TEA Looking at Letting School Districts Draw From Fund Balance During Budget Crisis

Keep Dallas Observer Free
I Support
  • Local
  • Community
  • Journalism
  • logo

Support the independent voice of Dallas and help keep the future of Dallas Observer free.

About a month ago, Dallas Independent School District spokesman Jon Dahlander told Unfair Park that even during this current budget crisis, the district has no intention of touching its fund balance, which, he said, should sit at somewhere near the $100-million mark. Explained Dahlander, the DISD's reserve fund is not like the state's Rainy Day Fund, which is replenished by oil and gas proceeds. He also reminded that ex-chief financial officer Larry Throm told the school board to get that thing back up to $150 million. Said Dahlander, "The goal for any school district is to be able to have two pay periods in the bank."

The Texas Education Agency uses the fund balance to determine a district's fiscal well-being; far as the TEA's concerned, districts with "a fund balance less than 12.5% (1½ months) of the district's general fund expenditures" is considered insolvent, and districts statewide are loath to touch the thing for myriad reasons. But even as long ago as November, DISD Superintendent Michael Hinojosa knew, deep down, he may have to tap that fund, which, during The Great Budget Crisis of 2008, hovered around $37 million. There's been no mention of the fund balance in any of the budget-reduction scenarios presented to the board, including last week's not-as-bad-as-the-worst-case-scenario Version 2.0.

But on her blog this morning, DISD trustee Carla Ranger points out that two days ago, Robert Scott, the state's commissioner of education, sent this missive to district administrators statewide acknowledging that the TEA has begun "the process of modifying indicators in the 2010-2011 School Financial Integrity Rating System of Texas (FIRST) that require school districts and charter schools to maintain approximately 60 days of operating expenses in their general fund account." He says the agency will know more in May, at which point it'll send word and ask for comment, but long story short, he writes:

Given the state's future revenue projections, it is the intent of the agency to avoid penalizing districts and charters that elect to expend portions of their fund balance in the upcoming biennium as a result of the nation's slow economic recovery and any changes the Legislature may make in state funding. The agency's goal is to provide school districts and charter schools flexibility to manage their budgets locally, and TEA will work on changes to the FIRST rules relating to the 2011-2012 and 2012-2013 fiscal years, which will affect FIRST ratings issued in 2013 and 2014.

Keep the Dallas Observer Free... Since we started the Dallas Observer, it has been defined as the free, independent voice of Dallas, and we would like to keep it that way. Offering our readers free access to incisive coverage of local news, food and culture. Producing stories on everything from political scandals to the hottest new bands, with gutsy reporting, stylish writing, and staffers who've won everything from the Society of Professional Journalists' Sigma Delta Chi feature-writing award to the Casey Medal for Meritorious Journalism. But with local journalism's existence under siege and advertising revenue setbacks having a larger impact, it is important now more than ever for us to rally support behind funding our local journalism. You can help by participating in our "I Support" membership program, allowing us to keep covering Dallas with no paywalls.

We use cookies to collect and analyze information on site performance and usage, and to enhance and customize content and advertisements. By clicking 'X' or continuing to use the site, you agree to allow cookies to be placed. To find out more, visit our cookies policy and our privacy policy.


Join the Observer community and help support independent local journalism in Dallas.


Join the Observer community and help support independent local journalism in Dallas.