Texas school districts raise hands for shares of $1.29 billion federal infusion

As the coronavirus pandemic continues to destabilize public education, Texas school districts are waiting to learn whether a federal stimulus package could help shore up rocky budgets.

The federal Coronavirus Aid, Relief and Economic Security Act signed in late March includes money to help schools try to keep vulnerable students from slipping away, with the tanking economy widening divides between wealthy and poorer students. Texas expects to receive $1.29 billion from the Elementary and Secondary School Emergency Relief Fund, the vast majority earmarked for direct delivery to school districts based on their student poverty rates. Texas will receive the second-largest amount of money, after California.

The Texas Education Agency plans to keep about $129 million — 10% — for its own coronavirus-response projects and is expected to reveal its plans for the money as soon as this week. Gov. Greg Abbott's office is expected to receive an additional $307 million for higher and public education. And Congress is debating another stimulus package that could go to schools.

School districts have not yet seen revenue hits because they're still receiving state funding they were promised. But they are eating unexpected costs and awaiting a crash in both state and local tax revenue in the coming budget cycles.

The TEA has not yet told districts how much they should expect from the federal infusion, and school finance experts have been advising local officials not to count on the money just yet. “We’ve been telling districts ... don’t build this in as part of your budget until you have clarity. What you don’t want is to build something into your budget and then have to take it away,” said Amanda Brownson, a director of governmental relations at the Texas Association of School Business Officials, which consults with districts on school finance.

As COVID-19 fears ramped up in March, Texas schools struggled to get students learning online, often leaving low-income students and students with disabilities without adequate resources for weeks. They began buying Wi-Fi hotspots and laptops to hand out to students who need them. They offered free meals to families on weekends, before the federal government agreed to reimburse them. And they offered limited extra pay to cafeteria workers and bus drivers who put themselves at risk to distribute resources to families during the pandemic.

There are still thousands of students who haven’t been in contact with their schools at all in the last few months and many who don’t have access to the internet. And no one knows when education institutions will return to normal.

Texas has promised to fully fund districts at least until the next legislative session in January, but it’s unclear how the state’s budget will recover from ravaged sales tax and oil revenues. State Rep. Dan Huberty, R-Houston, who chairs the House Public Education Committee, said in an op-ed last week that education would be a priority for both parties going into January's legislative session. But against the backdrop of an uncertain economic future, school officials aren’t sure what they should expect from the Legislature down the line or how their needs will change as the pandemic continues.

Already, advocates and educators are jockeying for how the state and school districts should spend the federal money, resurfacing old debates about how and whether governments should invest in virtual and private education.

School districts could have a considerable amount of flexibility spending the money, whenever it comes through, including on supplies to sanitize buildings, mental health services, and summer and after-school learning programs. Federal guidance encourages districts to spend the money on “activities that will support remote learning for all students, especially disadvantaged or at-risk students, and their teachers.”

But educators have reason to worry about future funding. States are allowed to use the federal stimulus money to offset budget holes, which worries educators who watched Texas carve billions from public education funding in 2011 soon after receiving stimulus dollars.

Robert Scott, the TEA commissioner in 2011, said this stimulus package looks a lot like the one during the Great Recession. One key difference is that school districts this time are asking to be reimbursed for past expenses, including personal protective equipment and technology.

"My biggest message is: As you go through this, your auditor ... is your new best friend," he said. "There's going to be multiple buckets of money that the agencies of state government and the Legislature are going to have to allocate from. You want to make sure you're drawing from the right bucket and you're documenting everything to make sure you don't have problems in the future justifying the expense."

Dallas ISD has been tracking all its coronavirus-related expenses, including Wi-Fi hot spots and meals, and hoping the federal government will reimburse most of them. The district had saved money for hot spots and computers before the pandemic, unlike many others, said Superintendent Michael Hinojosa. And it’s saving some money — around $6 million per month — with field trips, athletic competitions and most transportation canceled during the school shutdowns.

“We’re not going to be saving that money once we open back up,” Hinojosa said. “This is a short-term, current savings that might even offset some other expenses.”

Hinojosa is working with the TEA and the governor on a statewide initiative to connect all students to high-speed internet, which he’s hoping federal stimulus dollars can support. “The money we need is for the long term, and that is to connect to broadband,” he said. “A lot of districts don’t have the infrastructure the cities have, and a lot of districts don’t have the devices. … Until we know what that delta is, we won’t know how big the number needs to be for the future.

Districts might not get to keep as much of the money as they expect. Federal law requires districts to use the money they get for low-income students to provide services like tutoring and after-school programs for low-income students attending private schools in their area.

Now U.S. Education Secretary Betsy DeVos says school districts must also use some of the stimulus money to support all students in their area in private schools, not just low-income students. Unlike other states, Texas plans to follow this guidance as it distributes the money, according to a TEA spokesperson.

That response is sure to be good news for school-choice advocates who have already been lobbying Texas to pay for scholarships for low-income students in private schools otherwise at risk of closing during the pandemic. “Private school closures would inevitably put additional students in public schools at taxpayers’ expense, driving up public school enrollment just as the state heads toward tight budget years,” a group of school-choice advocates, including the conservative Texas Public Policy Foundation, wrote to Texas Education Commissioner Mike Morath in a letter last week.

They also asked him to expand the Texas Virtual Schools Network, a limited online learning platform created by the state in 2007.

That idea has support from some lawmakers. State Sen. Larry Taylor, R-Friendswood, wrote a letter, signed by Republicans on the Texas Senate Education Committee, asking Morath to expand the Texas Virtual Schools Network. Similar to a bill Taylor wrote last year, his proposal would lift the state’s moratorium on new online schools, remove restrictions on the number of online courses students can take, and allow students of all grades to take virtual classes.

The bill, which passed the Senate but was never taken up on the Texas House floor, was expected to cost the state about $68 million per year.

“By reviewing these barriers now, we can permit schools the flexibility to respond to their individual needs, create a ‘virtual insurance policy’ against the potential of a subsequent wave of COVID, and allow our students access to a safe, reliable, continuous learning environment,” he wrote.

A coalition of education advocacy groups sent Morath a rebuttal, arguing that many private full-time virtual programs are low quality and that the state should instead spend money on helping existing public schools reach students. "Expansion of this program at this time would likely be counterproductive for student learning," the letter reads.

Disclosure: The Texas Association of School Business Officials and the Texas Public Policy Foundation have been financial supporters of The Texas Tribune, a nonprofit, nonpartisan news organization that is funded in part by donations from members, foundations and corporate sponsors. Financial supporters play no role in the Tribune's journalism. Find a complete list of them here.