Rep. Drew Darby's District Hit Hard by Texas Legislature's Phase-Out of School Funding Mechanism

AUSTIN, TX — One third of Texas’ 1032 school districts will lose $400 million in Property Tax Relief funding in September.  The Additional State Aid for Tax Relief or ASATR funding expires in September and the legislature failed to approve additional funding to curb the funding shortfall for many small, mostly rural districts. Many of those districts are in west Texas, and in State Rep. Drew Darby's district.

In 2006, ASATR was implemented and school districts were forced to reduce property tax rates when the legislature passed a property tax relief measure. ASATR was intended to be a bridge, or temporary fix, to allow smaller districts, that lost a majority of their funding in the 2006 law, to adjust.

According to information from State Rep. Drew Darby’s office, many of those districts are in West Texas.  Those districts include Robert Lee, Eden, Crane, Crockett County, Rocksprings, Glasscock County, Coahoma, Forsan, Irion County, Blackwell, Fort Stockton, Iraan-Sheffield, Schleicher, Sterling City, Sonora, Jim Ned, Rankin and McCamey. Some of these listed districts rely upon ASATR for as much as 50 percent of their annual M&O funding. M&O stands for Maintenance and Operations. M&O pays for teacher salaries primarily.

Interest & Sinking, or I&S, is another piece of the school property tax system in Texas. I&S funds pay off bonds, or loans, to build school district infrastructure. You cannot increase the I&S tax rate to compensate for a shortfall in M&O funding.

Below how state funding to school districts within Rep Drew Darby's district will be impacted by the phase-out of ASATR. The far right number, 2017 ASATR Amount, is how much the school district receives during the current fiscal year. That money will be phased out over the next two years:

The Legislature gave minor relief to the 300 school districts losing ASATR funding. Collectively, school districts will only receive $50 million in 2018 and $25 million in 2019 in state aid to replace the $400 million allocated in 2017, said Darby's office. 

During the legislative session, the House and Senate passed several versions of HB21 that would increase funding formulas for school districts., but the Senate added a “private school choice” provision to its version.  There was so much opposition to the voucher measure that the bill died and funding for ASATR died with it. 

Most of the school districts still receiving ASATR funding are small and rural and their tax bases fluctuate with the prices of oil and gas. 

At the end of the day, districts are left with only two options to replace the funding, increase the property tax rate, unless it is already at the maximum, or cut programs and services. Since most school districts in Texas are taxing property near the maximum rate, raising taxes is not an option. Dramatic funding cuts, and layoffs, at smaller school districts, are to be expected.

The only way to fix the shortfall caused by the phase-out of ASATR funding will be to hold a special session. Gov. Greg Abbott has been mum about when he will decide to call the legislature back into session, if at all, as of Friday.