Op-Ed: Colyandro, Connett: School debt blurs focus of what is important

Amarillo Globe-News
Nov. 17, 2012

By John Colyandro & Brent Connett

The decades-long saga of school finance litigation re-opened with a new trial in Austin, with school districts sounding an all-too-familiar refrain: “more money now.”

As school districts sue the state over an alleged lack of resources, rarely does school district debt enter the public discussion.

Public education is the state’s top priority in terms of expenditures of state dollars, accounting for 41.5 percent, or nearly $33.75 billion, of the 2012-13 state budget. Growth in public school spending has well-outpaced enrollment growth and inflation since the 1998-99 school year.

Direct expenditures for public education are augmented by school district debt, which pays for things like facilities and technology upgrades. The amount of school debt is approaching crisis levels: currently, taxpayers owe $63.6 billion in public school bond debt, which amounts to $13,530 for every student in a school district with debt. By comparison, 2011 public education expenditures per pupil total $11,218.

School debt accounts for nearly a third of all local debt in Texas, and in turn, local debt accounts for more than four-fifths of all outstanding debt in Texas.

A recent study by Comptroller Susan Combs, “Your Money and Education Debt,” reveals that schools’ fastest-growing category of expenditure over the past decade is debt service. From 2001-11, public school districts’ total debt outstanding rose by 155.2 percent, far more than the increase in inflation (26.5 percent) and enrollment growth (21 percent).

Districts claim these expenses are justified because the bonds are voter approved, but these same districts are in court claiming the state has failed to finance educational programs. Under oath, one school district expert claimed public schools need an additional $6 billion in funding per year. In 2010, school districts paid $5.2 billion in debt service alone, more than nine percent of total district expenditures.

Disconcertingly, school districts too often levy this exorbitant debt for frivolous and extravagant athletic facilities. In a September 2012 report, Bloomberg Businessweek cites alarming statistics: “Ten Texas high schools now have stadiums with 16,000 or more seats. More than 100 have video scoreboards and more than 500 have artificial turf fields.”

Carthage ISD recently installed a video scoreboard that spans 1,200 square feet for a price tag of $750,000.
Allen ISD recently completed a $60-million stadium with a capacity of 18,000, including a 75-foot-by-45-foot scoreboard with an HD screen.
The Austin school board is considering a $176.9-million proposal to renovate athletic facilities.

These athletic facilities add to the debt problem, yet have no bearing on classroom teaching and learning. While schools remain locked in a fruitless competition to build increasingly palatial facilities, and as school funding and debt have increased significantly, SAT test results have remained static over the past decade. Worse, little more than a quarter of the Texas students taking either the SAT or ACT meet the criterion score of the state’s Academic Excellence Indicator System (1110 on the SAT or 24 on the ACT).

The state has permitted this frivolous spending and excessive debt by backing 83 percent of all outstanding public school debt, only encouraging more borrowing. In the next legislative session, lawmakers should enact at least four new requirements for state backing of school district bond issues to encourage responsible borrowing practices.

First, bonded indebtedness for athletic facilities should be voted on as a separate measure from any other school district matter. Districts should not hide tens of millions in debt by packaging athletic facilities on the same measure as academic facilities.

Second, the permanent school fund should not be used to back debt with a term greater than 20 years.

Third, the Legislature should consider creating a more transparent ballot, as proposed by Combs in her latest report that would include total current debt and other important voter information.

Finally, the Legislature should consider requiring a higher threshold for passage of bond packages since so few people vote in bond elections.

Texas taxpayers who fund public education are drowning in debt, which amounts to a massive misallocation of resources from teaching and learning, the core functions of public education.

The growth in debt must be arrested through more prudent and far-sighted fiscal management.

John Colyandro is executive director and Brent Connett is communications director of the Texas Conservative Coalition Research Institute.


Published by the Amarillo Globe-News on Saturday, November 17, 2012