AUSTIN, Texas (AP) — Texas' public schools are $1 billion short, meaning officials will soon have to seek that much in supplemental appropriations from the state Legislature in order to meet upcoming financial obligations, a top official said at the school finance trial Monday.
Shirley Beaulieu, chief financial officer at the Texas Education Agency, testified before state District Judge John Dietz that in the coming weeks, her agency will have to request $1 billion in additional funding so that school districts can make their July expense payments.
The legislative session opens Tuesday, but any request for additional school funding could get tricky since lawmakers already deferred $2.3 billion in August school payments a few days into the new fiscal year to help shore up the 2012-13 budget passed two years ago.
Beaulieu's revelation came as the case resumed after a three-week holiday break.
"The system as a whole is in bigger trouble than even we thought," Rick Gray, a lawyer for the Equity Center, which represents a large coalition of school districts across the state, said during a break from court.
More than 600 school districts representing three-quarters of Texas' 5 million-plus public school students are suing the state after the Legislature in 2011 voted to cut $5.4 billion in funding to schools and educational grant programs. The districts claim the cuts — separate from the $2.3 billion the Legislature deferred — left schools unable to provide students with an adequate and equitable education, in violation of the Texas Constitution.
The districts spent nearly two months presenting their case, describing how the funding cut has led to larger class sizes, teacher layoffs and the elimination of many pre-K programs. The state contends that current funding is adequate, and is expected to continue calling witnesses for another two weeks.
But Beaulieu's testimony caused more of a stir than previously anticipated.
"This just magnifies the need for the Legislature to seriously get in and solve the problem once and for all," Gray said. "We're playing the 'robbing Peter to pay Paul' year in and year out."
Dietz will decide the case, though his ruling will likely be appealed to the state Supreme Court. If the courts ultimately side with the districts, it will be up to the Legislature to remake the state's school finance formula.
Earlier Monday, Rob Coleman, the Texas Comptroller's Office's assistant director of fiscal management, testified about the scope of the projected budget deficit Texas faced when the 2011 cuts were passed. He detailed how lawmakers had to close a projected $27 billion budget shortfall because the state's finances were on shaky ground due to the economy.
Coleman also acknowledged under cross-examination that the Legislature could have tapped Texas' reserve fund, commonly referred to as its Rainy Day Fund, to avert the steep education cuts. But he said that was lawmakers' choice.
"It was their discretion to take from that fund, or not," Coleman testified.
Texas lawmakers have tapped the Rainy Day Fund six times since they created the pot of money in the late 1980s, according to Coleman. During the 2011 legislative session, tea party activists and Republican Gov. Rick Perry, who was mulling a run for president at the time, pressured lawmakers largely not to touch the fund.
Districts say the funding cuts have been particularly hard to deal with because Texas' population is booming means public school enrollment is increasing by about 80,000 students per year.
Gray showed Coleman figures from the state's Legislative Budget Board indicating that the roughly 156,000 new students enrolling in state public schools during the current two-year budget cycle are expected to cost an additional $2.2 billion — money that hasn't been allocated.
He also presented Coleman legislative budget board documents showing that among the 15 most populous states, Texas ranks first in student enrollment growth but 12th in per-pupil spending and 13th in teacher salaries.