In December 2014, the week Pam Seipp became interim superintendent of Runge schools, the tiny South Texas district held a symbolic groundbreaking for schools and sports facilities to be paid for by a $22 million bond that local voters overwhelmingly approved just as oil prices began to slip.
Seipp’s main responsibility since then?
“The bearer of bad news,” she says.
Four months into the job, she had to inform the board of trustees that local property values were expected to drop by more than half from the previous year because of a major slowdown in oil and gas drilling, and that the $6 million savings account the 300-student district had built up during the recent boom would quickly evaporate. She delivered a similar message this year with property values expected to plummet another 42 percent amid the lingering low oil prices that have brought drilling in the state — and across the U.S. — to a near halt.
The district is now operating on a deficit budget and moving to restructure its bond because it can’t afford payments.
“It’s not been a good experience for me,” Seipp said. “I can hardly wait ‘til they get a permanent person here.”
Runge is a worst-case example of the budgetary difficulties facing school districts in oil producing regions across the state, where a drilling frenzy raged for nearly a decade until oil prices tanked.
- State Leaders Ask Agencies to Cut Budgets by 4 Percent.
Texas' top elected officials are asking state agencies to scale back their budget requests by 4 percent, seeking to further rein in state spending for the 2018-2019 cycle.
In a letter dated Thursday, Gov. Greg Abbott, Lt. Gov. Dan Patrick and House Speaker Joe Straus said agencies should propose the 4 percent reduction as a "starting point for budget deliberations."
"Limited government, pro-growth economic policies and sound financial planning are the key budget principles responsible for Texas' economic success," the three wrote. "It is imperative that every state agency engage in a thorough review of each program and budget strategy and determine the value of each dollar spent."
The letter hints at some priorities for lawmakers heading into next session, making several exceptions to the 4 percent cut. They include funds for public schools, border security, Child Protective Services and mental health resources. The exemptions also include public-employee pensions, Medicaid and dollars needed to meet debt service requirements for bond authorizations. Agencies are also being asked to submit information about zero-based budgeting, a practice in which all expenses must be justified in a new cycle. Patrick and state Sen. Jane Nelson, a Flower Mound Republican who chairs the Finance Committee, have been proponents of zero-based budgeting.
Overall, the letter makes a plea for holding back the growth of state government as Texas continues to deal with a downturn in the oil and gas industry.
- Analysis: No Political Benefit if Voters Can't Feel Tax Relief.
If a state officeholder of any political persuasion promises to cut your property taxes, demand proof.
They made their most recent attempt during last year’s legislative session with a constitutional amendment increasing the homestead exemption. Their hope was that school property tax bills would drop.
Voters approved the amendment in November, giving the average homeowner a $126 tax break.
Hey, if you can’t make it rain, make it sprinkle.
Lawmakers tried the rain thing back in 2006, rewriting property and franchise and other tax laws to bring relief to taxpayers.
State Sen. Paul Bettencourt, a Republican who was Harris County’s tax assessor-collector at the time, watched the benefit get swallowed by “appraisal creep” — the steady increase of property values in a booming state.
This is the problem for Texas lawmakers. They want to get a leash on property taxes statewide, even though there is no state property tax. It requires them to restrain local governments. The local governments, with plenty of evidence, point to expensive state government mandates that drive up their costs.
Your governments, taken together, operate as a circular finger-pointing squad.
