Oil, Gas Boom Makes School Districts Rich but Uneasy
School districts can get rich just as fast as the people in the oil bidness, and the poor-to-rich whiplash can have some weird aftereffects.
Texas public schools get about half of their money, on average, from property taxes. And when the property turns out to be sitting on top of the Eagle Ford Shale play, the sudden changes in wealth can produce fiscal temblors in the schools.
Some, like the Dilley Independent School District, see an influx of money and get to keep it. Others, like Cotulla ISD, see the money come in but don’t get to keep it ...
Comments (2)
EyesOfTX
Boy, y'all had to work pretty hard to put a negative spin on this incredibly positive development for these school district. Congratulations, I guess.
GS Crispus
It is not negative spin, but the reality of depending on more volatile markets such as energy to bring in revenues. Oil revenue results in strong economic growth, but it is not as stable as factory jobs that are more integrated into the local economy. The author could have done a better job of explaining the information in the article.
For instance, property values will rise, but so will the cost of services, goods, and labor. These districts may begin to raise base wages to attract new staff as population flocks to the area and services/resources are strained. You see in other oil booms in rural areas, McDonalds having to pay $18-20 an hour for instance.
Unfortunately, oil booms tend to go boom and bust rather quickly. The world economy is not doing very well, and drilling here and elsewhere has been bringing down the price demanded for energy products (struggling world economy means less demand for energy, and an increasing supply due to increase drilling).
What we could see is a bust, sticky prices for all sorts of good (buyers and sellers tend to resist lowering prices even in economic downturn), and school districts that have out of control costs, but no access to state revenues that they once depended upon.