"Protect your fund balance!" is going to be my mantra this week.   School districts are beginning the revenue portions of the 08/09 budgets.  Some may be coming up short of revenue and are considering using fund balance to make up the difference.  I asked a business manager what was his district's long term plan for funding.  “We are counting on the Legislature to come up with more money,” was the answer.  On that very same day last week I talked with superintendents who met with their senator who, according to them stated, “School finance may not be something we deal with in the 81st session.” The legislature is not a reliable source of school funding. 

I have never had much faith in mystics or seers and I do not claim to be one. However, I believe the evidence is mounting that we are on the brink of another period of financial instability for school districts and it appears some school leaders aren’t accepting - or do not understand - this fact.  Some are saying they do not want to do the “election option” until there is no other alternative; this is a mistake. If your budget does not balance for 08/09 and you are not ready to have an election, first consider cutting non essential expenditures - Don’t first consider using your fund balances to make up the difference. 

I have three basic reasons for this conclusion:  1) Meeting the district's needs with fund balance gives the public the false sense that there are no problems and the district is fine.  2).You can only spend the fund balance once and then a year later  the school has an even larger problem  and no interest revenue from the fund balance 3) Fund balances were created when school finance was different, creating a fund balance today will be much more difficult.  Schools cannot rebuild fund balances as they once did with funds from value growth, those funds no longer go to the school district.

Even after you adopt the 13 meaningful discretion pennies this is not a long term solution.  Have you calculated and reviewed the revenue gained from the rollback elections? Look at the funds you generate from all 13 pennies and then determine how long this will fund your district.   For some districts I have reviewed, the 13 meaningful discretion pennies may add 3 to 5 years depending on your student growth and how much new M&O expenditures are being added.  Districts must plan for M&O increases from building new facilities (funding for additional utilities and maintenance) as well as inflation in fuel and other commodities.

Have you looked at your numbers? Are you betting on the legislature in 09?   I would like some emails that share our readers' perception of the future for school funding.  Be straight forward, tell me what’s happening in your district and what you see for the future. – I will not publish without your permission but I want to know if my above conclusions are correct.

I will continue with this topic tomorrow – js – webmaster@texasisd.com