will still receive no EDA assistance from the state for property tax relief.
Meanwhile, charter schools will receive facilities assistance regardless of need and none of this money goes toward property tax relief. Overall, charters will receive approximately $182 per student for facilities in 2019 while traditional school districts will receive an average of $12 per student.
As you can see, there are many challenges to be addressed regarding facilities assistance and property tax relief for rapidly growing communities. Collectively, we must ensure that the proper investment is made to continue the positive economic impact made by fast growth communities while also achieving property tax relief for local taxpayers. We look forward to a continued discussion with the School Finance Commission.
Find the full Angelou Economics report at www.FastGrowthTexas.org.