Houston ISD proposes drastic changes to school funding, magnet programs

Houston ISD officials said Saturday the district will need to cut about $200 million from its 2018-19 budget to bring spending in line with an increasingly gloomy financial outlook.

In an equally momentous move, Houston ISD officials also proposed far-reaching changes to how the district operates its magnet and school choice systems, some of the boldest moves to date by second-year Superintendent Richard Carranza.

Still reeling from Hurricane Harvey, Houston Independent School District officials revealed at a board meeting Saturday that the district is facing a double whammy: A multimillion-dollar, state-mandated "recapture" payment requiring districts with high property values to "share the wealth," and an expected drop in enrollment and tax revenue because of the devastating storm, which severely damaged schools and delayed the start of classes by two weeks.

The proposed cuts come at an inopportune time, with the district battling to stave off a potential state takeover because of 10 chronically under-performing schools.

Although the measures outlined Saturday are preliminary and could change significantly before HISD's board votes on them, officials acknowledged that the district is entering an uncertain time.

"It's a sea change for HISD," said Rene Barajas, the district's chief financial officer. "But at the end of the day, from a budgetary perspective, we're still going to get the job done. It's just going to be harder."

Leveling out staffing

District officials said about 44 percent of necessary spending cuts could come from schools, while about 56 percent could be from central administration, maintenance and operations.

Among the biggest proposals: Centralizing school funding and standardizing staffing based on student-to-staff ratios.

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Barajas proposed scaling back the practice of giving schools a pot of money each year through per-unit allocations, known as the PUA system. As the funding system exists now, each school is given a certain amount of money by the district, and principals have almost complete discretion to spend that money on staffing, programs and other needs and wants. Under the proposed new system, each school would have set staffing levels based on student-to-staff ratios, which would be paid for by the district's central administration rather than the school's checkbook.

For example, at the middle-school level, each school would have one teacher per 30 students and one counselor per school or for every 500 students. Now, there is no codified staffing system for the district, and some schools have as many as 15 assistant principals while others have one or two.

The staffing standardization would mean the district's largest schools, such as Bellaire and Lamar high schools, could see a large number of teachers cut, while under-enrolled schools such as Kashmere High would likely see cuts on a smaller scale.

Barajas recommended centralizing schools' substitute teachers, athletics departments, special education, career technical programs and campus stipends. That would save schools and the district money, he said.

District officials also called for cutting about $116 million from spending on central administration, operations and facilities.

Barajas said HISD's budget situation is the result of a perfect storm — growing recapture payments, a projected loss of tax revenue due to lower property values after Hurricane Harvey, fewer students (also due to the hurricane) and a slew of other issues. And though Houston ISD can lessen the amount it owes for "recapture" because of the storm, the district still stands to lose more than it will gain because of potentially lower tax revenues, thanks to hundreds of thousands of flooded buildings. He said it's as if HISD lost $10 in local taxes but its recapture payment was only $2 less.

"That means I'm still short $8," Barajas said.

Deep cuts loom

Houston ISD Chief Operating Officer Brian Busby said that in his 20 years with the district, he's never seen cuts so deep that they would affect every level of the district.

"This is a different kind of cut. We've had cuts where we had to cut food service staff because of a shortfall, but we always had a way we could get out," he said. "We always had CFOs who could come in say, 'We'll help you this time but won't help again,' and they would go in fund balance or the superintendent's account.

"But now there is no fund balance, there is no superintendent's account to go to for this, because there's never been a cut at this level," he said.

Andy Dewey, executive vice president for the Houston Teachers Federation, said it seems to make sense to change the way schools are funded and to standardize some positions instead of giving principals power and little oversight to make those decisions. But he worried about what potential staffing cuts could mean for classrooms.

"I want to see how the new funding system will affect our biggest schools like Bellaire and Lamar," Dewey said. "We can't go back to 40- and 45-kid class sizes in high school. If that's going to happen, it has to be looked at."

He also said the district should be ready for a "major battle" when it comes to changing magnet programs, although he initially agreed with some potential changes, such as creating feeder pattern magnets and more closely examining which programs are attracting students and which are not.

The proposed changes to magnet and school choice systems arose from the recommendations of a study committee composed of magnet and neighborhood school principals, parents, university experts and district staff, according to Mark Smith, HISD's chief student support officer.

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Under the current magnet system, schools have significant freedom to create magnet programs and fund them as they see fit. There are about 115 different magnet programs and schools throughout the district, and at many of the most sought-after magnet schools — including the High School for Performing and Visual Arts and DeBakey High School for Health Professions — there are far higher rates of white and affluent students than are enrolled across the district.

Two types of magnets

The proposed new system would create two types of magnet schools: unique magnet campuses that enroll students from across the district, and feeder magnets that would establish magnet programs in elementary, middle and high schools that feed into one another.

It calls for creating four school choice/magnet quadrants. Each geographic quadrant would offer schools with the same magnet themes, perhaps including but not limited to performing and visual arts, dual language, early college, career technical programs and special education programs.

There would be an elementary, middle and high school of each magnet theme in each quadrant.

Vanguard programs and schools, including Carnegie Vanguard High School, would lose their magnet designation and would become schools and programs of choice. That means they would lose their additional magnet funding, although the state already gives schools extra money for every gifted and talented student they educate. Carnegie Vanguard High would continue to offer open enrollment to students from across the district and would still likely offer transportation to all its students.

Smith said the committee also recommended giving some preference to students from economically disadvantaged families and neighborhoods when considering admissions to the districts' most sought-after open-enrollment magnet schools, and suggested eliminating many academic and test-score requirements that students must clear before they can be entered into a magnet or school choice lottery.

Ultimately, the potential changes would likely cut the number of magnet programs and schools district-wide from about 115 to about 85 and would codify a system for reviewing, starting and ending magnet programs and schools.

Smith said student applications for magnet programs may need to be reopened in March for students who applied to magnet programs that may cease to exist come August.

Carranza shelved plans to drastically cut magnet funding in 2016 after facing pushback from some parents. He said that proposal was flawed because his administration had failed to get feedback from parents and did not do a good job of communicating how the changes would affect existing schools and programs.

He stressed that the committee's recommendations are far from final and that the district will reach out to parents and school communities in the coming months to get feedback and tinker with their ideas.

"We never went in with a lens to destroy magnets — that's not our goal," Carranza said. "Our goal take a serious look at our portfolio of schools, identify areas that need improvement and start a conversation with the board to see what needs to change to ensure equitable access."