Starting in September, the Prosper Independent School District is scheduled to lose $10.8 million in state funds.
The money would have come from the Additional State Aid for Tax Reduction program, known as ASATR, which helped fund the district for years.
Last year, the program gave the district more than $10 million in funding, and the year before more than $3 million. Since the program’s creation in 2006, it’s given the district more than $90 million in funding.
ASATR was created in 2006 because the state legislature compressed tax rates by one-third after the Texas Supreme Court ordered them to lower high property taxes in local school districts. ASATR filled the funding gap felt in the school districts hardest hit by the reduction.
In 2011, the state legislature voted to cut the program, and enacted a repeal set for September 1, 2017.
“While it is true that ASATR has had a deadline that we’re known about for a while, there was also intent from everyone in the State of Texas that there was going to be a new school funding formula,” Greg Bradley, the assistant superintendent of business and operations for Propser ISD, said.
Six years later, Prosper ISD is ready for the repeal in the short term. The district has enough money to cover the gap by dipping into its fund balance.
“We’re able to cover this year without a problem but, you know, if this were to continue and we continue to add 2,000 students every year it’s going to get really difficult,” Bradley said.
Long term the district needs the state to either rework the school finance formula or come up with a new funding program to replace ASATR.
This August, Bradley said the district is expecting 17-20 percent growth in student population, which means they will go from having 10,300 students to close to 12,000. That growth will increase operating costs that were funded about 10 percent through ASATR.
There is still hope for additional funding this year. Governor Greg Abbott has called a special legislative session this July and on the agenda is public education funding.
There was $1.5 billion missing from public education funding in the state’s budget this year because that money was tied up in House Bill 21, which dealt with school finance reform. When the bill went to the senate they added a provision subsidizing private tuition for certain student and the house opposed this. The bill died but some hope the $1.5 billion will be brought back up in the special session.
Bradley said he hopes the legislature comes up with a solution fast.
“We can weather this storm for now but if it were to continue year after year it would be extremely difficult,” he said.
Residents in Prosper may be wondering how their property tax evaluations are rising and they’re paying more in taxes than ever before but the school district still needs money from the state.
Bradley shed some light on this. He said the $1.67 the school collects in taxes does not all go back to the district.
Fifty cents of that money goes toward the interest and sinking fund, which has bonding capacity and is used for construction costs, like the new elementary schools that are being built. The $1.17 left over in taxes goes toward operating costs and back to the state.
“That money is being taken elsewhere by the state legislature and so we feel like we were guaranteed a certain amount to count on or that the funding formulas would be rewritten and they haven’t been,” Bradley said. “And so, it’s true our people are paying more in taxes than they ever have but we’re seeing less in return from the state than we ever have as well.”
The district is still able to construct facilities even with the gap in funding. In fact, Bradley said the interest and sinking fund account is growing but that money can’t be used toward operating costs.
Last year the district was funded 66 percent by local taxes and 34 percent by the state. Next year, the district estimates to fund 75 percent from local taxes and 25 percent from the state.
Propser ISD has not approved the 2018-2019 budget — it will be approved this August after the special session.