School district debt grows as enrollment increases

The Daily News

Published November 18, 2012

The Texas Comptroller shined a light on rising school district debt in the state, but local districts said the comptroller?s study left out some key pieces of the puzzle.

Texas Comptroller Susan Combs released a study that found in 2011, public school debt was $63.6 billion, or about $13,530 for every student in a school district with debt, and accounted for more than one-third of all local debt in Texas.

Most of that debt is from bond sales approved by voters and used for infrastructure projects. In the last 10 years, public school debt rose about 155 percent, the study said.

And well more than half of the public school districts in Texas are carrying some debt. Of 1,024 school districts, 854 have outstanding debt, the study said.

?Educating young Texans is crucial to the state?s continued economic success, but we must also ensure costs do not overburden Texas taxpayers and families,? Combs said.

In Galveston County, the debt carried by school districts and paid for by local taxpayers has increased in the last 10 years but not as dramatically as the statewide average.

Total public school debt grew by about 64 percent from 2001 to 2011 for the districts in the county. The county?s largest district, Clear Creek Independent School District, has the largest overall debt with an outstanding bond debt of $654.5 million in fiscal 2011, up from $293.2 million in fiscal 2001.

Other districts have had steeper increases. Texas City school district?s debt increased by almost 78 percent, from $27 million in 2001 to $122.9 million in 2011. And most districts, Dickinson, Friendswood, Galveston, Hitchcock and Santa Fe, have all seen their debt increase by about 70 percent or more.

But what is being missed by just looking at the debt numbers is the extraordinary student growth many school districts have faced, said representatives from around the county.

A Growing Population

Clear Creek school district was, at one point, enrolling 900 to 1,200 new students a year, said Paul McLarty, deputy superintendent of business and support services.

Now, the district is averaging 600 to 800 new students a year, almost the capacity of a typically 900-student elementary school, he said.

The district has built 12 new schools in the past 10 years, including two new high schools in the last five years, he said.

?Is the state going to pay for the students who come in and the school houses we have to build?? asked Clear Creek spokeswoman Elaina Polsen.

Along with Clear Creek, Dickinson school district is a member of the statewide Fast Growth School Coalition.

Dickinson school district?s student population has grown by nearly 35 percent in the last 10 years, going from fewer than 6,000 students in 2001 to more than 9,000 in 2011. Student population is now close to 9,800.

?That?s a huge growth in student population, and you have to put those kids in buildings,? said Dickinson Superintendent Vicki Mims.

The Dickinson school district has built 11 new schools, as well as undertaking a $40 million renovation of the high school, since 1999.

?We have really good facilities for our kids,? Mims said. ?Our kids have done well academically, and that?s one of the reasons.?

Driven by the fast growth, the district has had to invest a lot in buildings and facilities, she said, and the community has been supportive by approving the bond elections.

Much of the borrowing by Texas City school district was done to deal with aging infrastructure.

?The majority of Texas City ISD?s schools were more than 50 years old,? school district spokeswoman Melissa Tortorici said.

The school district had to keep up with increased requirements form the Texas Education Agency and keep up with the modern teaching and technology needs, she said.

In 2007 voters overwhelmingly approved of the district selling about $122.5 million in bonds that went toward everything from building a new high school, intermediate school and elementary school as well renovations to existing schools, improving technology infrastructure and stadium renovations.

School district representatives said bonds were much like home mortgages needed to pay for the costs of school buildings.

Making Payments

School districts can use bond money only for things like building schools and repairs. The money for things like paying teachers comes from the maintenance and operations side of a school district?s tax rate. Districts pay off their debt using tax dollars raised from the interest and sinking portion of the district?s property tax.

The Dickinson school district has reached the limit of what it can borrow.

A district can borrow only up to 10 percent of its taxable value, said Ryan Boone, the Dickinson school district assistant superintendent for business and operations.

And the district has also reached the state imposed 50-cent per $100 of value limit in the interest and sinking tax, Boone said.

So for now the district will have to accommodate its new students in temporary buildings, Mims said.

Voter Approved

A typical high school for the Clear Creek school district can house about 2,500 students and costs about $90 million once the price of property is factored in, said McLarty.

An elementary school can range from $23 million to $25 million, and an intermediate school can cost about $45 million, he said.

Inflation and the need for technology have driven costs up, he said.

But what?s important to take into account, and what the comptroller?s study overlooks, is that the need to take on debt is driven by factors like growing student populations and aging buildings, McLarty said.

?We?re not out there passing bond issues for things that are not really needed,? McLarty said. ?And if they weren?t really needed then the voters would say you don?t need it and say we are not going to vote for that.?

Copyright 2011 The Galveston County Daily News. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Source: http://galvestondailynews.com/story/362606/

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